Omnicom’s decentralised structure creates cash management, risk management and banking challenges that aren’t faced by more centralised companies. Even though Omnicom had centralised most of its cash management activities through integrated, regional in-house banking structures, they did not have full visibility into all of their 3,500 accounts at more than 150 banks. Nor did they have sufficient control of all bank accounts across the Group to know whether certain accounts were necessary or appropriate.

As Conor Leyden explains “we worked with Citi and several other partners to create GCCS (“Global Cash Control System”) – an integrated cash and bank account management system whose benefits have well exceeded our expectations.”

Corporate structure

First and foremost, GCCS has made groupwide communications more efficient, so that key financial management decisions can be made more quickly – an invaluable advantage in today’s volatile global economy. A good example of this was as the Greek financial crisis unfolded, Omnicom Treasury knew immediately how much cash was in which local banks among their six independent Greek operating companies, and was able to take direct actions accordingly. GCCS has also enabled Omnicom to reallocate business from non-relationship banks to its core banks, strengthening these relationships and improving the overall pricing of bank services. In addition, the system is entirely electronic; no paper is required from start to finish. Another critical mark of the solution’s success is the positive reception from the operating units. Daily balance information is provided to GCCS directly from the banks without the need for operations to become involved. Treasury approvals to open and close accounts are provided within 48 hours and generally the same day. Responsibility for assessing counterparty risk is also passed to Omnicom Treasury.

GCCS has delivered annual cost savings of around $1m with more anticipated savings to come. The benefits of the GCCS solution to Omnicom can be summarised as follows:

• Total control of all bank balances and accounts – the benefit and assurance of knowing where every cent is anywhere in the Omnicom world every day.
• Direct liquidity reallocation and optimisation, which has reduced the amount of cash held outside core banking structures by well over $50m. This cash is now available for other corporate purposes and reduces borrowing costs.
• In the past 18 months more than 500 bank accounts have been closed. The direct financial benefit of these closures to date exceeds $700k per annum. Before the year is out, closure is anticipated of an additional 250 accounts, adding a further annual benefit of around $300k.
• The system incorporates automatic work flows to standardise and most efficiently manage Omnicom’s bank account and cash control processes with all of its agencies.
• GCCS has enhanced Group cash forecasting and targeting capability.
• It has enabled rapid and efficient on-boarding of new acquisitions into the company’s cash management and banking structures.
• The system also provides granular and comprehensive management reporting, further enhanced by automatic integration with other Treasury and Group financial information.
• Omnicom now has the ability to immediately assess the impact of changes in market and banking conditions and take appropriate action in relation to cash balances and the operation of accounts.
  • Citi’s Treasury Vision system is the portal for the SWIFT reporting of all bank accounts and the collection point for daily account information and is a key component for GCCS.
  • Omnicom Treasury also worked with developers to create the GCCS database, internal online portal, and workflows utilising OnBase, as well as advanced internal reporting utilising IBM Cognos.

Conor Leyden concludes “GCCS has been a game-changer for us. Omnicom’s business culture is built on leveraging new trends, innovation and best practices; it’s a culture of continuous improvement that also strongly permeates our Treasury operation. GCCS is a very clear illustration of this. It has delivered to our decentralised and globally diverse organisation a wide range of financial risk and banking management efficiencies and functionality that were virtually impossible before – and certainly could not have been achieved within any realistic timeframe. We would welcome an opportunity to share what we’ve done with others who face similar challenges.”