The time is right for further action to achieve the goal of a connected, strategic treasury that goes beyond the remits and boundaries of a "silo" organisational unit.

We operate in an increasingly complex and volatile environment that requires the organisational ability to manage the risks and leverage opportunities through swift adaptation capabilities, integrated, “well-oiled” cross-functional networks and the right system support.

Erasing boundaries

Embedding the corporate-treasury function effectively into the organisation is one key driver for success, installing clear structural links that enable treasury to interact optimally with other business units. The boundaries of the treasury organisation have to be regularly tested and challenged.

At Borealis, Treasury & Funding consists of:

• Treasury, with middle and back office, cash management, payment factory and in-house bank;
• Funding;
• Investor relations;
• Group financial risk management;
• Credit & collections; and
• Accounts payable.

Some interfaces are best managed by simply erasing the boundaries of corporate silos. Necessary interfaces have to be defined as concise as possible; having transparent policies and procedures helps. In transactional areas the embedding of service-level agreements can be instrumental to manage expectations. At Borealis, we run the treasury operations fully centralised but over multiple locations with the support of STP systems, allowing a high degree of flexibility and scalability.

Process integration

Continuously reviewing and benchmarking the end-to-end processing is essential to derive the best learnings for the organisation as well as to ensure a competitive cost edge. One recent example is our Payables Excellence Program. Soon we realised that an optimisation within the own organisational remits reaches its limits quickly and cannot be resolved alone. The best results are obtained in a concerted effort. Being part of steering committees, cross-functional projects and inder-departmental initiatives means treasury is kept in the loop and supports the business early with its expertise.

The developments on the systems and data side offer a wide range of optimisation opportunities. Linking treasury data with information from other areas can deliver great value. Recent examples on focus areas in our company include an integrated working capital analysis, a cost of capital calculation tool which delivers tailor-made results for various areas and systems, and enhanced customer-credit analysis.

The "soft side"

Effectively connecting the treasury organisation with a wide range of other functions is an equally important contributor to success. A truly adaptive and strategically agile treasury should actively seek to connect and nurture the informal communication channels with the wider organisation. At Borealis, we encourage this with a group-wide excellence initiative revolving around the themes of “connect – learn – implement”.

Treasury should continue to become a more strategic business partner. Our function clearly has much more to add than just the traditional areas of responsibility, such as liquidity management, hedging and financing.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.

This blog is part of Managing risk in challenging economic times, a new research programme by The Economist Intelligence Unit and sponsored by Deutsche Bank. A white paper and an infographic, based on a survey of 150 corporate treasurers and 150 CFOs, as well as a video interview with Jan-Martin Nufer were launched at the EuroFinance conference on International Treasury & Cash Management in Vienna, Austria, and on EIU Perspectives on October 12th 2016.