Strategic Treasury

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Cost, Capability and Competence: Factors in an SSC Success Jack Gogarty of Coca-Cola's Global Finance Operations discusses the financial management solutions implemented by the company, facilitating their vision of doubling system revenues by 2020.

Cost, Capability and Competence: Factors in an SSC Success

by Jack Gogarty, Global Finance Operations (GFO) Europe, Eurasia and Africa, Coca-Cola

In 2009, The Coca-Cola Company announced its vision to double system revenues by 2020, effectively replicating 125 years of success in only a decade. To achieve this, the company needed a fundamental shift in the way that we ran our business, of which the creation of GFO is an important part. By concentrating operational (and latterly more analytical and strategic) activities into a centre of excellence, our operating business units would be able to focus on growth rather than diverting resources into activities such as accounting and compliance.

Establishing GFO

Since our GFO centre here was first established, we have built a team of 110 finance professionals who provide all accounting, control, compliance, statutory reporting and treasury operations for 130 legal entities, with 450 accounts and 40 banks across Europe, Eurasia and Africa. As we have migrated local operations from each country into GFO, we continue to look for ways to streamline our activities to allow us to scale up our activities and deliver additional value year-on-year. Inevitably, this becomes increasingly challenging as the organisation matures and all the obvious efficiency opportunities have already been captured.

Role of technology

Technology is a key enabler to achieving our efficiency and control objectives and supporting the business effectively as it grows. We use an ERP which forms the backbone of our operations. Although we use SAP wherever feasible, we also use specialist solutions such as a treasury management system (TMS), although we plan to replace our current system with another specialist TMS in due course. We also use proprietary software for reconciliation and journal posting and we are implementing solutions for human resources and travel & entertainment expenses management.

Currently, we connect our TMS to our banks to obtain bank balance information, but we still receive bank information by email in some cases, so we need to collate these balances manually before creating our daily cash position, forecasting cash flow and managing internal funding. This is inevitably a complex process given that we manage around a significant of our global cash position across 80 currencies. However, we are currently centralising our cash management activities with our strategic banking partner Citibank in London, which will simplify this issue, but this is a lengthy task given the localised nature of our business and the number of countries and legal entities involved.

GFO evolution

Although our GFO was primarily transaction-focused to start with, we were able to become more analytical and customer focused as processes became more automated, with operational requirements largely restricted to exceptions management. We therefore became involved in a wider range of activities, such as balance sheet analytics, engaging with business units to understand and manage financial risks and opportunities. Now, we are entering a third phase, focusing on strategy, building trusted partnerships with our business units, and identifying further opportunities to add value.

Responding to evolving trends

Treasury has become a highly collaborative space, which is a welcome development, as treasurers and finance managers seek to find ways of solving common challenges. In an increasingly tough business environment, we liaise closely with our local treasury association, the Irish Association of Corporate Treasurers to share experiences with other treasurers and understand changing cash and treasury management trends. Similarly, we work with our business partners, particularly our primary cash management bank Citibank, to discover and help shape trends and innovations, such as through their innovation labs.

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