Photo of Elliott Blissett, Bank of America Merrill Lynch and Kamla Rhodes, ConocoPhillips.

For several decades, ConocoPhillips’ cash management and banking functions, which included cash positioning, investments, foreign exchange trading, bank account administration and debt administration, were split between the company’s headquarters in Houston and offices in London. This project migrated the entire cash management and banking team to Houston in just six months.

Entire global cash management activities moved to Texas

The challenge

For several decades, ConocoPhillips’ cash management and banking functions, which included cash positioning, investments, foreign exchange (FX) trading, bank account administration and debt administration, were split between the company’s headquarters in Houston and offices in London.

The six-member Houston team managed treasury operations in the Americas and had oversight of the global policies for banking, investments and FX, while the five-member London team managed cash and banking operations in Asia Pacific and Europe, the Middle East and Africa (EMEA).

Changes in ConocoPhillips’ business landscape created the opportunity to analyse the way the company approaches cash management to ensure it was aligned with its overall strategy. The result of this assessment was a structural and functional change in the cash management and banking functions to increase the efficiency of working capital management and to centralise the team in Houston.

It was recognised that having teams in two locations resulted in inconsistent processes and suboptimal use of tools. The size of each team created business continuity risks due to the insufficient coverage and lack of career development opportunities. There was also a need for better cross-training of personnel to ensure smooth operations in the absence of key team members.

“All of these factors determined the need to centralise the structure to better align it with the company’s changing business needs,” says Judy Bouchard, Banking Director at ConocoPhillips.

The solution

The project was approached in three phases to mitigate risks and ensure success:

• Phase 1

  The cash management and banking centralisation project involved identifying the exposure, developing a coverage plan and evaluating alternative pooling structures to enhance working capital management and streamline the G&A structure.

• Phase 2

  Was developed around implementing a new multi-currency pool structure as an overlay of the existing pool to further reduce FX activities and shorten the process time. In order to manage all of the company’s cash and banking functions centrally from Houston, the team had to adjust for various time zones and cut-off times to accommodate international business transactions as well as automate processes to drive efficiencies. As part of the project, a staffing plan was developed, reducing the total number of cash and banking personnel by three and a half full-time employees.

• Phase 3

  Was centred on change management to ensure risk mitigation plans were in place and ample time was provided to evaluate processes, implement changes and test/retrofit before the centralisation of operations in Houston in June 2017.

ConocoPhillips is honoured to receive this Adam Smith Award. We have the highest level of commitment to best practices within cash management standards and we are pleased to be recognised as a best in class treasury organisation among the world’s leading corporations.

– Judy Bouchard, Banking Director, ConocoPhillips

Best practice and innovation

Perhaps the most innovative aspects of this centralisation project have been the global scale of the initiative and the small size of the team involved. For a company as large as ConocoPhillips to successfully move its entire global cash management and banking activity to the US is unprecedented in this industry.

The effectiveness of the change management plan is evidenced by the fact that no aspect of the business was adversely impacted in any way.

“This game-changing initiative allowed for critical role optimisation, making it possible to build the cash and banking expertise in the company’s Houston headquarters through training and strategic hiring,” says Bouchard. “This level of cross-training ensures that fully trained staff are ready to step in to fill roles should they be called upon – helping to maintain continued operations under any circumstances. Perhaps the most impressive aspect of this project has been the ability of a global company of our size to centralise its cash management and banking functions so effectively in one region.”

Key benefits

• Enhanced business continuity.
• Reduced exposure.
• Improved risk management.
• Enhanced productivity.
• Process standardisation.
• Improved efficiency.
• Cost savings.

Key learning point

Centralising the global cash management and banking functions into one location was an important success for the finance function and the entire company, as the team was able to enhance business continuity, reduce exposure and risk management, enhance productivity through standardised processes, and provide a sustainable model and team structure.

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