Tech Data Corporation
FiREapps PRODUCT: FiREapps Enterprise™
ERP ENVIRONMENT: SAP
As a $25 billion-plus distributor of technology products, with operations serving customers in more than 100 countries around the world, Tech Data requires a robust, process-defined FX management program in order to effectively and efficiently manage currency risk. Before the company embarked on its global FX transformation initiative, its FX processes were decentralized, non-standardized, and included a significant number of manual processes.
Tech Data’s FX Management Program Before Transformation
Decentralized, non-standardized processes
Before the transformation, Tech Data’s FX management processes were decentralized and non-standardized, controlled locally in each of the country locations.
Manual data gathering, analysis and non-value added activities consumed a significant amount of corporate Treasury’s time and more than 200 hours weekly from country-level managers and staff.
No organic exposure elimination
Tech Data’s biggest challenges came from its European operations, where it had 21 entities trading 12 currencies, resulting in more than 16,000 FX trades with a notional value of €11 billion and associated costs of €3 million annually. Without an automated central exposure analysis solution, Treasury was unable to net offsetting consolidated exposures. Hedging costs are reflected in Tech Data’s gross margin and were significant to corporate financial results.
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