Microsoft's team, with help from IT service provider Wipro Technologies, developed smart client solutions with rich interfaces that leverage the power of a desktop processor and can be easily and securely accessed by users outside the company's firewall. Among its most important features, smart client provides users in remote locations with the ability to enhance existing functionality that already resides on a desktop, such as adding capabilities to an Excel file or downloading the latest versions of programs that reside on the server. "The old technology was very cost prohibitive to develop and make changes to," says Fred Riedman, Microsoft's director for finance information technology, who oversaw both projects. "With smart client, a lot of the heavy lifting in terms of the core engineering was done for us."

Those features pointed the way to a new approach. "We were trying to get a technology in the collections and FX trading side that once a transaction is created, the software makes it flow to where it belongs…the system is smart enough to route the transactions to where they belong in the world," says Riedman.

For the collections function, which handles all company-wide credit and collections worldwide, that routing was from Microsoft offices to the numerous outside vendors who oversee much of the company's collections operations. The old software did not allow easy and secure distributions to outsiders. Microsoft built a new smart client tool called MS Collect, which can be used by outside collectors and account managers within Microsoft to oversee the end-to-end collections process. The application has been deployed to more than 250 users worldwide, within and outside the company's network. The company says improvements include faster payment receipt and application through increased customer contact and expedited dispute resolution.

Similarly, Microsoft's FX trading staff had to rely in the past on spreadsheets for the most high-powered and sophisticated trades that were beyond the reach of its system without costly, and time-consuming, changes. The new smart client suite of tools offers improved FX analysis, decision-making and trade execution and can perform complex trade options and risk management analysis. As a result, the company has seen a reduction in the cycle time across the entire FX trading process.

TECHNOLOGY – Silver

General Electric Co.

General Electric Co. didn't feel it could afford to wait for data reports just because they involved data exchanges across functions and between offices around the world. So its treasury developed digital cockpits that allowed the instantaneous sharing of data and ultimately produced impressive efficiencies. Gathering and analyzing information across numerous systems used to take days. With a digital cockpit, GE managers can access critical data in a real-time, password-protected system designed to give users varying degrees of access.

The centralized, Web-based tool automates the gathering of data by pulling together data directly from the sources via straight-through processing, skipping the need to interact with more traditional, error-prone spreadsheets. "All the underlying data is available at a click of a button," says William Marcial, manager of application development for treasury and global funding operations at GE. "[Users can] drill down and see live data that can help them analyze where their problems are rather than spending hours and hours on analysis."

GE's treasury department uses its digital cockpits for all internal functions, including short-term and long-term funding, strategic funding, liquidity and risk management. One of the cockpit's most valuable features is the ability to "steer around danger" by mapping the progress of a data series and being able to pinpoint quickly statistics that fall outside a predetermined, acceptable range.

U.S. Department of Education

There are cash flows, and then there are cash flows. At the U.S. Department of Education, flows into and out of the agency's 207 cash accounts total more than $198 billion each year. The federal agency–the third largest in terms of discretionary funding–oversees collections and disbursements of student aid loans and educational and job training grants, a process that requires it to work closely with financial lenders, the Treasury Department and the Federal Reserve System. Through a series of refinements, its financial management team replaced a once fully manual process involving paper-based checking with a centralized, automated system.

Terry Bowie, director of financial management operations at the Depart-ment of Education, says that such an automated approach is so unique in the government that he is often contacted by other agencies to find out how they managed the technological turnaround on so large a scale. "It has allowed us to standardize certain business practices and hard tool those in, so employees spend more time on analysis and creating reports for management," he says.

The new database system is powered by CheckFree Corp. software and a general ledger system from Oracle Corp.

The automated system has driven a sharp reduction in cash transaction errors, which fell from more than 400,000 in 1999 to less than 600 this year, as staff members are better able to identify inconsistencies between their own records and those of outside agencies and lenders. The new system is also crucial in producing the agency's daily cash flow forecasting reports, information it provides to the Federal Reserve.

The Department of Education also uses its automated cash-tracking system to perform data mining to strengthen internal controls over employee spending through travel and procurement cards–another giant step for a large government agency.

TECHNOLOGY – Bronze

General Electric Co.

GE's treasury department set out to find a better way to streamline the process of confirming derivatives payments and free up resources. They call their solution the "online cash flow confirmation process." In spite of the dramatic growth of derivatives instruments in the last decade as a standard corporate risk management tool, no common rate reset or payment confirmation system between counterparties exists. That means the job of setting final confirmation terms more often than not involves a standard telephone call or faxed report, a general nuisance when volumes are steadily rising and contacts must be made across time zones around the world. GE's solution uses the idea of straight-through processing, in which electronic verifications can be done between computer systems, avoiding the burden of manual interventions. "We're able to use people in a better way, so they can do troubleshooting beyond the mundane confirmation of payments," says Shivram Subramanian, a black belt for operation services at GE's treasury.

Through a special Web site, the treasury team posts derivatives trading confirmation details that its counterparties can quickly verify and confirm electronically. The action triggers an e-mail to GE treasury, and when the counterparty approves the terms, the transaction is completed–although a rejection would still require manual intervention to correct problems. A confirmation approval under the old method took between two and three minutes per transaction, while under the new online system it's down to a matter of seconds with less manual intervention required, leaving room for fewer errors.