Kimberly-Clark is a leading global health and hygiene company employing more than 55,000 people globally. The company’s best known brands include Kleenex, Scott, Andrex and Huggies. In 2006, Kimberly-Clark reported sales of $16.7 billion. Today the company has operations in 37 countries, sales in more than 150 countries and a customer base of 1.3 billion people.
Rebecca Wilson
Treasury Manager Europe
Rebecca Wilson FCCA MAAT Cert ICM Rebecca began her career as one of the youngest stockbrokers in the City, training straight from school, however she found that her talents lay in Accounting and followed that route. After a series of positions working across Europe and the Middle East she began working at Kimberly-Clark in their brand new European Shared Service Centre as part of the Financial Reporting Team. She moved to Treasury in 2003 as manager of the European Treasury Team and incorporated within her responsibility the running of the global in-house bank this year. Her out of work interests are her three children.
This month Rebecca Wilson talks us through the challenges and achievements of the major in-house bank project undertaken by Kimberly-Clark in the last year. Kimberly-Clark was the bronze winner of the 2007 Alexander Hamilton award in the Cash Management category for this project.
How are your treasury operations organised?
Our group treasury is located in Dallas, Texas. North American cash is controlled directly out of the group treasury and European cash is centralised in our in-house bank located in Luxembourg. Our European Shared Service Centre in Brighton (UK) provides back office support for the in-house bank’s day-to-day operations. Latin America and Asia are organised on a more traditional country-by-country basis with a co-ordinator across each region who facilitates integration with global functions.
Why did you originally outsource some of your treasury operations?
When Kimberly-Clark acquired Scott Paper Company in 1995, it inherited Scott’s in-house banking operations that were rather limited both in volumes and complexities. Kimberly-Clark decided at that time that it made sense to have a professional third party provider managing the day to day operations of the in-house bank.
How did you keep control of these processes?
The oversight of the operations was managed centrally by the group functions and a resource was dedicated to facilitate and co-ordinate the information flow between the outsourced operation and the affiliates. We used detailed operating procedures to provide appropriate guidance to minimise the risk of miscommunications and incorrect transaction executions.
Why did you decide to bring them back in house?
By 2005 the size and scope of the in-house bank had expanded considerably. With over 100 affiliates as customers, the volume and complexity of the business was significantly higher.
Our old solution had served us well, but we had outgrown it. At the same time KC had made significant investments in new systems and moved to a Shared Service Centre model to support the European operations. We decided that with this increased size and new capabilities in Europe, it made more sense for us to bring the in-house banking operations back under our direct control and develop an integrated system solution.
How did you start the insourcing process?
After we made the decision to bring this operation back in house, we also decided that it would be a good time to upgrade our cash management system in North America. So we put the two projects together to get one system that could cover both the North American cash and the in-house bank.
We identified the key people in North America and Europe that would need to be part of the project. I was running the European cash management so I was key on this side for the systems implementation. We also had people from Tax, Financial Reporting and Legal. Assembling this cross functional team was crucial to making sure everything was done on time and properly.
The first thing we did was spec out exactly what we needed. We made a significant investment in reviewing the existing processes and challenging ourselves to identify best practices for the new in house operations. The specs were quite detailed and mapped out all of the steps and processes that would be undertaken by the in-house bank.
What happened next?
We went through the normal RFP process. Our RFP was very detailed. We scored through the RFP and settled on two suppliers to provide demonstrations of their system capabilities. We did four days of demo with each supplier, so they were quite extensive, going through exactly what our processes were.
The demos were in August and in September we made the decision to go with SunGard Quantum. We then started to implement the system straightaway in October. We started recruiting. We had to fill four new positions, two of which I took from my existing cash management team and backfilled with other people. The other two were external people, one with bank experience and one from another corporation. As well as implementing the treasury management system we looked at other processes such as the whole bank account structure.
Implementing the whole system and transitioning existing relationships to the new in-house bank took us until June 2007.
How much work did you do with the bank account structure?
We had about 80 bank accounts. From an original set-up with multiple accounts by currency we streamlined the structure to 16 bank accounts globally for the in-house bank, taking full advantage of ‘end to end processes’ developed in our Shared Service Centre, system capabilities and in-house bank concept.
Our global affiliates do not all have foreign currency accounts – they only hold one external account in their own currency and then they hold a current account with the in-house bank. All the capabilities to efficiently process payments and receipts are built with the in-house bank along with full centralisation of currency risks.
What challenges did you encounter during the project?
The biggest challenge was getting the team up to speed on how to effectively work with a new treasury management system. There was a lot of learning.
Also we were working as a cross-Atlantic team, which is difficult in terms of meetings – there were a lot of meetings late at night – but challenging and interesting for the cultural dynamics between many countries.
We had an immensely short timeline. We committed to exit from the third party provider contract no later than September 2007. We imposed an internal deadline of July 2007 to ensure that we didn’t miss our true deadline in September. In that timeframe, we had to select and implement a new system, put in a new legal entity, resource a new team and put in a new account structure – we were working every hour of the day! On the other hand, the core project team members were all taken off their daily tasks, which were all backfilled. So throughout the whole process they were 100% devoted to the project, which I think was one of the main factors in the project’s success.
You are very much in the hands of the consultant who is implementing your treasury management system. So if your consultant has lots of brilliant ideas of how to do things, you can implement them. But if they only have a narrow view of how to do things, you’re going to be limited by that. We had very good consultants on the European side. I don’t know about the US side, but I know the project was a success, so they must have had the same high standard that we have here.
Is there anything you would have done differently in hindsight?
I think I probably would have split the projects in hindsight. Having the North American and European projects running in parallel meant that we were always having to check with each other when we were doing things. If there was a problem on one side it could affect the other side, it could slow down the system at times. We did manage to do it – I just think we might have been able to have a bit more time to spend on development in Europe if we had waited until afterwards to do the North American project.
So is the project complete now?
We’ve taken over everything that was outsourced and we are now managing it with our new system and processes. There are a few additional aspects of the project that are scheduled to be completed by mid-2008. All in all, we consider the project to be a great success – well planned and effectively executed.
In the near future, we also hope to implement an e-treasury function, which is like an intranet access that would mean all our affiliates will be able to access their accounts, download reports, request payments, advice of receipts and send through netting amounts.
