Darrell Thomas, VP and Treasurer at Harley-Davidson and recent Treasury Today Adam Smith Award winner talks about the unique nature of the treasury department at Harley-Davidson and the work it is doing to support the business.

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What responsibilities does the treasury have at Harley-Davidson?

In addition to the primary treasury function of managing the cash resources of the company – this includes collections and investments, to borrowings and shareholder distributions – we are also charged with overall risk management. This involves a host of activities including insurance, worldwide business continuity management and financial risk management measures such as hedging currency and commodity exposures.

In addition to this, we look after the relationships the company has with banks and ratings agencies. We also manage the assets in the retirement plans as well as the firm’s working capital and capital structure. It is a lot, but it doesn’t feel that big because I have a great team supporting me.

Why does business continuity planning sit within treasury?

It is a function that does not necessarily have a natural home and I felt my risk management team and I could add some value to it. It has worked well. We have identified the key processes around the organisation and put a business continuity plan around these which informs each how to continue to operate in a range of disaster scenarios bearing in mind normal-day-to-day activities or support levels may not be available for some time.

All processes have been divided into high, medium and low tiers, giving each a degree of prioritisation. High priority processes, depending on the event, would determine which organisation attracts the resources first. For example, in the event of a major IT-centre outage resulting in a company-wide impact, tiering determines which processes must come back online first.

How is treasury supporting the organisation’s ten-year strategic plan?

The whole company is focused on the ten-year strategic plan to build the next generation of Harley-Davidson riders globally. Everything we do in treasury is designed to support that plan. When we work with other parts of the organisation we make sure we are all working together.

There are many ways that we support the organisation, but most crucially we must ensure cash resources are available, in a timely fashion, to support the company’s various marketing and product development programmes.

In other areas such as FX, we have also worked to protect the company against downsides as the recent strengthening of the dollar has not been in our favour. Thankfully we employ an active currency hedging programme, but this only buys us time. Therefore, we have been working with the procurement teams to source buying opportunities in currencies the company is exposed to; using local currency to meet local expenses, creating natural and longer-term hedges.

How is treasury using technology to improve how it supports the business?

Technology plays a key role for us, especially when it comes to reducing the number of manual tasks we must do. The most important part of this has been the rollout of a truly global treasury workstation, executed under a more comprehensive five-year game-plan to deliver standardisation.

This has improved our processes significantly, and reduced risk to our organisation. Also, the automation of low-value, manual work has enabled headcount to be halved in accounts payable and freed up people to staff international treasury positions and add more value.

Having laid the digital foundations, my eye is now on additional opportunities from AI solutions as a means of further increasing the productivity of our treasury staff.