As digitalisation across businesses advances, vast amounts of data generated in these systems offer an opportunity for treasurers. Harnessing the data can deliver smarter insights and faster decision making, but becoming data-driven doesn’t happen overnight, it is a quest that takes many years.

Speaking at the 2022 EuroFinance Treasury Management International in September, Mario Del Natale, treasury director at the building intelligence, software and technology services provider, Johnson Controls shared his 15-year long journey in building a real time data driven treasury.

Standardising processes

In the last few decades, the 137 year-old company went through a drastic change in its business model, from a conglomerate of diverse businesses like automotive seating and power solutions to a pure-play technology company which develops products and services that enhance intelligence of building to the tune of nearly $24 billion in annual revenue.

Amidst this transformation, in 2008, the treasury department decided to become autonomous of its banking partners from a payments process, statement retrieval and format point of view, which was carried out by implementing an inhouse Universal e-Banking platform used for processing payments in the organisation.

With a centralised and in-house system in place, the company received standardised information on payments, intraday cash movement and other transactions from its banks, and with silos of static data, it was a perfect opportunity for the treasury team to make use of it to effectively manage global liquidity and risk across the enterprise.

Mario Del Natale, treasury director at Johnson Controls

“It was clear for me that we had to do something with this data in a structured manner…We can’t rely on a daily dose of ERP that we had at that time and needed to implement a system which analysed data from thousands of bank accounts of the company across the world.” Mario Del Natale told delegates at the conference.

Despite understanding the need to leverage the data across all of Johnson Controls’ bank accounts, the treasury team had an opaque view of what its reporting tool may look like, who the target audience will be and how it will be implemented. However, a year later in 2009, the team launched its first dashboard on liquidity positioning in one country of operation.

Whilst this was just the starting point for expanding analytics within treasury operations, the treasury team didn’t feel that it would be a viable solution in the long term due to the heavy reliance on IT resources in developing this product.

“I had to fully rely on IT to develop this tool- I didn’t have the business object infrastructure and was not the owner of this product and so had to spend months trying to explain what the end goal of this dashboard will be,” Del Natale further said.

Mobilising tools

After using it for almost seven years, the tool had become redundant and the treasury team decided to further upgrade it. However, digitalisation is not just about giving legacy processes a digital facelift and hence, the team started from scratch by using cloud based softwares like Power BI.

The treasury team’s aim was to develop a cost effective tool which could provide real-time cash positioning of the entire organisation in one window and be refreshed every 30 minutes with the new data from ERP, bank statements as well as the payment that were made during the day. To execute this it was critical for the treasurers to have a comprehensive understanding of the data; where it is stored, how and when to get access to it.

“Our liquidity position is not only a matter of aggregating balances, the intraday statements but also the payment that had been sent to the bank, but not yet on the bank statements.” Del Natale further explained.

At the same time, the treasury team wanted to be independent IT and software providers and further developed the R&D capabilities on treasury applications so that the team didn’t have to rely upon outside resources. User experience was key for the treasury team and focus was on the visualisation of data on Power BI, by maximising the standard functionalities of the software.

The tool uses algorithms that automatically tag statement movements and payment instructions which help to bifurcate operational and non-operational flows (cash pool sweeps, direct debit, cheques, FX settlements) in real time. This feature facilitates cash managers to better fund the entire company. More importantly, the execution for this tool was done at a fraction of the cost when compared to the one the company was using before.

Since 2019, Johnson Controls’ treasury team has been using their new analytical tool and can now receive full visibility of the liquidity position globally through a single window, which monitors cash positions, manages bank exposures, provides forecasts based on historical data, funding transfer analytics and many other solutions.