How to Streamline Treasury Management with Jonathan Burkhead

Foreign so welcome to this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week talk to treasurers about how they built their careers, where they are now and where they see both themselves and the treasury profession. Going to next this week's show. Delighted to be joined by Jonathan Burkhead, Senior Director Global treasury at OpenText Now OpenText Corporation, a Canadian group company who develop and sell enterprise information management software. Now headquartered in Waterloo in Canada, they're Canada's largest software company as of number of years and one of Canada's top 100 employers as I've seen on here. Now I'm going to get Jonathan to explain that a bit more to you guys. But Jonathan, you've got an interesting and diverse career taking us all the way back if you would. You originally started, you know from university and qualification if you like at ITT Hartford and Senior Financial Services. So talk to us how you came financial services and then all the way through into Treasury. How did that come about? Take us back.

Sure Mike, it's good to be with you. I did start in the insurance industry and I think there's probably no better place for a Treasury person than an insurance was a multi line carrier the Hartford and lots of different business lines and lots of different cash flows. So you know in that time banks were very focused on that industry and developed products specifically for insurance in terms of treasury and it was a great learning ground because there was lots to do, lots of projects and a great place to learn Treasury. So from there I went to SunTrust bank and did some consulting work for SunTrust where you know, as a sales tool we would go out and do treasury reviews for prospects or important clients of the bank and we would do a Treasury study for them and leave behind some recommendations for improvements. And it was kind of a benefit for the bank because it put us a leg up on the competition where we had an opportunity to learn more about the business and then add value to the relationship through the consulting work that we would do for the client.

So you've been then you made that move from then so back in 2000 into sort of it's called mainstream corporate treasury. But I've noticed a lot of the time in US terms and some of the US listeners will know this, they seems a lot more normal. A lot of guys will start out in banking and then they make the transition into corporate treasury within Europe for instance and UK and Europe it's much less so you know a lot of people will just stay in banking all the way through we won't be able to make the transition. Is it different? Do you find that it gives you a broader range perhaps because of the banking banks that are in the U.S. is that why?

Yeah, you know, in my case, I wouldn't really call it a bank job. With the work that I was doing, it was still treasury, but I was working alongside the bankers to enhance the relationship with the clients. I agree with you, I do. Even my boss, for example, he came out of banking and I think that is a very common thing. I have several good friends who started their careers out in the bank, but I also have a number of friends who were in corporate treasury and ended up on the banking side. So, you know, I think it works either way.

Doing this role within SunTrust as within client consulting and everything else. And then a role, a mainstream role, if you like, a corporate treasurer, director, treasury role came along. How did you make that transition? Was it just a natural thing? Actually, yeah, I want to be the Treasury Director there. Or how did it come about with PRG Group?

I think it was honestly, I think the consultative role that treasurers play, treasury professionals play is a vital part of the job. You know, I've always focused on identifying what my internal customers requirements were, understanding their business, understanding their challenges and then working with them from the perspective of what can we do utilizing our bank services and products to, to help improve their process. So that consultative role, you know, I think that's one of the best places where treasury people can add value and demonstrate their value to the organization. In the insurance industry we developed some products to help collect annuity payments, for example, and it actually drove additional business for the company and that was, you know, utilizing the bank product along with understanding what the needs were for the company.

And so you worked in SunTrust as a bank and then perhaps you can describe PRG and Profit Recovery Group. How was that different? You know, because again, this is one of the things we're going to go through that you work for some really interesting different companies and so treasury is different in each of those companies because you know, I've said to people, treasury is treasury, but whether you're doing widgets or whether it's financial services, there are some commonalities but some big differences as well. So can you talk through what treasury was like at PRG to. Then you made the move to UniSource, which was more of a product driven company if you like, perhaps how those transitions were and how treasury was different in each.

Cash is cash, no matter where you are so understanding cash flows is key, but understanding the business, like I said before, is very important and understanding what the challenges were. Whenever you started a new company, they want to understand what is the business doing, what are the activities, Are you domestic, are you international, are you both? You know, all those questions come to the forefront at each company that I've been at. There's been, you know, an opportunity to learn things that I didn't get exposure to before. For example, at prg, I had my first introduction to pooling. That was prior to the euro. So PRG was an international company and we were able to set up a cross currency pool structure that allowed us to concentrate US dollars back to the US without impacting actual balances that were in the pool. It was a notional pooling structure that was a great experience there. Moving on to UniSource, if I could. Yeah, PRG was only a couple hundred million in annual revenue. UniSource was a $7 billion company. You know, it had three lines of business, paper, packaging and supplies. And I got a lot of exposure there to international trade. We imported a lot of paper from China. So I was able to learn about import losses and things like that that, you know, you really wouldn't have had an opportunity in previous companies. So it seems like every step of the way you get exposure to new and different things and it expands your background. We had asset based loans at UniSource. We had to prepare borrowing certificates. That's stuff I never had to do in the past. So that's what I think has really given me the opportunity to round out my career and the extensive amount of knowledge that I've gained over the years.

And then you made a move back into sort of the mortgages world and some others. You said cash is king, but what's your ethos within treasury for that? Again, you and I discussed this before the show. Is it always keep an eye on the bottom line and then try and provide services to the company or how do you see the view of Treasury? You're sitting there as a treasurer. What's your then open door, come and ask me for this help or what's your overriding ethos?

I don't know if you'll like my answer on this one. At PRG and Generation Mortgage, those were two companies where the CEO was a personal friend of mine and those opportunities came about as a result of that relationship, more so than any strategic effort on my part. They were short term assignments. You know, I was only there at each of those companies for a couple of years. I think, you know, the sweet spot for treasury people is the bigger the company, the more complex the company, the more global the company, the more opportunities there are to do things, to learn new things, to have exposure. So those two opportunities were not, in my mind, that significant to my career overall, although I did, you know, as I said, I learned new things at each place. But Generation Mortgage was a time when I focused on metrics. That's actually something that I've brought, you know, with me to Open Text. The gentleman that I referred to that was the CEO, came out of GE and had a really broad background. He was a black belt in Six Sigma and so I learned a ton from him on developing operational metrics.

Can you just. Now I know Six Sigma and I did a lot of recruitment for, well, what was GE then became? And then GE Capital really took it over and was the engine behind ge. And then they said, no, actually we're an industrial services company and changed it all back again. But Six Sigma, it's about constant improvement and things in that metrics thing, I think that's a good thing to bring out from there. Can you describe for the listeners, again, what Six Sigma is, in your opinion, and why that's so important and how that then impacts on treasury and how you measure things?

The focus of Six Sigma is on process improvement. You can't manage what you don't measure. And so a big part of the metric development is identifying specific KPIs that are key to the business process that you can develop and track to see if you're accomplishing the objectives that you're after. I think Six Sigma came out of, I think it was Japan and was all about quality back then, was, you know, effort to make sure that you could ensure that there was very little variation in output, in production and quality, met certain parameters and things like that. But at OpenTextNow, we're spending quite a bit of time and developing new metrics to track our progress. And we've gone through a lot of transformation here and we're implementing these reports and KPIs to see if we're accomplishing what we set out to do.

And again, Open Text for the guys listening is Enterprise Information Management. What the heck does that mean? Maybe again, sort of try and translate it if you would. You translate treasury very well and things like that. But for the guys that are listening in, where will they have seen you guys? I know that you've had this incredible acquisitive journey and OpenText as a group, talk us through that.

Opentext is a very acquisitive company. We average three transactions a year. We've done over 90 acquisitions since the company was founded in 1991. We offer a number of different products where one of of SAP's leading partners and we're embedded in SAP with our product that does document management and OCR capture and things like that. So sometimes you're using our product and you don't see the name OpenText, but it's there in the system we have. One of our original products was Content Server. Companies use that product to store a lot of information that's shared across the enterprise process and procedures or you know, other documents that expense reimbursement, links to other systems, things like that are all shared on the content server. You can share files. We have a file sharing system product that we market companies. Customers can share different files with outside parties if they like through a secure system. Fax to email is a service that we offer. A big part of our offering is our supply chain product and our managed services activity. We process a lot of inbound files for one of the major banks in the us we are the network that all of their customers route their files through for delivery to the bank. And we actually piggybacked, you know, we have the luxury of utilizing our own products. So in some of our transformation projects we've been able to use some of our products for delivering our files to the banks and also receiving statement files.

Back from the banks with yourself, you know. And I again for the listeners I noticed, kept on seeing Jonathan's name coming up with regards to sort of streamlining, transforming treasury, where you're doing these efficiency gains, productivity and things like that. You particularly been recognized for some of the work you did with streamlining your banks and that process. Again, some of the people listening today, they'll be doing similar projects and they're thinking, oh right, we've got to do that. How did you set out your objectives? Or what was it just like, right, make us more efficient. These are, this assess it, boom. This is what you do or what was the thought process behind it?

As a result of the acquisitions, we kept inheriting banks and bank accounts and we got to a point where we couldn't manage all that activity in a manual environment. That kicked off our Treasury Transformation project where we implemented a Treasury management system so we could get connected to all our banks and get the visibility to our account activities. We set up a pooling structure, you know, to help manage cash in the EMEA region and then we did a bank rationalization project. And you know, none of those things are all that scientific or it's not rocket science to in any form but we were doing all those things all at the same time. And it wasn't just within Treasury. It impacted a lot of areas of the company, especially on the operating side of ar, AP and payroll. It impacted customers where we, when changing accounts, we had to notify customers and get them to remit to the new accounts. So that whole transformation process allowed us to go from over 120 banks down to a target of 20 and over 450 bank accounts down to a target of 150. Those KPIs and metrics now that we're tracking are helping us measure how successful we were and the differences it made in terms of value to the company. Metrics help tell a story, you know, shows the trend of wow, you started with from here and you went to there and look at what you accomplish and it allows you to tell the story and share that with others and again demonstrate the value that you bring to the organization.

And from that you've been through that process and someone that is listening today and they've got a hundred banks at the moment, they want to bring it down because there's going to be inevitable cost savings and visibility and things. What were the big themes before? What was the thing? Was it right, cut the banks guys and do this or how did you approach the problem? You know, was it right, let's regionalize it or how did you sort of project plan it if you like?

We didn't want to have a single bank solution for our global requirements. We felt like we didn't want to have all our eggs in one basket and we wanted to share our business with some of our key banks. So our first step was identifying strategic banks that we wanted to move forward with. You know, we picked one bank for emea, one bank for the us, one bank for Canada, which is really driven by, by the fact that we're Canadian based company bank for Latin America and one for APAC region. And from there we just started moving accounts and activities from the accounts that resided in those regions into the strategic bank. And that was a lot of effort. We, you know, we closed over 500 accounts in total during that process. And you know, it had a big impact like I said before, on our customers and our AR team. And you know, by having fewer banks it allowed us to take it a step further and integrate those banks with our systems. You know, when you're Dealing with over 100 banks, integration is almost impossible. So we were allowed to automate and integrate and gain a lot of efficiencies from those changes.

And with the team, you know, again, you'd done lots of acquisitions. Did that just mean bigger and bigger team each time and then you consolidated that as well. What was the sort of human impact to. That's the right way to put it.

Yeah, well, like a lot of companies, you know, we don't like to hire additional staff. We want to be lean and mean and manage the activities as best we can. And we reached that tipping point where we were either going to have to hire more people or find ways to be more efficient. And those changes that we made, the treasury system specifically for treasury really helped automate a lot of the manual spreadsheet tracking and you know, accessing the bank portals and doing all that stuff that, you know, you really want to get away from and automate. And that was a huge time saver. And honestly those changes, they reached out to the other groups too. Because of the integration and automation that we were able to do. A lot of the manual transactions, you know, many of the accounts payable people were logging into bank portals and initiating payments through the system that way. Now it's a straight through, end to end process through SAP onto the banks.

And all the way through. And you get that, you know. And then globally, how are you guys organized?

You know, treasury wise, we're consolidated in Canada. We do have a couple countries, you know, either for time zone, like Japan for example, and for language reasons and sometimes local regulations don't allow, you know, non local people to have access to the banks, Things like that happen. So for the most part it's all done in Canada.

And so looking at from here going forward, you've done all this automation. That's it, your work's done now is it? Sort of sit back, relax, you know, just press, press the buttons. That's what we were saying before, you know, like Jonathan's got an easy life now. I mean it's just very relaxing.

Yeah, I wish, right. But no, there's what's next? We keep doing acquisitions. We did one on Christmas Eve. You know, we have a huge pipeline of activity that, you know, we're expecting this to continue and for the company to keep growing. There's always, you know, and this is what I love about treasury, there's always something else to do. We have, you know, three or four other projects that we're working on. We're working on a credit card project to reduce our cost of acceptance by including level 2 and level 3. Data. We have a lot of card volume for our company and there's another project where we're enhancing the amount of collections through the use of credit card for smaller dollar invoices. We're not allowing those anything below a certain amount to be invoiced and paid any way the customer wants. We're mandating that they pay by card or ACH debit for example. You know, have a couple of other programs going on too. Supply chain financing is expanding at our company. So there's always a lot to do.

What's the most exciting for you out of those you say you love in the work treasury does and everything else? And again, we spoke on a pre brief call before this and there were some areas that really exciting you about all the developments. What are the things that you see? Sometimes talk to treasurer like yourself and they say, well, you know, you've been pushed out in the the forefront of things by the CFO saying, look, can you assess this? Can you assess this AI, can you look at this? What are the things coming at you that you think? And again, you're a very tech focused company by your very nature of what you do. Is it the tech that's coming down or is it what are the things you think that are sort of presenting biggest opportunities for treasurers?

Yeah, I think technology, you know, continues to grow and opportunities for additional efficiencies and integration, automation, that's always out there happening. I think a lot of times what's going on now is happening behind the scenes and it's not like we're actually working on a project to do anything like that. There's one of my big concerns is what's going on in cyber and fraud and having the ability to keep up with the activity, have the visibility to what's going through our accounts and put the proper controls in place and relying on the banks as well to have those AI systems in the background that are looking at each transaction.

So John, we were just talking, you know, see again, we're driving more towards the cyber world and everything else. And we've said before that 20 years ago that wasn't something a treasurer necessarily would have in their wheelhouse. Now it seems like it's a key thing and particularly you guys at OpenText, can you describe what you're seeing and what your thoughts are?

Cyber is an important area of focus for us in treasury here because not only do we have the exposures for activities that might go against our bank accounts, but we're also responsible for insurance placement at OpenText and a big part of OpenText is information processing for our customers. So we have to make sure that our systems are secure and make sure that we have all the proper controls and security in place to protect our customers data. So that's a big area of focus for us. We have a lot of different network capabilities, a lot of different types of information going across our networks and don't always know exactly what customers are transmitting across our lines. So it's vital for us to have that commitment to our customers that our systems and information is secure for them.

As you say, there's got that resilience and they can rest assured sort of thing. Looking, we come sort of towards the end of today's show. People will look back at your profile and we'll put in your profile on, you know, your LinkedIn profile on the show notes and things like that. But you've been a Treasury executive for many, many years and looking back over it, you know, what would you say are the advice you would give? Some, some they look at it and say, do you know what? I want to have a similar background. That role would really interest me. What are the key things you would say to, you know, the guys listening today?

I think having a financial background is key, but I think, you know, paramount to being successful in treasury is being able to communicate with other areas of the company, being able to understand the business and reach out to different areas and understand what their objectives and goals are and what their challenges are. It's not like you can just sit in the treasury office and do your daily duties anymore. You have to go out and reach out to your internal customers and to really add the most value. I think that consultative approach we talked about earlier is really a great opportunity to bring additional value and profit to.

The company and really get involved with the business as a whole. Rather than just be ivory tower and sort of sitting back, it's actually getting involved with the different business partners.

Absolutely.

And if you're in a company just, again, sorry, just to go on sort of slight end, if you're in a company that doesn't support that, and I'm not saying it's not a supportive company, but perhaps, you know, they've seen treasury in its, you know, sort of slightly siloed or, you know, not ivory tower, but sort of separate to the business, how have you got to know the business? How have you really pushed that agenda.

Forward, as it were, by developing relationships, by, you know, introducing yourself to these other people, explaining to them, you know, what, you know, in treasury, what, where opportunities might exist, but listening to them, you know, developing that important relationship, having that communication go both ways, what can I do for you? What can you do for me? And working in a partnership setting and to get the best outcome.

Yeah, it's a partner, partner, partner. Awesome. Unless anything else. And we'll put your LinkedIn profile in the show notes. If people think it's right and you want to have them in your network, we'll get you connected with them. But any final words of the day?

Treasury is a fantastic career. I've enjoyed it immensely. I can't think of anything I would rather be doing other than maybe playing golf on the PGA Tour, but it's been an awesome career for me and I've met a lot of people. I've had opportunities to travel all over the world and meet people and. And it's been fantastic. I would recommend it to anyone.

Same here. Well, that's it. I've been talking to treasurers 20 plus years. And, you know, this is why we brought it to life on the podcast, because I think people said, oh, a podcast with treasurers. I was like, yeah, it's brilliant. And actually, you know, 26,000 downloads later, a lot of people like listening to it and listen to your story. So thank you for sharing your story with us today, Jonathan. It's been amazing and look forward to seeing you in the future. Thank you.

Thank you, Mike.