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3

4

5

2

How Technology Supports Treasury’s New Role

1

Treasury at Campbell Soup Company

!

Treasury at

!

• Global Food and Beverage Manufacturer • Nearly $8 billion in sales

• Approximately 19,000 employees • 140-year history

!

Campbell Soup Company:

Three Basic Categories

!

!

Diversity & Inclusion:

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Campbell’s Treasury

Interest Rate Swaps FX Trading Long-Term Debt Management Cash Management CP Issuance Fixed-Fixed Cross-Currency Swaps

Campbell’s Treasury Profile

!

Treasury Process Review

• Treasury, with the assistance of Treasury Strategies, conducted an extensive review of our current operational processes and systems • Primary review findings and conclusions

– Senior management’s ability to monitor risk and liquidity on a global basis severely constrained by our technology architecture

– Lack of an integrated treasury system put us as an outlier among Fortune 500 companies (per Treasury Strategy’s annual survey, 80% of companies with revenues above $5B have full suite treasury systems)

– Significant amount of manual data manipulation in an Excel environment due to multiple system environment

• Increased risk of error

• Inefficient

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Treasury System Challenges

• Two legacy TMS platforms used for limited functions

• No automated interfaces with banks

• Limited audit trails

• All analytics and accounting entries related to derivative, debt and FX management generated in complex Excel spreadsheets and manually transferred to SAP

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Greater Control and Operational Efficiency

! Straight through processing of all transactions will eliminate manual rework and reduce errors

! Automated data pulls from Bloomberg removes need to re-key in forward interest and FX rates

! Provide critical valuation of derivatives allowing compliance with longhaul hedge accounting

! Obtain greater visibility to global cash positions of all legal entities

! Ability to track MTM exposure with counterparty and access counterparty risk

! Potential for in-house management of cash in Australia and Europe, eliminating outsourced Treasury in Europe.

! Improved intercompany netting process by providing direct feed between SAP and Treasury system.

! Automated audit trails

!

How Technology

Supports Treasury’s

!

!

Sub-Optimal Technology

Environment = Data

Intercompany Netting

Rely on bank to perform netting and FX

Bank Account Administration

Partial maintenance in disparate spreadsheets

Cash Pooling

Rely on bank to track balances and allocate interest

Treasury Spreadsheets

Functions used and data keyed: - Bank polling

- Cash Positioning

- Short term investments and debt

Various bank software or logging on to multiple bank web-sites for bank

reporting Accounting and Reconciliation Passing of Excel files and manually reconciling files Payments

! Treasury Management System Functions available: - Bank Communication - Cash Positioning - Cash Forecasting - Bank Account Administration - Payments

- Short term investments - FX & Risk Management - Intercompany Loans - Multilateral Netting

- Accounting & Reconciliation

!

!

The most common reasons why organizations achieve only a partial functional or geographic implementation of their treasury technology:

• Lack of internal treasury resources

• Competing projects and lack of focus

• Lack of senior management involvement

• Challenging implementation

• Different functional requirements in regions

• Lack of communication with TMS vendor

• Changing business drivers

• Changing environment

!

Evaluate Current

Processes Assemble ProjectTeam _RequirementsDefine

Conduct Gap Analysis Identify Vendor

Systems Develop Request for

Proposal (RFP)

Conduct Scripted Vendor Demos

Evaluate Vendors & Conduct Proof of

Concept Tests

Develop/Finalize Business Case

!

Evaluate existing workflows and processes:

• Cash management and forecasting

• Bank relationship management

• Payments

• Approvals and control points

• Transaction execution, documentation and reporting

Assess your existing system(s) (if applicable) – both current usage and potential capabilities

Investigate your workflows thoroughly – are you re-keying data? What’s your ideal treasury look like?

! Internal Audit IT Treasury Accounting Senior Management Operations

Consultants External Vendors

Auditors Legal Tax Treasury Technology Selection and Implementation Project

!

Determine functional priorities

• What’s most important in your organization?

– Cash positioning

– Cash forecasting

– Financial transactions

– Payments

– Bank relationship management

– Reporting

Weight functions according to importance

Assess implications and impact of existing systems and infrastructure

!

Company

Background TreasuryActivities

Critical Functional Requirements Business Requirement Response Critical Requirements Technical Specifications Pricing

Company Information: You Supply

Vendor Information: Vendor Supplies

Current Systems and

Banks

!

Bank online systems

Bank-offered treasury systems

Fully integrated best-in-class Treasury Management Systems ERP treasury modules

Specialized systems

• FX

• Bank-to-Book Reconciliation

• Risk Management

• Multilateral Netting

• Bank Account Administration

Online trading portals

!

Review current system usage

Assess additional functionality now available

Evaluate gaps between requirements and system capabilities Decision point

• Remain with existing vendor?

• Evaluate larger vendor pool?

• Include existing vendor in selection process?

!

Conduct Scripted Vendor Demo

Schedule on-site visits for vendors Allow sufficient time for demos

Create customized script including your specific data

• One script should be used for all vendors for equal comparison

!

Evaluate Vendors

Take a holistic approach:

!

Evaluate Vendors (cont’d)

Quantitative Scoring:

• Score vendor offerings based on RFP and demos

• Consider a standard scale such as:

1 = Major functionality gaps

3 = Capabilities are acceptable. Minor gaps 5 = Meets or exceeds requirements

!

Evaluate Vendors (cont’d)

!

Evaluate Vendors (cont’d)

Qualitative Factors:

Factors to consider may include

• Ease of system integration into your environment • Vendor’s experience with similar firms

• Vendor’s understanding of and ability to apply business requirements and sample data

!

Evaluate Vendors (cont’d)

Cost Considerations:

• Ensure number of core and light (read-only) users are not under or over-estimated

!

Finalize Budget / Business Case

Quantitative factors

• Decreased financial transaction fees

• Reduction of idle balances

• Lower cost of debt or increased yield on investments

• Staff efficiency in terms of fractional time spent in manual tasks

Qualitative factors

• Decreased risk

• Implementation of best practices • Enhanced treasury visibility in

organization

• Expiring existing system license • Greater controls around treasury

processes and transactions

!

One - Two Weeks

Four Weeks

Eight to Ten Weeks

TBD

Phase 1 - Treasury Review

Phase 1 - Intensive Onsite for Determination of Business Requirements

Phase 2 - Technology Selection

Phase 3 -

Implementation

!

!

Lessons Learned

• Evaluate availability of dedicated resources - internal vs external or combination of both

• Assess nice to haves vs must-have requirements and the associated cost!

• Determine capacity for in-house hosting vs. external vendor hosting of system!

!

!

1. Review current treasury processes and identify areas of weaknesses.

a. How do you facilitate treasury providing intelligence to the organization?

b. Where are best practices not being employed?

2. Explore where technology can improve upon inefficient treasury practices.

3. Determine how technology needs can be supported within the organization.

4. Evaluate vendors for best possible solutions.

5. Select and implement selected technology.

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Conclusion

– The role of treasury technology is now more strategic than ever

– Combining the correct vision with the correct technology is critical:

• Planning

• Selection

• Implementation

!

Bob Knecht

Director of Treasury Operations Campbell Soup Company