2024 Alexander Hamilton Awards: Liquidity Management

Effective cash forecasting is foundational to treasury’s core responsibility of cash management. Yet many companies—even large, successful global businesses—still develop cash forecasts via Excel spreadsheets and manual processes. As a result, they lack accuracy and visibility into the organization’s future cash flows, which means treasury misses opportunities to reduce borrowing costs and increase investment earnings on excess funds.

All three of this year’s Alexander Hamilton Award winners in the category Liquidity Management started in that position. But each of these innovators transformed out-of-date, manual forecasting practices into highly automated processes that generate accurate and granular estimates of future cash flows.

They achieved dramatic improvements through bold action. It’s an approach Abhishek Jhunjhunwala, director of capital markets for Bristol Myers Squibb, believes every treasury team could benefit from. “We need to say, ‘What’s the worst possible outcome of this scenario?’” he says. “Even if there’s a ‘no’ at the end of the process, we should ask whether we can do things differently, whether we can break out of the mold. We talk through a lot of different scenarios leading up to a transaction, and that process empowers us to break the mold and bring ideas to our CFO and leadership team.”

• Gold Award:  Despite having $11.5 billion in cash and cash equivalents, Bristol Myers Squibb until recently had a cumbersome, largely manual cash forecasting process. The company developed an entirely new approach to forecasting and deployed specialized software that introduced extensive automation. Now, cash forecasts are more accurate companywide, leading to better funding, investment, and hedging decisions.
• Silver Award:  London-based Pearson also experienced challenges around its cash forecasting processes, particularly following the Covid-19 pandemic. The company revamped cash forecasting to improve accuracy and granularity, as well as efficiency, at a global scale. The drastic process improvements enabled treasury to reduce the company’s borrowing costs by more than US$100 million.
• Bronze Award:  Palo Alto Networks was missing out on investment earnings across a significant portion of its cash balances. As part of its Investable Cash Optimization Program, the treasury group revised the corporate investment policy to allow new cash allocations and automated formerly manual processes. Through this change and technology improvements, Palo Alto was able to increase the proportion of cash balances that it invests, from 82 percent to 97 percent, and to diversify cash holdings into higher-yielding bonds.

Congratulations to all three of these winning organizations! And thank you to the judges of our 2024 awards program: Jean-Francois Heitz, former deputy CFO and treasurer of Microsoft; Erik Smolders, former treasurer of Ingram Micro and a vice president in Deloitte’s Global Treasury Advisory Services practice; Craig Jeffery, managing partner of Strategic Treasurer; Paul Galloway, senior adviser at Strategic Treasurer; and Marie Hollein, former president and CEO of Financial Executives International.

Finally, thank you very much to TIS and ION Treasury for sponsoring the 2024 awards program.

You can learn more about the Liquidity Management award-winning projects by watching the on-demand version of the webcast during which we presented the awards. Treasury & Risk will continue to present the 2024 Alexander Hamilton Awards in a series of articles and webcasts throughout the year.

• Register today for our live webcast recognizing the Alexander Hamilton Technology Excellence Award winners, which will take place on Wednesday, April 24, at 2 p.m. ET.
• Stay tuned for presentation of the rest of this year’s awards!