Industry: High Tech / Software

Abstract:

A leading provider of electronic design automation software and services used to design complex integrated circuits for the global semiconductor and electronics industries was interested in increasing efficiencies and improving the overall compliance and effectiveness of its Foreign Exchange Risk Management program

The Challenge:

The client being very sophisticated in its understanding of foreign exchange had developed a comprehensive set of spreadsheet based decision support tools to measure its foreign exchange exposures.  The client was well aware of the pitfalls of spreadsheets and wanted to address the following business concerns:

  • Poor Resource Utilization: The Treasury Department was spending in excess of 20 hours a month to capture all of the data required to measure its currency exposures
  • Data Gathering at the Expense of Analysis and Decision Making: The data gathering effort was detracting from a deeper analysis of the exposures and optimal decision making on how to manage the exposures
  • Compliance Monitoring:  Given the complexity of the underlying spreadsheets and challenge of reconciling spreadsheet data with the G/L data within their ERP system raised concerns over FAS 52 and overall Risk Management Policy compliance
  • Unnecessary Costs:  As a result of not being able to accurately assess exposures and make policy based optimized decisions, the client was concerned that they were incurring unnecessary costs.

How We Helped:

  • Automated Analysis: We worked with the clients Treasury team to very quickly deploy our pre-configured query to extract the necessary information out of their ERP system.  With the query in place and the data upload to our FiREapps™ Exposure Management Platform being automated, the Treasury Team was able to view a comprehensive dashboard representation of their corporate exposures at the click of a button.
  • Better, Faster Decisions:  With the FiREapps solution, the clients Treasury team was able to spend less than an hour a week monitoring the companies exposures and adjusting their risk management actions to reflect the needs of the business.
  • Improved Compliance:  As a part of the start-up process, FiREapps professional services team, was able to use the FiREapps Exposure and Compliance Diagnostics toolkit to analyze the clients ERP system setup and associated processes to isolate specific issues that needed to be addressed to ensure compliance and best practices
  • Lower Costs: Through leveraging FiREapps optimized internal banking and decision management technologies, the client was able to reduce its external hedging requirements by 50% to 60%.

Lessons Learned:

As a result of engaging with FiREapps, the client is now able to more accurately measure and manage its foreign exchange exposures.  This holistic approach assures improved earnings predictability and on-going cost savings.  In addition, by utilizing a combination of our professional services and our foreign exchange exposure management technologies, the client is able to maintain compliance and improve operational efficiency.