FiREapps PRODUCT: Currency Analytics Pro™
ERP ENVIRONMENT: SAP
SUMMARY: In the past five years, Hubbell has grown largely through acquisitions, which has increased the company’s international sales from single digits to approximately 20 percent. This global growth has been accompanied by various new risks, including exposure to foreign exchange (FX), across manufacturing divisions and subsidiaries in the U.S., Canada, Puerto Rico, Italy, Brazil, Switzerland, China, Mexico, Australia, and the United Kingdom.
As currency volatility increased and remained elevated quarter after quarter, Hubbell was experiencing an average of $2 million in FX volatility in the P&L statement. Because the company was historically a North American-based enterprise, Finance did not have a rigorous Currency analytics process in place, which made it impossible to efficiently identify, analyze, and mitigate the FX exposures impacting financial results. They knew they needed to take action, but were impeded by limited resources and a complex ERP landscape made up of SAP and multiple other general ledgers and ERP systems introduced via acquisition.
“We needed to address FX volatility because we were growing internationally and we were going to continue to acquire companies,” says Howard Wardlow, Director of Finance and Treasury at Hubbell. “If we could mitigate even 50 percent of our FX exposures, it would have a significant positive impact on P&L. The problem was that we didn’t know exactly what those exposures were.”
“The Treasury department was very small, and did not have the time to aggregate data from all of the various general ledgers and ERP systems in order to identify exposures. “On top of all of the cash management and everything else that goes along with working in Treasury, we needed to get an FX program up and functioning quickly,” Howard explains. “No one on our team had done that before, so we opted to look outside for a solution.”
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