The challenge:

The GM group is implementing an ambitious treasury transformation project across Asia which forms part of a global initiative to optimise treasury operations. Before embarking on the project, GM was using several local banks for payments and cash management services in different countries across Asia. Core treasury activities were carried out by in-country treasury teams and without a treasury management system (TMS) in place, processes were largely manual, resulting in inconsistent accounting and treasury processes from country-to-country.

The goal of the project was to improve GM’s treasury operations by automating and streamlining processes. The project looked to implement a systems-based solution which could handle treasury activities such as moving cash between bank accounts, recording foreign exchange trades, reporting cash balances and tracking debt balances.

The solution:

In 2010, GM’s US treasury operations had selected the system and by 2013 completed the US implementation. GM began to roll out the project in other regions – and in 2013, the Asia project began. “The first step that we took was selecting our regional partner banks,” says Niyant Shah, Manager, International Operations at GM. “We invited some of our global partner banks to participate, and then selected two banks following a comprehensive evaluation process focusing on a variety of different criteria including technical and SWIFT capabilities, in-country capabilities, pricing structure and geographical coverage.”

After selecting the two banks, the next stage was to switch payments and receivables activities from existing local banks to the two regional partner banks. GM also standardised bank account structures across the region which included a concentration level account used to carry out treasury activities, the use of dedicated operating accounts for activities such as payables, receivables and tax and also a two-way zero balancing structure was put in place to move funds between the operating accounts and the concentration account. “It is crucial that we do not disrupt daily operations when we transition bank activities,” says Ying Cao, Manager, International Operations at GM. “In order to achieve this, we adopted a staggered approach to transition only one type of activity (eg cheque printing) at one time and a new service only went live with the regional bank partner after successful test and pilot runs.”

The second aspect of the solution is the implementation of a single TMS across the region. The TMS, which acts as a single source for the company’s global debt position, letters of credit, fixed income, FX and commodities transactions, is also being used to execute core treasury activities such as investments and FX trades.

Best practice and innovation:

Teamwork has played a crucial role in the success of the project. “There has been a lot of cross-functional and cross-geographical involvement across GM – we were working closely with the corporate team in the US as well as with the local teams in-country,” says Shah. “From a core functional perspective, the treasury team was driving this – but there was also involvement from accounting, IT, legal and other functions. At the same time, we were working very closely with our regional banking partners to make sure that we were all aligned.”

GM’s treasury transformation project is being carried out to a very aggressive timeline, which is particularly impressive given the scale of the project. “This has been a multi-year, global initiative for GM. We were not looking to make incremental changes here and there,” says Manish Gulati, Treasurer, International Operations at GM. “We changed our bank account structure because we had a model in mind to cover every country; we replaced existing banks with two regional banks; we went from manual to automated processes – and instead of having the local team managing the accounts, we went to a model whereby activities were managed by a regional team. No stone was left unturned. We are excited about receiving the award and the external recognition it brings to our work.”