David Deranek, Director, Enterprise Treasury Operations and Julie Qualiato, CTP – Senior Director, Enterprise Treasury Operations.

HCSC Blue Cross Blue Shield transforms its treasury function in a sweeping digital upgrade

The challenge

The treasury team sought to unlock efficiencies and drive the business back towards profitability. The key to this strategic approach was to harness data to drive more informed decisions.

Under a legacy approach, HCSC’s treasury operated multiple independent financial platforms across cash management, short- and long-term forecasting, investment management, corporate acquisitions, cash and investment and treasury systems, to name a few. Data, and in many cases decision making, were siloed by function. This structure diminished the opportunity for collaboration and optimal outcomes.

Significant challenges existed around integrating legacy systems and disparate unconnected platforms to reconcile data stored in separate accounting systems. Treasury needed to become more data-driven, with the idea that elevating data proficiencies would enable the team to make better decisions. This in turn would give treasury a greater influence within the business enterprise, making treasury a strategic partner to the business.

The solution

To begin the process, the treasury team began operating under an organisational mandate. This gave treasury an elevated level of strategic guidance to senior leadership, giving the team the opportunity and authority to become an integral part of running the company’s operations.

As treasury began the task of harnessing and structuring data, the process soon revealed that every single aspect of the business was swimming in untapped data.

“As an organisation, we began asking ‘how can we think better with that data?’ ‘Can we make better decisions as treasury professionals with that data?’ And ‘are we equipped to leverage the power of data?’ explains David Deranek, Director, Enterprise Treasury Operations.

A first phase of the overhaul involved building out and developing an in-house Treasury Enterprise Reporting System (TER) to consolidate data from disparate external treasury platforms and structure an in-house framework to integrate external sources. Treasury was also tasked with engineering a new system for reporting from the TER and engaging leadership on the transformation.

Best practice and innovation

The re-evolution of HCSC’s treasury has empowered the team with real-time BI tools, systems enhancements, and process improvements. The solution includes python scripts, Microsoft-Access to insert data and Axway to redirect files to internal and external entities.

Perfecting the ability to cash forecast was also instrumental to allow the company’s treasury and investment teams to improve bottom-line financial performance. The treasury team has improved cash visibility through a customised daily dashboard reporting analysis. A new customised BI reporting process provides insight on cash positions, daily treasury dashboards, strategic investment allocation, reconciliations, treasury financials and compliance.

Teams automated no fewer than 14 cash management functions that included 75 different processes. Treasury developed a ‘Capability and Maturity’ matrix to measure the efficiency of treasury processes, assessing how well teams were supporting HCSC’s strategic mandate.

APIs and connectivity services now bind treasury functions with network entities, both within the company and external business partners, enabling straight through processes that connect with banking partners, ERPs, trading platforms, and systems that enhance visibility into available cash, liquidity and financial exposures.

Key benefits

• • The in-house developed Treasury Systems TER database has enabled treasury to create high level digital analytics, dashboards and cash position reporting using BI tools.
  • The process has minimised human errors and saved working hours.
  • The digital transformation has reduced redundancy, improved decision-making efficiency, and repurposed liquidity and capital to the business where it is needed most.
  • The new model facilitates oversight and management of subsidiary cash, inter-company loans and funds transfer methodologies, freeing up trapped cash within subsidiaries.
  • Treasury now acts as its own investment manager, a true money manager against the backdrop of HCSC as a health insurer.
  • The reforms have enabled treasury to deploy over a third of the group’s active working capital to grow the business.

The Adam Smith Awards is the industry benchmark for best practice and innovation in corporate treasury. The 2021 Awards attracted a record-breaking 309 nominations spanning 40 countries. To find out more please visit: https://treasurytoday.com/adam-smith-awards.