MANAGEMENT REPORT ON THE STRATEGIC SIGNIFICANT EVALUATION OF PROJECT GRIFFIN

Technical requirements:

As described in the assignment brief.

INSTRUCTIONS
The field study provides students with an opportunity to apply the fundamentals of Executive Project Management, and all other facets of the MBL programme in a systems manner of thinking. The field study serves a dual purpose. Firstly, it describes and analyses the organisational set-up and its business environment, and secondly, it looks at the typical project environment within the organisation, and the dynamics of managing a project at the strategic level.
Recommended approach
Select a project of strategic significance (100% completed or 75% completed) in an organisation of your choice. The evaluation of this chosen project must be done in the following four phases:
Phase 1:
To assess the potential impacts on the project from the business environment surrounding the project
This requires using a wide variety of business techniques to identify and assess the potential impacts from the macro-, market and microenvironments on the project.
Phase 2:
To assess the strategic positioning of the project
within the organisation’s overall project pipeline of projects
within the organisation’s organogram, policies, systems and procedures
relative to competitors, supply/demand, protecting existing value, creating new value, et cetera

Phase 3:
To assess the project environment within the organisation and the dynamics of initiating the project efficiently at the strategic management level. Benchmark your assessment against guidelines in your prescribed textbooks.
Phase 4:
To make recommendations to the board of your chosen organisation on each of the above phases to improve the effectiveness of supporting the project management environment in the organisation.
Resources required for this field study
All the prescribed study material for Executive Project Management and all other relevant study material prescribed or recommended by the MBL programme.
A lecturer at the school who will be allocated to you to act as your academic mentor. You can expect the following from your mentor: guidance in terms of selecting a project of strategic relevance, challenging your assumptions and integrity of data; guidance towards a holistic and balanced approach; and lastly, general management inputs. The mentor will also act as your first examiner of the field study.
The goodwill and cooperation of your chosen organisation.

Outcome
You have to submit a 50-page management report, plus appendices.
Two bound copies must be given to the course administrator for marking.

Confidentiality
If confidentiality is expected of you from your chosen organisation, please contact the course administrator.
Some practical guidelines
Please select a project that is not classified as top secret — you do not wish to enter into a confidentiality nightmare!
Ensure that your chosen project is of strategic significance. A minimum capital value of +US$1 million may be used as a benchmark.
Your chosen project may either be “hard” (e.g. building a plant) or “soft” (e.g. doing a merger transaction). It may also be on the corporate, business or functional levels of strategy implementation.
Secure the goodwill and interest of your contact person in your chosen organisation. Ideally, this person should become your in-house mentor!

What this field study is not
It’s not about the evaluation of a company.
It’s not about evaluating the “insides” of the project itself.
It’s not about supplying a consulting service to the organisation to solve its strategy, financial, leadership or value chain problems.
It’s not a one-dimensional evaluation of the project (e.g. not only a financial analysis of the project).
It’s not an assessment of any organisational issue or initiative that does not comply with the definition of a project.

Layout of the management report on the field study
The following generic layout will guide you towards applying a holistic approach:
Executive summary

Approach taken to do this field study — How was optimality assured?

Profiles of the chosen organisation and project.

Compliance assessment of the project to key definitions of a project.

Theory and practice of the assignment theme.

Issues under Phase 1.

Issues under Phase 2.

Issues under Phase 3.

Issues under Phase 4.

References

Appendices

Case Study:

SABMiller’s European Treasury Centre Implementation Improves FX Management
Giles Newell, Deputy Treasurer, SABMiller plc
This case study, which won the Foreign Exchange (FX) Project of the Year category at the gtnews Awards 2012, explains how Project Griffin at SABMiller built a European treasury centre in the UK to provide efficiencies and standardisation. The project has enhanced control and reduced risk across the board at the brewer, in addition to generating substantial savings and transparent workflow optimisation in FX pricing, cash and exposure forecasting. The case study is shared here to provide an overview of effective FX operations and in order to encourage best practice among treasuries.
The strategic objective of Project Griffin, the Pooling and central name given to the implementation of a new funding benefits far European treasury centre at the multinational brewer, SABMiller, was to leverage the scale exceed the original of the corporation to deliver improved control business case and cut costs and risk exposures, including on estimate of US$1m. its foreign exchange (FX) activities. Working in partnership with partners at IT2 and Citi, the project was started in 1 November 2010 and completed on time and on budget in April 2012. The aim was to establish best practice treasury operations throughout the region, centralised on the UK offices. The key requirements in the project plan were to:
Photograph: http://stefangustafsson.com/

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IT2 Treasury Solutions, with permission. Originally published on gtnews.com

9th July 2012
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Transition from decentralised to centralised treasury management at SABMiller by establishing a European treasury centre in the UK. Introduce an IT2 treasury management system (TMS) to Bank fees have been reduced the European business units, providing dependable FX by approximately US$0.5m exposure and cash forecast per annum management capabilities. Ensure risk management centralisation. Introduce European bank rationalisation, reducing the number of local banking partners, and make Citi SABMiller’s European regional bank. A simplified banking landscape was also targeted, allowing for an easier rollout of SWIFT FileAct/XML capabilities for operational banking purposes, covering accounts payable (A/P) and accounts receivable (A/R). The project aims, described above, were delivered over an 18 month deployment, across 12 countries and 14 businesses. FX and full time equivalent

The Griffin team’s approach to project management was central to achieving a superior result in terms of completeness, quality and timeliness. All 12 countries are now completely migrated to the new system, meaning that in excess of US$1bn in FX exposure is now under central treasury management at SABMiller. The on-time execution of the project plan was thanks to the hands-on approach taken by SABMiller senior treasury executives and staff, allied to strong central management and scope discipline. A transparent project methodology, clear management lines of responsibility and escalation paths were also important. No extra resource was needed beyond the original plan. The successful implementation of the new TMS and centralised European treasury centre involved diplomatic negotiations with the existing European business units’ finance management structure, while enforcing SABMiller’s standardised treasury operations model. Challenges The excellence of the SABMiller treasury team’s project management minimised the obstacles and difficulties encountered when implementing Project Griffin. The team worked collaboratively with a diverse group of

(FTE) benefits estimated to be worth US$1m per annum.

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IT2 Treasury Solutions, with permission. Originally published on gtnews.com

9th July 2012

finance executives, from countries including the Czech Republic, Poland, Hungary, Switzerland, Slovakia and Romania. The education, planning and rollout processes needed to achieve the local business units’ buy-in, in order to ensure that the project benefits were worthwhile, realistic and deliverable. The centre might enjoy the benefits of cost savings, banking efficiencies and improved controls, but the local business units needed to understand and accept the real overall corporate value of making cuts to their budgets. This required creativity and flexibility. SABMiller treasury also successfully managed the substantial workload of financing the simultaneous Foster’s beer acquisition, worth AUD$10bn (USD$10.1bn), without disrupting Project Griffin – a major achievement considering the amount of work involved in both initiatives. Benefits The precision of Project Griffin’s planning left little room for achieving benefits beyond the original project scope. There was one such benefit, however, relating to accommodating a much more granular approach to hedge accounting than was originally envisaged. This takes advantage of IT2’s inhouse bank (IHB) facilities to allocate external hedges to more specific accounting categories, such as inventory, capital expenditure and operational expenditure. As a result, the actual deal volume is approximately double what was originally planned, and has been managed without cost increase or timetable slippage. Project Griffin has already yielded a number of other, expected benefits. The advantages of the new TMS, harmonised banking infrastructure and new centralised European treasury operation are quantifiable against the previous situation at SABMiller, delivering:
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A reduction from 25 banks to one regional European bank.

Pooling and central funding benefits that far exceed the original business case estimate of US$1m. There has been a reduction from 25 banks to one regional European bank, namely Citi. Bank fees have been reduced by approximately US$0.5m per annum. A simplified banking landscape allows for an estimated one-off deployment cost saving to be achieved for the installation of SWIFT FileAct/XML capabilities (still to be deployed).

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IT2 Treasury Solutions, with permission. Originally published on gtnews.com

9th July 2012

Regional cash visibility via SWIFT messaging into IT2 and concentration had already been optimised through an earlier phase of the Citi multicurrency cash pool implementation. Technology and Centralised FX Dealing

SABMiller now enjoys the dual benefits of SAP-based enterprise resource planning (ERP) and management, plus IT2’s valueadding cash, treasury and financial risk management

Technically, the results have been achieved using the web-based IT2 NET module to intercommunicate between the business unit network and the centralised European treasury centre in the UK, producing the required robust, cost effective 24×7 service needed for proactive treasury management. There are about 40 IT2 NET users supporting this part of the business. FX pricing performance has been optimised through leveraging the efficiencies and added value of centralisation via a straightSABMiller can now concentrate through processing (STP) link FX exposures in the IHB, and between IT2 and 360T, compared with the business execute securely with the most units’ pre-project performance competitive counterparty. with their local banks. In Europe, SABMiller can now concentrate FX exposures in the IHB, and execute hedges securely with the most competitive counterparty. The centralisation of FX dealing brings the additional benefit of broadening the scope of counterparty risk management; this enables the treasury team to manage this kind of risk more effectively, with the efficient use of dealing lines and transparent exposure management. The estimated deployment cost savings are based on the completion of a standard SWIFT FileAct/XML interface between Citi and SAP, meaning it is no longer necessary to build and support a series of one-off interfaces, enhancing the control quality and efficiency of A/P workflow on a continuous basis. SABMiller now enjoys the dual benefits of SAP-based enterprise resource planning (ERP) and management, plus IT2’s value-adding cash, treasury and financial risk management facilities.

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IT2 Treasury Solutions, with permission. Originally published on gtnews.com

9th July 2012

Centralisation has generated many benefits through the concentration of front and back office professional resources and expertise, versus the preceding localised arrangement. The highly automated IT2 workflow integrates the information flows for SWIFT (for statement and payment management and deal confirmation), SAP (for G/L), 360T (for dealing) and the subsidiary network via IT2 NET (for FX exposure and cash flow forecasting), reducing manual effort and error potential, and significantly enhancing transparency and control. The critical mass of headcount now allows best practice segregation of duties. Forecasting frequency has now been upgraded to weekly for cash flows, on a 12-week rolling basis, and quarterly for FX exposures, on a rolling 18-month basis. The new environment now allows material forecast changes to be made on an ad hoc basis, at the business units’ discretion. The centralised organisation also provides a future platform for the development and deployment of forecasting performance measurement and management tools at SABMiller.

This case study is based upon an entry into the gtnews Awards for Global Corporate Treasury 2012, sponsored by Bank of America Merrill Lynch. The winners of this year’s annual awards, now in its third staging, were only revealed at a gala dinner on 24 May at the Sofitel Grand Hotel in Amsterdam, the Netherlands, after the opening of the two-day gtnews Forum for Global Corporate Treasury conference. This winning SABMiller entry is shared here from the Foreign Exchange (FX) Project of the Year category as a best practice guideline and commentary. To see a full report on all the Awards winners and the gala dinner on 24 May please click here.

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IT2 Treasury Solutions, with permission. Originally published on gtnews.com