TOMATO CATCH-UP: Newsletter Issue 177 - October 2014

Your monthly resource on working capital, process optimization and issues relating to the world of corporate treasurers, IT professionals and bankers!

Introduction:

Does it just seem that there are more conferences in the fall than at any other time of the year? The 3rd Swiss Digital Finance Conference, the Financial Messaging Summit, and Structured Finance Congress in Stuttgart! You can find a summary of one; Martin Schneider is a speaker in another, and the Tomato Cup with the inscription “Keep Your Liquidity High” represents us in the third. We’ve gathered news about trade with China, gtnews’ transaction banking survey, budgeting, optimizing working capital, IT leadership issues and more. Enjoy this month’s variety of topics!

Your Tomato

Regula Spottl and the Tomato Team

Topics

Rückblick auf Financial Messaging Summit

Über 60 Zahlungsverkehrsspezialisten von Banken in der Schweiz besuchten den Financial Messaging Summit vom 29.9.14 in Zürich, um sich sich über den Neuen Schweizer Zahlungsverkehr bis 2018 (SIC4) zu informieren. SIX Group informierte über das Projekt und BBP über kommende Produkte.

Martin Schneider hielt ein Kurzreferat über das weltweit einheitliche Zahlungsformat CGI, auf welches sich Banken, Konzerne, Clearing Center und Softwarehersteller mit Hilfe von SWIFT geeinigt haben. Wie bei SEPA basieren die Dateien auf XML ISO 20022, bieten aber mehr Möglichkeiten, z.B. Bankkonten eröffnen oder mit einer Datei Zahlungen in mehreren Ländern und Währungen auslösen. Seine Präsentation…

Information der Kantonalbank Zürich „Einheit statt Vielfalt: Der neue Zahlungsverkehr kommt”

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Structured FINANCE Ausstellung, 12./13.11 in Karlsruhe

Dieses Jahr findet der Structured FINANCE Kongress im Karlsruhe Convention Center am 12. und 13. Nov. statt. Bei der Veranstaltung handelt es sich um den Kongress für moderne Unternehmensfinanzierung und strukturierte Finanzprodukte. Details und Anmeldung…

Wie letztes Jahr können Besucher Tomato Tassen mit “Liquidität” füllen, von den Angeboten profitieren und sie dann auf dem Bürotisch verwenden als Mahnung to “Keep your liquidity high!”

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China Allows Direct Currency Trading With Euro

Bloomberg - China's currency regulators have approved direct trading between the renminbi and the euro. The People's Bank of China said that these currencies will be directly convertible on the inter-bank foreign exchange market, which allows businesses on both sides to reduce costs. Details…

NZZ - Kein Umweg mehr über Dollar: China erlaubt direkten Handel zwischen Yuan und Euro

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3rd Swiss Digital Finance Conference: Zusammenfassung

Die 3rd Swiss Digital Finance Conference wurde am 11.9.14. in Zusammenarbeit mit der Hochschule Luzern und der Schweizerischen Informatik Gesellschaft (SI-FISP) durchgeführt. In einem Blog fast Ivan Büchi die Referate zusammen. Themen: Bitcoin, BPO, Crowdfunding, Digitale Zahlungen, Digitalisierung, Modular Finance, Mobile Payment – P2P Zahlungsmöglichkeiten und Digitalbanking. Details und Links zu einigen Präsentationen…

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gtnews’ Transaction Banking Survey Results

The recent gtnews survey found that corporate treasurers are reasonably satisfied with their banking relationships but wish that specific types of services their banks provide were better. Some evaluations by corporate practitioners:

70% rank their banking partners’ services highly overall
62% are satisfied with bank-provided foreign-exchange (FX) services (including hedging)
58% are satisfied with pooling/netting
56% are satisfied with payments services
less than 50% are highly satisfied with trade finance, liquidity and open accounts services
22% rated forecasting services highly.

Overall, corporates are serious about streamlining and centralizing treasury departments in part “due to the emergence of global interoperability standards, as well as the lack of cross-bank and cross-service portals,” suggests Penny Hembrow, Global Head of Banking, CGI. “Treasurers look to banks to help streamline their bank-to-corporate integration with intelligent routing and multi-bank, multi-service portals” Hembrow adds.

Details in gtnews Survey Reveals Corporates’ Growing Frustration with Banking Services with link to complete survey results… (registration required, free)

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One Approach to Budget Process

New budget proposals seem to look like previous ones, again and again. The reason for this is that people are “anchored”, which means that “one piece of information sticks in their mind and influences their interpretation of subsequent information.” Many studies have found that even obviously irrelevant numbers influence estimates. That’s the problem which needs correcting, explain Dan Lovallo and Olivier Sibony in the mckinsey.com article Is your budget process stuck on last year’s numbers?

Lovallo and Sibony suggest that people can also be anchored to highly relevant numbers in the budgeting process. To reanchor the discussion is a three-step process:

Identify what will determine performance. Three to seven objective criteria are usually enough for a plausible, “good enough” model.
Estimate the potential of success (sales targets for example). The key is to set next year’s targets as if you didn’t know this year’s, relying only on the criteria you defined in step 1.
Position the model as a second anchor.

Details in McKinsey Quartlery, March 2014…

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10 Tips for Optimizing Working Capital

Treasurytoday.com asked John Mardle, Managing Director and Working Capital Facilitator at CashPerform Limited, about how corporates can optimize their working capital. Mardle came up with these 10 tips for working capital optimization (WCO):

WCO programs must include the company’s entire managerial team.
Don’t delay payments to vendors. It may reduce working capital over the short term, but that improvement is likely to disappear over time.
Offer people incentives to achieve their WCO targets.
Make a constant, ongoing effort to optimize working capital.
Ensure that not all hopes are focused on ERP implementation.
Connect suppliers and customers across the enterprise to achieve maximum benefits.
Provide added value for your suppliers.
Have credit management as part of your strategy at board Level.
Develop forecasting techniques that incorporate intelligence from all relevant business segments.
Look holistically at the whole financial supply chain.

Details…

Tomato experience with WCO projects to specific points:

1. Top management needs to support the project and appoint a coach who steps in when internal resistance and questions start delaying the success.

2. and 7. Don’t risk delaying vendor payments; they support your company. Don’t put reputation at risk.

5. Changes to ERP are one thing. However, a major part of success depends on optimizing processes, and on how motivated staff is to process all individual steps in the financial flow management.

10. About holistic: If some possibly major parts can’t be implemented due to internal politics, don’t push too much for the project and risk your own reputation for the success to the project. Patience can gain time and allows a second start.

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3 Undervalued IT Leadership Skills

Expectations of IT leaders have massively expanded. In the Informationweek.com article 3 Underappreciated IT Leadership Skills, Whitney Hischier and Rajiv Bal, Lecturers at the UC Berkeley Haas School of Business, summarize what CIOs of leading companies in Silicon Valley say:

Problem finding, problem solving.IT leaders must be able to proactively define new opportunities, not just work on projects handed to them by business units.
Listen well to business needs and balance that with a clear external perspective, including a view on customer needs and industry trends.
Move others to action by nurturing and sustaining trust-based relationships with others.

Details…

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Honest Responses from IT Support

Honesty is not always the best policy. In IT, when you get inquiries or complaints from people in your company, you probably often roll your eyes but try to remain polite and patient. You should! But what if you were honest? Do the statements from An Honest Message From Your IT Guy resonate with your situation?

Please don't lie to me. It's pathetic.
No. Your company doesn't trust you. For a good reason.
It's really not your computer.
It's really not your computer.
It's really not your computer.
Yes, we think those password requirements are ridiculous, too.
And finally while we're on passwords, please choose something that's not embarrassing.

When frustrated, remember that other IT staff feels the way you do. Details to these statements…

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ETH und EPFL Rank High in Worldwide Comparison

ETH Zürich ranks 12^th and EPFL Lausanne ranks 19^th in a comparison of 800 universities worldwide. Other Swiss universities do well also, except HSG which ranks only in the 420s.

Top 12 rankings: MIT, Cambridge, Imperial College London, Harvard, Oxford, UCL (University College London, Stanford, Caltech, Yale, University of Chigao, ETH Zurich. QS World University Rankings® 2014/15

Details in deutsch: Computerworld.ch: ETH verteidigt ihren weltweiten Spitzenplatz

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From the Desk of Regula Spottl, Greensboro, NC

Last month, I pointed to the legacy Warren Bennis, the father of leadership, left behind when he passed away. On Sept. 8, Chick-fil-A founder S. Truett Cathy passed away at the age of 93. His legacy is truly inspirational.

The Wall St. Journal noted that The Chick-fil-A founder showed how entrepreneurship can be an act of generosity.

Dave Ramsey, an American financial author, radio host, and motivational speaker listed 7 life lessons he learned from Truett Cathy. They are:

Define your values and stick to them.
A little customer service goes a long way.
Make family a priority.
Know why you exist.
Plan ahead.
Invest in others.
Don’t be afraid to start small.

Details…

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