Transformation at Iron Mountain leaves cash in peak condition
Published: Sep 2024
Best Cash Pooling Solution
Overall Winner
Iron Mountain
Photo of David Buda, Iron Mountain and Niraj Mandpe, J.P. Morgan.
Sergio Martin
Assistant Treasurer
Iron Mountain is a global leader in information management services. Trusted by more than 240,000 organisations around the world, and with more than 1,400 facilities in over 60 countries, Iron Mountain helps its customers to unlock value and intelligence from their stored digital and physical assets at speed and with security, while helping them meet their environmental goals.
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The challenge
Identify a means to reduce the number of bank accounts and incurred fees; eliminate overhead costs and administrative inefficiencies; minimise inaccessible cash, impacting the ability to reduce debt; minimise unnecessary borrowing costs and loss of investment returns.
Transforming the company’s cash management processes was complex. Operating in over 60 countries across 50+ currencies, Iron Mountain’s cash was dispersed across approximately 700 global bank accounts. Manual cross-border cash movement, often managed by local finance teams, compounded the problem, increasing administrative burdens and causing a lack of cash visibility at Corporate Treasury. Treasury used cash buffers, and depended on external sources for funding, resulting in significantly increased borrowing costs.
Additional challenges lay in the company’s diverse operations where it managed funds separately – both for its REIT and non-REIT entities – and a daily operational cash requirement of US$175m.
The solution
To consolidate and streamline its cash management operations across multiple entities, countries and currencies, Iron Mountain devised a sophisticated solution with its banking partner J.P. Morgan. This involved creating multi-entity multi-currency (MEMC) notional pools for both its REIT and non-REIT businesses in key regions across Asia Pacific and Europe and a USD physical cash pool in North America. This innovative approach facilitated a ‘follow-the-sun’ structure, enabling excess liquidity to flow seamlessly from Asia and Europe to the United States on a same-day value basis.
At day’s end in each country, excess cash automatically flows into regional pools in Hong Kong and Luxembourg. After Asia and Europe’s working day ends, surplus funds are automatically consolidated within the US pool, managed by corporate treasury. This process optimises global liquidity, reduces administrative tasks and empowers Iron Mountain’s treasury team to focus on more strategic, value-added activities.
Iron Mountain’s implementation of multiple MEMC notional pools represents a paradigm shift in treasury management practices, underscoring the company’s commitment to innovation and excellence. By addressing the challenges of a global operational organisation, Iron Mountain has achieved significant improvements in financial performance, cash visibility and control. This included minimising cash balances, maximising liquidity, reducing leverage and gaining operational efficiencies through the elimination of manual processes.
Best practice and innovation
Iron Mountain’s notional pooling structure has unlocked approximately 28% of global daily liquidity, equating to US$50m. These funds have been used to pay down debt, reduce interest expense and generate favourable returns from investments.
Iron Mountain’s proactive consolidation has also led to the closure of 10% or over 70 bank accounts in 2023 alone, significantly reducing banking fees, overhead costs and administrative inefficiencies. The company has reduced borrowing fees and corporate treasury now has a global cash view via a unified portal, enhancing risk management and financial transparency.
Automated fund centralisation enables same-day access for entities needing temporary cash, minimising idle funds, enhancing cash forecasting and mitigating funding risks. Local finance teams are relieved from daily cash monitoring as needs are met automatically from the MEMC regional notional pools. Additionally, human resources, a key partner in this journey, benefits from direct funding of global payroll accounts, eliminating the need for advanced funding.
Key benefits
Cost savings.
Process efficiencies.
Return on investment (ROI).
Increased automation.
Risk mitigation.
Improved visibility and control.
Reduction in number of banking partners/bank accounts.
Reduced manual intervention.
Increased system connectivity.
“Although led by Iron Mountain’s corporate treasury team, multiple groups provided critical expertise throughout the selection and implementation process, including Accounting, IT, AR and AP, Procurement, Legal, Tax and the business units. This has been a truly multi-cross departmental effort, which will benefit the whole organisation.”
Sergio Martin, Assistant Treasurer
Niraj Mandpe
Executive Director, Global Payments – Diversified Industries, J.P. Morgan
Iron Mountain undertook an ambitious multi-year journey to consolidate liquidity and cash management with J.P. Morgan across 60 countries. The result is a fully automated “follow-the-sun” notional pooling structure, offering comprehensive visibility over global liquidity and minimising the need for FX transactions, hedges and manual transfers. This has helped Iron Mountain minimise idle cash, enhance forecasting and mitigate funding risk. Although led by corporate treasury, this has been a truly cross-functional effort.
We are delighted for this recognition. All of us at J.P. Morgan congratulate the entire Iron Mountain team on the receipt of this award.
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The Adam Smith Awards are the industry benchmark for best practice and innovation in corporate treasury. The 2024 awards attracted 389 nominations. To find out more please visit treasurytoday.com/adam-smith-awards
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Cost savings.
