Photo of Juan Rajlin, VP & Treasurer.

‘Googleyness’ proves a key factor in this truly outstanding A-Z team effort

Key decision to proceed despite global pandemic

Google’s treasury department had already set in motion a cross-functional treasury management system (TMS) transformation prior to 2020, as part of parent company Alphabet’s multi-year finance systems modernisation journey. The treasury team’s objective was to upgrade its technology to support growth for the rest of the business. When the pandemic hit in March 2020, treasury faced an inflection point. The team needed to decide if it should proceed with its transformational initiatives or pull back, given the many personal and professional challenges presented by the health crisis. The team decided the initiatives were too important to delay and committed to moving forward not only with the systems modernisation efforts, but also a number of new transformational initiatives targeted at addressing societal challenges related to racial equity, as well as COVID-19 and its impacts.

The nimbleness of the team and its ability to leverage state-of-the-art Google productivity tools to continue to collaborate at scale and speed enabled the high throughput needed to accomplish its objectives. In addition, treasury’s leadership openly invited the teams to re-prioritise their 2020 work once the pandemic hit, allowing space to focus on the organisation’s most important initiatives. Because these were major projects, treasury spent time upfront developing a clear understanding of the value each project would bring to the business and the complexity involved in the transformation.

Task force is established

A Google finance systems task force was formed with leadership representatives from treasury, finance, operations, project management and corporate engineering. The task force worked in consultation with technology vendors and bank advisors with the over-arching goal of putting in place a best in class infrastructure that would meet the needs of the organisation for the next 20 years. Solutions would have to be able to scale with the growing business. To ensure scalability, the treasury team’s objective was to transform business processes with a minimal amount of customisation, to avoid painful re-implementation of customised systems in the future.

Scale and scope of strategic initiatives test treasury’s mettle

Implementing a single strategic initiative during a pandemic would have been challenging enough, but putting five in place at the same time is truly noteworthy. That is precisely what this treasury team did.

The following are summaries of what the treasury team accomplished this past year:

Go-live of new TMS and upgrade/merge with core ERP – implemented SAP Treasury & Risk Management in a cloud-hosted instance through a partnership between Google Cloud and SAP. In addition to the typical complexities associated with a management system implementation, treasury co-innovated with SAP to build out a completely new foreign exchange (FX) module, which is now part of the standard SAP TMS offering. Prior to this, treasury had disparate systems for FX and cash that did not communicate with each other, requiring manual uploads of spreadsheets. Now, exposures directly enter SAP with rule sets applied automatically to generate hedge requests. The full management system implementation and FX module co-innovation were both completed within two years, a remarkably short timeframe.

Creation of US and global in-house banks – launched two in-house banks (IHBs) in partnership with key partners Citi and Wells Fargo. By linking more than 1,000 company bank accounts spread across 60 countries to the new IHB, the treasury team established a cash concentration structure using zero balance accounts to drive efficient cash management worldwide, achieving a multi-billion dollar working capital improvement. To further increase efficiency, the new system also segregated treasury flows from other commercial activity and utilised electronic bank statements to automate journal entries. This structure was also underpinned by the simultaneous deployment of a new international treasury team in Dublin to drive the success of the global programme.

Diversity and inclusion (D&I) money market fund (MMF) – as part of the company’s five-year sustainability strategy, which strives to incorporate sustainability into every function of the company, treasury partnered with J.P. Morgan, investing US$500m in the launch of ‘empowering change’ money market share class to provide economic opportunity to under-served communities. The share class is distributed through MDI and CDFI partners, supporting minority and diversity-led institutions with a new revenue stream while maintaining a net yield competitive with other money fund investments. This initiative builds on Google’s US$180m partnership with Opportunity Finance Network to support historically under-served local businesses through the Grow with Google Small Business Fund and Google.org Grant Programme in March 2020.

“Google is committed to helping create sustainable equity and economic opportunity for all,” said Juan Rajlin, Vice President & Treasurer at Google. “We know that racial equality is directly linked to economic opportunity and are proud to partner on the Empowering Change programme, which will help create new business opportunities for minority institutions.”

Record-setting Sustainability bond issuance – in August 2020, Google issued US$5.75bn in sustainability bonds, with Goldman Sachs, J.P. Morgan and Morgan Stanley as lead underwriters – the largest sustainability or green bond by any company in history. One of Google’s objectives in issuing these bonds is to help develop this relatively nascent asset class by providing a template that corporates can use for their own issuances. The proceeds from these sustainability bonds will fund ongoing and new projects that are environmentally or socially responsible and enable investors to also engage in tackling critical sustainability issues.

Stock administration platform and employee trading programme (ETP) – Google migrated to a new stock administration platform covering its more than 100,000 employee equity recipients, working with Morgan Stanley to implement. The project entailed a redesign of the equity ecosystem, file transmissions and interactions between the stock administration and other platforms to automate and improve countless day-to-day processes and provide better service to Googlers. The new platform also coincided with the launch of an industry-first, fully automated Employee Trading Programme (ETP) with an online expedited approval process for employee sale plans. The programme saw robust participation by more than 8,500 employees around the globe during the first enrolment period.

‘Googleyness’ enables out-sized achievement

The treasury team gives a lot of thought to team structure and dynamics, as part of a company-wide focus on “Googleyness”, which emphasises collaboration, going the extra mile for colleagues and users, and challenging conventional wisdom.

The treasury team has embraced these core values, constantly looking to partner with each other to achieve critical objectives. A core focus over the last several years has been ensuring psychological safety for teammates, assuming good intent in interactions and having a blame-free mindset. This allows treasury to robustly debate the appropriate approach to problems and new initiatives in a way that minimises the impact of hierarchy or job title, and facilitates strong buy-in for the final decision since it is informed by input from all levels of the organisation. The camaraderie this mindset engenders is what allowed treasury to successfully advance multiple initiatives designed to transform its function in the middle of the pandemic and accomplish what might have otherwise felt impossible.

“Due to the company’s growth, treasury has often found itself playing catch up. With this ambitious treasury transformation, anchored by several large strategic projects, the team is creating a vibrant and innovative foundation for the next 20 years,” concludes Rajlin.

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