Centralization: The Key to Managing Global Growth

Centralization: The Key to Managing Global Growth

Monday, October 16, 2017, 8:30 AM Location: Room 11AB

The Panel

Laurens Tijdhof Erik Smolders Andres Ken Shuyama

Partner, Zanders VP & Treasurer VP & International Treasury

Keith Bergman

Director, Zanders

Centralization: Optimize Performance & Managing Global Growth

Question #1

What level of centralization would you give to your treasury organization?

1) Centralized2) Decentralized3) Hybrid

Results #1

Realize the Promise of Technology™

Ingram Micro is…

THE GLOBAL LEADER in technology and supply chain services

WITH AN EXTENSIVE ARRAY OF RESOURCESto drive market and customer growth

WHILE BRINGING UNIQUE INSIGHTS that enable businesses to …

Global Leader in Technology and Supply Chain Services

$42BREVENUE

All information as of fiscal year 2016

SALES IN 160COUNTRIES

16.2M+ Sq. Ft.ACROSS 155

LOGISTICS CENTERS AND44 SERVICE CENTERS

200K+ CUSTOMERS &

1,700+ VENDORS

OPERATIONS IN 52 COUNTRIES WITH

30K+ ASSOCIATES

DELIVER ITAD SERVICES

TO 30 OF THE FORTUNE 100

1 OUT OF 3 MOBILE DEVICES IN THE US

#64 ON FORTUNE 100

SHIP 500MUNITS/YEAR

$42 Billion in RevenueRobust business across the world

$17.7BNorth America

$11.9BEurope

$2.7BLatin America

$9.8BAPAC, Middle East,

Turkey & Africa

Revenues as of fiscal year 2015

Comprehensive Vendor, Customer & Capabilities Portfolio

200,000+ Customers

Inventory ManagementBusiness Intelligence and Analytic ToolsVendor RelationsFinancing

Private Label ServicesConfigurationCommunitiesDeep Understanding of Customer Needs

Supply Chain ExpertiseLifecycle ServicesSales and MarketingTechnical and Pre-Sales Support

IT • Mobility & Lifecycle Services • Cloud • Commerce & Fulfillment Solutions

1,700+ Vendors

Treasury Structure @ Ingram Micro• Highly Centralized treasury, focusing on funding operations, efficient cash

management and hedging FX exposures

• Corporate treasury in Irvine, CA headquarters responsible for strategic funding programs, policies, bank and rating agency relations and corporate reporting

• Operational treasury in Buffalo, NY– Funding– Global pooling (ZBA or notional)– Payments on Behalf of (& some Collections on Behalf of) for North America & Europe– Global currency hedging

• Some local treasury function, especially in countries that cannot participate in global pooling structures

FISGlobal Financial Technology Provider

130+ COUNTRIES

55K+EMPLOYEES

$9B+ REVENUE

20K+CLIENTS

$28T+UNDERLYING FUND

ACCOUNTING

848M+CARDS

PROCESSED

10B+FINANCIAL TRADE

RECORDS PROCESSEDPER HOUR

$800B+HEDGE FUND

ASSETS PROCESSED

36M+MOBILE BANKING

USERS

27B+TRANSACTIONS

PROCESSED

$9T+MONEY MOVED

GLOBALLY

420B+SHARES PER YEAR TRADED THROUGH

NETWORK

All numbers are approximate as of 2016 from internal company data

Technology Solutions

Post-Trade ProcessingGlobal Trading

Buy SideRisk and Compliance

INSTITUTIONAL AND WHOLESALE

Core BankingImage & Output Solutions

Wealth Management

BANKING AND WEALTH

Risk and Compliance

Digital BankingMobile Banking

Bill PaymentTreasury Services

CORPORATE AND DIGITAL

Issuer ServicesNetwork ServicesPrepaid Services

Loyalty

PAYMENTS

• Card and Retail Solutions• Core Processing + Ancillary Applications • Securities Finance and Processing• Asset Management• Risk and Compliance Solutions• Global Trading• Insurance• Trade Execution• Market Data Distribution

• Core Processing + Ancillary Applications • Digital Solutions – including Internet, Mobile,

and eBanking• Electronic Funds Transfer + Network Services • Card and Retail Solutions • Fraud, Risk Management and Compliance • Item Processing and Output Services • ePayments Solutions • Wealth Management • Corporate Liquidity • Government Payments Solutions

Operating SegmentsINTEGRATED FINANCIAL SOLUTIONS

SOLUTIONS

CLIENTS

GLOBAL FINANCIAL SOLUTIONS

NORTH AMERICA EMEA

15%

6% ASIA PACIFIC

LATIN AMERICA 4%

75%

Revenue by Region

Treasury Structure @ FIS• Centralized in North America and working toward absorption of global treasury activity Integrating past acquisitions Systems standardization

• Treasury FTEs deployed regionally to match business activity and needs US, UK and Singapore Geographical revenue not indicative of activity level Some business units have treasury responsibilities; LATAM largely decentralized

• Added challenge of having financial institutions as customers and holding / moving 3rd

party cash as part of core business FIS businesses need specific banking services or access to clearing Complex KYC, regulatory framework


Trea

sury

Impa

ctBu

sines

s In

tegr

atio

n

Ability to ensure efficiency, quality and value-added services

Foundation Developing Established Enhancing Optimized

Treasury Maturity

Value-Added&

Strategic TreasuryEfficiency &

Cost-Focused Treasury

Transactional Treasury

Transcending

Treasury Maturity & Level of Centralization

Presenter

Presentation Notes

Strategic capacity to respond to changes today, tomorrow and beyond Assessment of Treasury Activities & Enablers according to five stages of development resulting in an overall Treasury & Risk Maturity. “Beyond stage 5 is ‘next practice’ and although not a definitive stage in itself this is where treasury transcends; continuing to add strategic value yet being responsible for more than treasury only. Treasury is not just ‘facilitating’ the growth of a company, but ‘driving’ growth and value creation in collaboration with the CFO. This requires an ‘outside-in’ view with more awareness of market context and identification of regulatory and political uncertainty and the assessment of the treasury impact. A transcending treasury will create added value from data insight and risk intelligence to focus on business impact.” This is still a quite generic description and could also be called ‘futuristic’ as per your suggestion. In my opinion, the biggest difference in the future 6th stage (i.e. compared with the optimal 5th maturity stage of today that is using traditional technology) is that treasury can benefit from the great potential of exponential technology solutions such as Blockchain, FinTech and Big Data to create added value from data insight and risk intelligence. This will empower treasury to be more strategically involved in optimizing the financial supply chain and other business areas. In section 5.6 on page 22 of the white paper, we included a graphical overview of treasury in the future normal and our assessment of the potential ability to adapt these mega trends. Define enablers and activities Define Treasury Development of those anablers and activities The more developed indicates ability to ensure efficiency, quality and value added services This combined will give your overall Treasury Maturity Transactional Treasury Efficiency and Cost Focused Treasury Value Added & Strategic Treasury The further your Treasury Development, the bigger your Treasury Impact

Question #2

Which maturity stage best describes your treasury organization?

1) Foundation2) Developing3) Established4) Enhancing5) Optimized

Results #2


Foundation

Developing

Established

Enhancing

Optimized

• No dedicated treasury staff / decentralized treasury activities• Treasury tasks at subsidiary level, limited central coordination/control

• Dedicated treasurer with some support staff• Centralization of some core treasury activities

• Clear central treasury structure & governance model• Formalized communication with subsidiaries• Adequate staffing, experienced and qualified team

• Internal consultant to other corporate functions/subsidiaries

• Long-term focused treasury roadmap

• Optimal centralization of activities• Strategic, proactive business partner • Advising CFO

Professionalization Centralization Standardization Automation And what’s next?

Question #3

Which describe the most important driver to centralization?

1) Gain Control2) Optimize Performance3) Achieve Strategic Objectives

Results #3

Documents

Centralization: The Key to Managing Global Growth