In July 2015 digital payments service PayPal split from e-commerce company eBay. The latter bought PayPal for US$1.5bn in 2002; more than a decade later PayPal is now worth around US$45bn, while eBay’s worth is estimated at US$30bn. A long-term separation agreement has been put in place, and eBay has incentives to route about 80% of its sales through PayPal for the next five years.[1]
Tony Glasby, vice president and treasurer at PayPal, says that before the demerger eBay was implementing the Quantum treasury management system (TMS) from SunGard across all business units. The implementation will now continue at both companies. PayPal is starting the next phase of implementation, which includes foreign-exchange-rate risk management, which is due online later this year.
The TMS implementation has already produced results, he says, with the global environment, standardisation and consistent framework producing greater efficiency and accuracy throughout the treasury department.
According to Mr Glasby, his company was advised to pay close attention to the scope of the project upfront; this, he says, has been a key success factor. “This proved to be important in such a large project, because down the line there is temptation to add extra scope.”
An important factor in dealing with TMS and other third-party vendors, he explains, is to recognise that such companies typically have many projects under way at the same time. It is therefore very important to establish good communications at senior levels of the provider to ensure that any problems can be addressed quickly.
[1] "Better off alone", The Economist, July 18th 2015.
