Three regional treasuries, three sets of requirements: one RFP

How WPP managed its diverse regional needs to select a new TMS and a Swift connection

Three regional treasuries, three sets of requirements: one RFP

WPP has treasury operations on three continents and each center has its own individual needs. The company needed to devise a request for proposals (RFP) for implementing a new treasury management system (TMS) and Swift-based bank communication that would serve the diverse needs of each regional offi ce. Zanders worked on this project from an early stage, helping WPP to write a cohesive RFP and providing objective advice at the selection stage.

The biggest marketing company in the world, with 2,400 offi ces and operations in 107 countries, WPP has four main treasury centers. With headquarters in London and three regional treasury centers in Brussels, New York and Hong Kong, the requirements of each hub diff ered considerably. The process of writing an RFP that would meet, combine and harmonize the needs across the London, Brussels and New York treasury offi ces was the fi rst conundrum.

An RFP to meet all TMS requirements

Zanders was involved in the RFP from the outset, having come through a consultant selection process. Paul Delaney, director of treasury at WPP’s London headquarters, says: “We felt Zanders were best qualifi ed to help us in the project and they had good feedback from other companies with similar requirements.”

It was Zanders’ task to become very familiar with the organisation, processes and system requirements of each of WPP’s three treasury centers and they did this by visiting each offi ce and spending three days assessing their needs.

Three Zanders consultants were working on the project throughout: Thomas Pels, David Kelin and Laurens Tijdhof, all of whom worked with the treasury staff at WPP to write up a RFP that would set the company on its way to selecting a new TMS. “It was a joint eff ort between WPP and ourselves to make sure that we went into great detail and got all the questions we needed for the RFP,” explains Thomas Pels, of the Zanders’ Brussels offi ce.

Paul Delaney believes that bringing Zanders on board was the right way to manage the project. “We felt it was important to bring in an independent view partly because, as a treasury department, we aren’t necessarily up-to-date with the changes in TMSs and aren’t best-placed to make an objective assessment of what best suits our needs”, he says.

“We felt it was important to bring in an independent view. ”

This is an opinion echoed in each of WPP’s treasury offi ces. David Hughes, WPP’s director of treasury operations in New York, points out that Zanders facilitated the RFP process between the three offi ces: “That is something I think we would have had a really hard time doing if we didn’t have Zanders – they were able to take an objective point of view.”

Three treasury centers – one global TMS

The most important requirement for the TMS from the London headquarters’ point of view was to have an updated reporting function, says Felicity Ronayne, UK treasury operations manager in WPP’s London offi ce. “We wanted a system we could all use that was up-to-date, with really good report-writing features and a cash position worksheet that we could access across all regions.”

The heavy reliance on checks, zero-balancing and WPP’s large number of US operating companies meant that the needs of the US offi ce varied significantly to the offi ces in Europe. David Hughes notes: “We sometimes have over USD 100 million checks clearing in the morning, so one of our needs was for controlled check disbursement funding notification to be included in the work station cash positioning. We also need to maintain a lot of inter-company schedules on the treasury work station and another big diff erence is our reliance on zero-balancing from the operating company accounts to the main WPP account – in the US it is the basis of everything we do.”

The requirements for the Belgium offi ce were slightly diff erent. Veronique Freymann, European treasury manager at WPP’s Brussels offi ce, notes: “The Belgium team manages more than 2000 accounts of the 750 entities in more than 15 countries. Furthermore we manage the cash pools (zero-balancing, notional and multi-currency), the group account structure, inter-company loans and the group’s guarantees. For this, the possibility to have cash forecast information delivered via the web was one of the major requirements.”

Zanders managed to combine all the diff erent regional requirements into one global RFP document. The RFP resulted in three potential TMS providers but WPP finally chose IT2. The system is being implemented gradually across the headquarters and two regional centers. It is near completion in New York and Brussels, while implementation in the London offi ce will begin with static data in Q4 2012.

Veronique Freymann says: “The implementation of IT2 is gradual – so we have started to upload data from bank statements, which enables us to use some tools already. We will start with the inter-company loans and it will be a step-by-step process.”

The TMS in the New York offi ce will be fully functional by the fi rst quarter of 2012, although they will be testing it and running parallel with it before then.

Choosing a Swift Service Bureau (SSB) provider

As well as playing an active part in the TMS selection, WPP’s Brussels offi ce also led the process in selecting a SSB provider. David Kelin, director at Zanders’ London offi ce, points out that the TMS selection and the choice of SSB provider were complementary projects. “When we were looking at the TMS, we also assessed WPP’s banking relationships and communications – we established early on that a SSB would be necessary and that Alliance Lite would not be suffi cient for WPP’s needs.”

WPP eventually chose Swiss provider BBP to provide their Swift bank communication. The selection of the SSB was completed in August but it has not gone live yet. WPP’s Brussels offi ce is currently transmitting data across to the new SSB system and it will become effective before the end of 2011.

As with the TMS selection process, Zanders was instrumental in helping WPP to understand their needs for Swift and then choose the right product. “We are the end users, so we know what we want, but we don’t know what advantages one solution off ers compared to others”, says Thierry Lenders, European treasury manager at WPP’s Brussels offi ce.

It is expected that the SSB will bring significant benefi ts for the Brussels offi ce. Veronique Freymann notes: “SwiftNet gives a single channel of communication between us and the banks, so it will be a lot easier for us.” For now, WPP is reserving judgment on whether the SSB will be needed in its other treasury centers. Paul Delaney says: “It was evident that we needed the SSB in Brussels, but it is not yet clear if we will get the same benefi ts from it in New York and London. We are watching what happens in Brussels closely and we’ll make a proper assessment once it’s fully installed there.”

Bringing the project to a happy conclusion

This has been a long and complex project. What begun as a challenging RFP in 2010 then became the selection and implementation of a TMS and a SSB. The project is ongoing and several months remain before both IT2 and the SSB are fully functional.

WPP’s David Hughes sums up his experience of working with Zanders: “We were very impressed with the quality of the people at Zanders and the depth of their knowledge. Most of all we really appreciate the fact that the same three Zanders consultants have seen the project through from beginning to end.”