By using options (forwards were already used), Microsoft gave itself the choice not to exercise, taking advantage of the upside in the market. Brazil is the first emerging market where Microsoft has integrated options and forward contracts. So far, the effect is stabilizing. For example, customer orders remained steady during recent volatile currency periods. Also, the hedge portfolio, which is monitored daily, earned more than $4 million at the height of Brazilian market uncertainty. "We hedge risk to the extent we can make a difference for the businesses in the field," Matz says.

Cross-team collaboration among the three groups was crucial, Matz adds. "Each stakeholder was completely informed and knew what to expect," he says. There were presentations and roundtable discussions with the Brazilian finance team.

Now, the system is Microsoft's flagship currency protection program. In the future, Microsoft plans to roll out the same program in Mexico, South Africa, Thailand and India. "It was a good learning experience for everyone," says Matz. "And now, it's easier to promote the [program's] value in other places where it can be done effectively."

FINANCIAL RISK MANAGEMENT – Silver

General Electric

Not having financial-risk instruments like bank guarantees and comfort letters can be deal-breakers at GE, especially in the current industry-wide credit crunch. But the manual process for each request was time-consuming, requiring signatures by the treasurer or another GE officer and data gathered from many sources. Then, the detailed requests were filed in many locations around the globe. The average turnaround time was two weeks.

GE needed another, speedier solution. The remedy was a Web tool called Global Credit Facility Online. Using this system, everything is on a server in Hong Kong that centralizes data from over 100 locations. "It's very easy to use the system," adds Nancy McEwen, an assistant treasurer at GE. "And, it's provided us with a robust database."

These days turnaround time is one day. Though the business CFO is automatically notified of new borrowing arrangements, approval isn't required. "And, the system actually generates the letter, so there's no deviation from our standard form," McEwen says. Also, the system creates reports by business, company, region and currency.

Since GE runs a decentralized shop, says McEwen, getting accustomed to the new centralized technology was a challenge. But the pay-off is greater controllership, she says.

FINANCIAL RISK MANAGEMENT – Bronze

Whirlpool

Whirlpool has two Brazilian subsidiaries for which it logs export sales and receivables in U.S. dollars. Since the Brazilian real has depreciated over the long run, Whirlpool saw little reason to hedge currency risk. "There were a lot of people who believed very strongly that because it was a dollar position, we didn't have any risk," says Margaret McLeod, assistant treasurer at Whirlpool. "That was the internal challenge."

Then, the real changed course late last year, appreciating significantly amid uncertainty about the national presidential election. That's when Whirlpool began hedging for the first time, mostly with options. Since the options market there isn't tremendously liquid, says McLeod, it was important to chop up option contracts into $5-million and $10-million pieces. "We're very careful how we execute it," she says. If you lock into forwards, you know what you have, she explains, but you've relinquished the upside. Instead, Whirlpool sets a floor and tries to hang onto some of the upside.

The biggest victory for treasury: the company-wide acknowledgement that the Brazilian currency is a large and important position. "And, it doesn't always go our way," she says. Also, the hedges have added ka-ching to the coffers-some $3.2 million in cash and pretax earnings over a six-month period.