Global Vision, Plc: An Overview

The Amsterdam-based company’s worldwide clients are large and mid-sized firms engaged in finance and banking, accounting, supply chain management and eCommerce. Its non-European suppliers are in Silicon Valley in California and in China and India.

In 2006, Global Vision had profits of €3.2 billion on sales of €11 billion. By 2016 – when our story takes place – those figures have nearly doubled: sales were €19 billion; profits improved to €5.8 billion. This was thanks, in part, to the efforts of the company’s treasurer, Evan White, who joined Global Vision in early 2006.

Note: Global Vision is not a real company. The characterizations and details contained herein are meant solely to portray SEPA, its benefits, and how a company might make best use of them.

US Seeks to Join SEPA – Brussels 20 December 2016 – In the latest indication of the continuing success of SEPA, in a news conference at the European Union headquarters here today George MacAdams, the United States attaché to the EU, raised the possibility of his country joining the payment area.. ‘SEPA’s advantages – more efficient processes, cost savings, improved controls and better visibility – are benefits that any country and any corporation would enjoy, and I think that more should enjoy.’ MacAdams went on to say that, while no clear mechanism currently exists for such an arrangement, it would be well worthwhile exploring possible formats for non-European countries to join SEPA- similar to how the UK was able to align sterling with Euro payment capability. ‘Who knows,’ he quipped, ‘perhaps we could call it SUPA – the Single Universal Payments Area.’ European leaders had no comment.

Corporate treasurer Evan White did have comment on that morning’s news. As he looked down on the Thames snaking away east from his London office, White read the news report with little in the way of surprise. Now near its end, 2016 had been an interesting year, and he saw a neat symmetry in its ending as promisingly as it had begun: the former accountant in him liked a balanced book.

He let himself daydream for a moment…when – if – the US came on board, his dealings with the big brains in Silicon Valley would be smoother still…and then, perhaps someday, the hardware suppliers in China and IT engineers in Bangalore – .

But back to reality. The fact was that the United States knew a good thing when it saw one, as did White and most others like him in Europe’s corporate financial community. He had joined Global Vision in 2006, and in the ten years since he’d seen both the enterprise software company and Europe maintain the pace of change, a pace of accelerating progress moving from the founding of the European Economic Community in 1957… to the establishment of the European Union in 1992. For most of the financial world, the topping out of the structure came with the wholesale introduction of the euro in 1999.

All that’s ancient history. Nearly everything had changed between 2006 and 2016. True, in some ways life was the same. There were no men on Mars, or even on the Moon. No solar-powered hybrid cars, or teleportation to and from the office – though the congestion charge had tripled.

The real changes were more basic. As the community of Europe, in its varied guises and subdivisions, grew ever larger and more inviting, the further adoption of the euro had increased. And today, the original Maastricht vision of “free movement of goods” – which formed the original basis for the EEC – was tantalizingly close, fostering the growing worldwide acceptance that, as a trading territory, the EU has no rival. Rather than a pie-in-the-sky objective, STP was now standard. While at enterprise knowledge companies like his…at the software and hardware companies that supported him…at factories and banks around the world…further consolidation across numerous markets had taken place.

Late on the last workday of 2017, Evan White saw reason to celebrate. He poured himself a glass of Kent Cava Crystal, the latest beneficiary of the long sunny summers that lingered through autumn in England’s southern vineyards. As the bubbles rose, he reviewed the past five years…considered the process and progress of change for Global Vision…for Europe…and for a global corporate world. It was a history that, for him, began in late 2006.

New Year’s Resolutions: 2016

The offices of Banque Inter-Euro Luxembourg, the company’s lead European bank, perched on the edge of Luxembourg’s Petrusse River, facing across the deep valley and toward the walls of the city once called ‘The Gibraltar of the North’. Gathered around the conference-room table for a briefing on Global Vision’s five-year plan were the company’s top management and their key bankers. The lights dimmed, the windows darkened, and recently appointed treasurer laid out his plans for the next ten years….

Evan White’s focus that day was Eurocentric, with special focus on SEPA. His brief simple: take utmost advantage of SEPA’s current benefits – while maintaining an ahead-of-the-curve focus on anticipated changes and improvements. His points were equally straightforward. Streamline ruthlessly. Consolidate accounts and make best use of resulting cash to reduce short-term debt. Improve automation within processes. Increase sales by taking advantage of newly available and expanding markets….

In ten minutes he was finished, and as the lights came on, White was congratulated on a job well done. That was nice, but he felt that was due more for the fact that his presentation was straight and to the point. And, above all, short. The fact was that the job wasn’t done. He hadn’t even started.

And, plus ça change, plus c'est la même chose, there were some still uncomfortable realities amid the SEPA dream. He thought in particular of his holiday home in France, about how much trouble he had paying insurance and electric and water bills from Amsterdam. While he had talked glowingly of SEPA’s potential, he knew that, in reality, the Single Euro Payments Area had some work ahead of it. As did he.

2016: From Resolution to Results

But the years between 2007 and 2016 yielded success: thanks in part to a booming industry in a healthy worldwide economy, he’d done it – used Europe’s potential and his own nous to the best advantage. And his ten-year review, to be delivered in early 2016, would surprise his harshest critic: himself.

In consolidating accounts, by the end of 2016 White now has to deal with but one euro account per legal entity across 19 countries – a dramatic streamlining of accounts that had originally been set up to cater to various forms of financial activity: revenues, collections, cheque drawing, loans, and the like. In addition, the attendant multiple bank relationships had meant that accounts with the same mandate were in use across a number of local and international banks. No longer.

The net impact of his streamlining has been a reduction to approximately two accounts per country – compared to an average of 20 per country ten years earlier. And he’s calculated that, after the elimination of account of maintenance fees on so many accounts, reconciliation costs and negotiation of more favourable terms, the company has netted an immediate saving in the millions, leading to more efficient management of working capital.

Continued negotiations with Banque Inter-Euro Luxembourg, the company’s lead European bank, have led to more favourable debit and credit interest terms, while the concentration of working capital across fewer accounts and far fewer deficits has meant a 75% reduction in short-term borrowing compared to 2007. The resulting surplus cash was usually deployed against internal company requirements. But now, the net surpluses that do occur are far more significant, allowing money market investments on short term surpluses to be used to great effect, with higher balances commanding commensurately higher rates.

By 2009, SEPA had met one of its goals: direct debit collections all carried new 25-character invoice numbers, leading to improved automation within processes, virtual total automation and near-zero rejection rates. A direct result, relations with suppliers are at their highest level ever. And with SEPA’s credit transfer able to carry original detail from all incoming invoices, Global Vision’s suppliers, vendors and other business partners are able to automate as well. For its part, central treasury is now working on 2020 strategies, including the latest link in the procure-to-pay process – internet-based touch-screen procurement.

New Markets, Streamlined Processes

In entering 11 new markets, Global Vision saw both its sales and profits rise, and though some of the new markets – education, for example – are currently small, the associated costs of being active in them is now equally small. Overall, now that new accounts don’t have to be opened in those same markets, this new activity is far less complicated.

Sales to mid-sized corporate and retail customers have risen since 2007, thanks, in the main, to a 35% rise in internet-based sales, made simpler and faster because all European cards are now accepted following a unique process – without the need for the pre-SEPA multiple links required for card collections.

With IBAN now common parlance, there’s no longer the need to spell ‘Einzugermächtigungs’ – nor to walk the company’s auditors through the LCR and Riba processes. And with systems now operating on a standard XML format, there will be one less Christmas card, as there will be no further need for numerous ERP consultants.

And, sadly, no more holiday party invite from the law firm: In early 2006, White and Global Vision had set the wheels in motion to explore cash concentration structures across Europe, but the effort stalled as a result of the conflicting legal and tax opinions. Now, with the liquidity structure benefits in place, for the first time the company did not have to go through an implementation process: Liquidity structures by default! But still…he’ll miss that party.

Back to the Future: Resolutions for 2016

Evan White finished the glass of Kent Cava Crystal. ‘Not bad,’ he thought, ‘but I prefer Veuve Cliquot. Plus ça change….’

‘Not bad,’ he thought, though this time he was thinking about Global Vision. He and his company had done well over the past ten years – but could they have done better? Could he have done anything differently? Hindsight being always 20-20, of course he could have.

Looking back, first off he would have engaged earlier with his bank: he didn’t understand the potential benefits early enough, and so didn’t realise them as quickly as he could have. And where some contemporaries were consulted over the mix of ‘Additional Optional Services’ that would add value to their treasuries, White, being more of a spectator to the process, didn’t have the opportunity to share his own requirements.

Global Vision’s focus over the last ten years has been supply-chain end-to-end automation, another process that he now felt should have been discussed with their bank much earlier. In part, this was due to the fact that he wasn’t clear in his own mind about Global Visions own vision in terms of infrastructure – and the project got under way before clear objectives and milestones had been set. He was now certain that an earlier consultation process with the bank – which had apparently been working on various models – could have helped.

Then there was the direct debit solution across Europe, which Global Vision had long and avidly pushed. Viewed from the present, the ‘big bang’ implementation method was probably the wrong option – they should have implemented it in phases, first where there were no viable local solutions, taken stock, ironed out the implementation process…and then perfected it across those markets where local direct debits were more prevalent.

Should he have engaged sooner with his treasury system and technology providers, so that they could better play their part in enabling the company to realise SEPA’s process efficiency and visibility benefits as early as possible? Sure. Could he, back in 2006/7, have seen the future? Of course not. But he had seen its possibilities, made some right decisions – and good guesses – and in the end his Global Vision had come out on top.

‘To 2016!’ he called out, as he put on his coat. ‘Computer: Off. Lights: Out. Security: On. Car: Start.’

Evan White shut the door and headed out toward the future.