Cash & Liquidity Management

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Leveraging Innovation to Support a Fast-growing Organisation Dassault Systèmes (DS) is a fast-growing innovator, and has experienced a doubling in revenues to over €2bn in just a six year period. Treasury has had a major role in DS’ achievements so far, and is critical to delivering on its strategic vision of the future.

Leveraging Innovation to Support a Fast-growing Organisation

by John Colleemallay, Senior Director, Group Treasury & Financing, Dassault Systèmes

Dassault Systèmes (DS) is a fast-growing innovator, and has experienced a doubling in revenues to over €2bn in the six years between 2006-2012. Treasury has had a major role in DS’ achievements so far, and is critical to delivering on its strategic vision of the future. DS’ financial position differs from many organisations in that it has zero net debt. However, centralising cash balances and enhancing the efficiency and automation of processes across the business is no less important. By optimising the use of cash, funding working capital requirements without the need for external borrowing and reducing costs, treasury is helping DS to invest in new technologies and innovation that will drive growth and further increase customer satisfaction. This article outlines some of the recent initiatives on which treasury has embarked and how these contribute to DS’ strategic vision.

Treasury at Dassault Systèmes

We have experienced enormous growth at DS since the company was founded in 1981, to become the world’s leading 3D software design company. This culture of dynamism and innovation is inherent across the entire business, not least in treasury. We have a small but highly focused team that aims to embrace and pioneer the latest developments in cash, treasury and risk management, and leverage integrated, secure technology to enhance performance and efficiency. These objectives influence not only the way in which we have organised the department, but also in the projects on which we embark. For example, 

  • Treasury is organised regionally, with common processes, policies and systems;
  • We have reviewed our bank relationships and connectivity globally to ensure rapid, secure access to our cash assets;
  • We have an active risk management programme with constant monitoring of our market and credit risks;
  • We have reviewed our corporate legal structure with a view to promoting simplification and transparency;
  • We have centralised and harmonised core processes such as payments on a global basis;
  • We have been early adopters and champions of technology such as XML, SWIFT and 3SKey to promote and enhance standardisation and security across our treasury processes globally.

As a result of these initiatives, treasury has been a significant contributor to the successful integration of a number of major acquisitions realised over the last six years, allowing us to double our revenue and position the business for future growth. 

Phase 1: Rationalising cash management banks

In such a fast-growing global organisation, managing cash efficiently is a major priority for DS. We therefore sought to improve the visibility of our cash, ensure rapid, secure access, and maximise the value of cash assets globally. The first phase of this project was to rationalise our bank relationships. One of the results of such rapid international growth was the proliferation of banks and accounts, with at least 83 bank relationships in place across our three core regions: Europe, North America and Asia. We made the decision to reduce this number to four banks. 

We issued a request for proposal (RFP) to a number of respected international banks with the solutions, credit quality and geographic reach that we were seeking. A key criterion for our decision was bank communication. When rationalising our banking partners, we wanted to implement a single, bank-neutral connectivity channel that is integrated with our treasury management system (SWIFT integrated with Kyriba) as opposed to installing multiple proprietary systems. This would permit greater efficiency and more consistent security in the short term, and greater independence in our choice of banks in the future; however, not all banks could satisfy this requirement.

This project took around two years, but these four banks now cover 99% of our cash flows, with the remaining 1% handled through local banks for regulatory reasons. As a result of rationalising our banking relationships and reduced the number of accounts, we were in a better position to centralise our cash balances. Using the example of Europe, each entity has an account in each relevant country. These are zero-balanced into a non-resident euro account per country held by Dassault Systèmes S.A. These balances are in turn transferred to an account in France. We now have cash pools in USD, EUR and JPY, our three major currencies, with header accounts in each relevant region.

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