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Best Cash Management Solution Highly Commended: Hewlett Packard Enterprise Company

Published: Jan 2020

 

Photo of Priyanka Ghosh, Bavani Prakhesh, Victor Grado and Przemek Cupryniak, Hewlett Packard Enterprise Company and Sridhar Kanthadai, J.P. Morgan.

John Donegan

Treasury Director – APJ & EMEA HPEFS

Dublin, Ireland

The Hewlett Packard Enterprise Company (HPE) is a multinational enterprise information technology company based in San Jose, California. The firm was formed in 2015 as part of the restructuring of the Hewlett-Packard Company – HPE was spun off to focus on enterprise offerings (servers, storage, networking, consulting and support) and financial services.

in partnership with

Consolidating bank relationships to improve efficiencies

The challenge

Since its reorganisation in 2015, the Hewlett Packard Enterprise Company (HPE) has been evaluating solutions to transform its treasury architecture which was becoming sub-optimal, due, in part, to the changing treasury and banking landscape, coupled with restructuring activities over the years.

Operating up to four entities in each of its 15 Asia Pacific markets, HPE was having to manage 200-plus banking accounts, held with over 20 banking partners. That meant large costs in order to maintain the sheer volume of bank accounts. The vast infrastructure was also running on multiple legacy systems that were ingrained with manual processes.

HPE sought a comprehensive cash management solution to fulfil three objectives; to simplify its banking and bank account structure, enhance its liquidity consolidation and yields on idle funds, and improve efficiencies in processes through automation. It therefore needed a treasury solution that would integrate with its systems, as well as one that was innovative and scalable to support the future growth of the business.

The solution

In 2018 HPE issued a global banking review and earlier this year began implementing a comprehensive cash management solution for its Asia Pacific operations with J.P. Morgan.

In an extensive exercise to reduce the number of banking partners, HPE commenced consolidating its transactional flows to a handful of core banking partners, thereby reducing the total number of banks required in the region. HPE expects to reduce the number of bank accounts it manages by up to 40% in APJ.

In addition to the notional pooling structure in Singapore, supported by J.P. Morgan, where balances are consolidated automatically from five key unrestricted markets including Hong Kong, Japan, Australia and New Zealand, HPE wanted to expand the scope for better optimisation and consolidation of funds in the restrictive markets across the region.

To meet its objective of reducing bank accounts, HPE is implementing a Virtual Account Management (VAM) solution, supported by J.P. Morgan, in countries where the product is available within the region, with Singapore being the pilot country.

Finally, to optimise its treasury processes, HPE is deploying J.P. Morgan’s Virtual Branch solution, which will digitise the documentation processes required in tax and cross-border payments where possible. This has improved efficiency, freed up manual resources and reduced human error.

Best practice and innovation

HPE demonstrated foresight in its treasury transformation, having embarked on the journey since the company’s inception back in 2015. In the years leading up to the banking review in 2018, it took the time to learn about the best in class solutions and innovations in cash management which led to the seamless roll out.

HPE also took the long-term view in the overhaul, selecting solutions that were innovative that it could scale up as the company expands going forward. Implementation is a phased approach which started in the middle of 2019 and is expected to be completed by early 2020, and will result in minimal disruption to operations.

Key benefits

The fully implemented solutions will enable HPE to:

  • Reduce the number of banking partners and decrease the number of bank accounts by up to 40% in region.
  • Improve liquidity consolidation and enhance yields on balances in restrictive markets.
  • Fully automate its treasury processes.
  • Generate significant cost savings from the consolidation of banking relationships, reduction in banking fees and higher yields on balances.

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