Photo of Ans Michiels, Deutsche Bank, Séverine Le Blévennec, Honeywell and Ellen Lauwers, PwC.
Honeywell is a Fortune 100 software-industrial company that recorded US$41.8bn in sales in 2018 and does business in more than 970 sites around the world.
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Honeywell treasury has leveraged technology over the years in order to achieve 100% daily cash visibility into Quantum treasury management system (TMS). This, together with 27 EMEA in-country cash pools and two cross-border cash pools, works very well for day-to-day cash management of the company’s 473 EMEA affiliates.
Honeywell’s in-house bank, based in Brussels, is the ultimate header of 14 euro and two US dollar cash pools (one in Brussels, one in Singapore). It also lends and borrows in the form of intercompany loans to the 15 non-euro, non-US dollar EMEA cash pool headers and to individual affiliates in EMEA, APAC and the Americas.
All FX exposure related to the in-house intercompany loans’ portfolio is hedged on the side of the in-house bank. Any euro and US dollar excess cash is then invested in the money markets. The in-house bank balance sheet is over US$6bn, including a US$2bn short-term investment portfolio.
As part of ongoing optimisation of treasury operations, Honeywell wanted to automate the daily cash forecast of its in-house bank to accurately predict its euro and dollar end-of-day balances of the in-house bank. It designed seven robotics process automation (RPA) workflows to automatically consolidate data from the TMS, e-banking custom reports and emails.
Over the past eight years Honeywell has:
Redesigned all treasury processes.
Built or revamped eight TMS interfaces.
Removed hundreds of manual processing steps.
Achieved 100% daily global cash visibility over all its 2,277 bank accounts and treasury investments.
The solution has resulted in the use of less than ten key spreadsheets by EMEA treasury for its management across 54 countries as well as the in-house bank.
Even more importantly, the company has gained a high level of agility, transparency and flexibility that allows it to successfully address the challenges of a large, complex corporation in constant change with an ever-leaner team.
Honeywell is now pursuing its treasury digitalisation route, building on its treasury transformation over the past eight years, but filling the remaining gaps with a newer technology: RPA.
The new daily liquidity management process of the in-house bank is extremely quick and user-friendly. The Senior Treasury Analyst is expected to save two and a half hours per day. The seven RPA processes (244 detailed steps) enabling these efficiency gains carry very low risk and require very limited maintenance.
The automation allows to: expand the scope of the accounts being analysed from 40 to 162. The improved cash forecast accuracy is expected to reduce US dollar idle cash from US$9m to less than US$4.5m, increasing external interest income. This solely, disregarding time-savings, means a payback period below three months and a five-year IRR well above 2,000%!
Additionally, a robot doesn’t take sick leave and holidays, is accurate and reliable. The solution helps to:
Reduce stress level in a dynamic environment.
Increases employee satisfaction.
Frees time up for work on further strategic and automation projects.