The 2008 merger of Thomson and Reuters created a $13 billion global company with 1,700 accounts at 135 banks in 99 countries and a single SAP ERP system that spanned the enterprise. Three years later, the company has closed 523 accounts and cut the number of its banks to 57. It would have cut more if not for local regulations.
More significantly, at least 90% of all transactions now flow through just five core banks. Thomson Reuters is saving $1.5 million a year in banking fees alone, a 28% reduction. Tighter, more automated cash management, including 139 additional sweep arrangements, has reduced its working capital and cut interest expense. Behind the numbers is a payments system that has moved 91% of total payments to the ISO 20022 XML standard, which is implemented and applied identically by the company's three core disbursement banks.
The key to success was rigorous project management. Thomson Reuters engaged consultants—Treasury Strategies—to help select banks: Citigroup for Latin America and EMEA, Standard Chartered for Asia, JPMorgan Chase for U.S. disbursements, Bank of America and Harris Bank for U.S. collections.
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Identical implementation of ISO 20022 formatting for disbursements was critical. "We got the banks to agree to field-by-field usage and standards, and we anticipated challenges and agreed on remediation, which sometimes required changes to a bank's infrastructure," explains Arun Abraham, head of deployment.
The payments side of the project is largely complete. Collections deployment, delayed to dovetail with a new billing system deployment, is just beginning but will involve standardization, data enrichment, the same core bank partners and the same rigorous project management, reports Stuart Corbin, international treasurer.
"We achieved dramatic increases in efficiency and effectiveness," says David Shaw, treasurer and senior vice president, "by reducing manual activity and enabling straight-through processing and straight-through reconciliation."
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