Treasurer Spotlight10 Minutes With The TreasuryManaging treasury through a spin

Managing treasury through a spin

In this latest treasurer interview, we talk to Mike Cassidy, Treasury Director at Wyndham Destinations, about how he’s navigating his treasury team through a spin and restructure – and how technology fits in with this.

Please can you share some background about your role and your treasury team

At the moment, my group actually services two companies. What has been very prevalent in the industry I work in is that the timeshare part and the hotels part have gone their separate ways. Wyndham followed this model last year. However, because of the economies of scale etc, we as an in-house banking team – and that’s our primary role – service both companies. I’m a timeshare employee and my team are timeshare employees, but we sit in a hotel’s office, because we happen to be based in London.

What I’m trying to say is that, in terms of the journey, on the timeshare side we’re quite well down the road, because we’ve been a client of Kyriba since 2011. Whereas with the hotels, we took on the platform just last year when the spin happened. That leaves us in the unusual position where we’ve got both sides of the coin – a new development alongside a slightly older implementation/.

What have you learned from the more developed timeshare treasury management system that you can push into the hotel side when developing a new platform and relationship with a solution provider?

To be honest, I think there was a certain amount of cut and paste because we didn’t have much time! The announcement for this spin took place in late summer 2017 and the actual spin took place in June 2018. It was a restructure, because we sold part of our business into private equity and we also so bought another hotel company, which we merged into the newly spun hotel company, which we called Wyndham La Qunita. In short, there was an awful lot of work to be done, and not many people to do it, so we followed the path that we knew.

However, we’re now at that juncture where we’re beginning to think, ‘well, this worked for timeshare, this is what we’re doing, but maybe for hotels, we should look at something different. That’s coming more to the fore now. Last year was all about just getting through the spin. There wasn’t really a lot of time to think about post spin, which is beginning now.

In what ways do you think treasury can really benefit from technology?

I think undoubtedly, it’s about automating the repetitive tasks. There are issues around visibility, understanding your cash position, understanding your exposures etc. which are vital and if you can use technology to enhance the treasury viewpoint it’s clearly beneficial.

And then there’s the actual ability to do things. Before we had Kyriba, we did have an in-house bank, but it was outsourced to one of our banking partners in Dublin, simply because we didn’t have a TMS. Being able to run an in-house bank internally wouldn’t have been optimal. When we took on Kyriba in 2011 it gave us more possibilities. And one of those was to basically introduce our own in-house bank and create it and run it exactly as we wanted it.

When you’re dealing with something that is outsourced, there’s always a certain amount of fitting around their processes and then fitting around you, it’s, it’s never going to be totally optimal. When you’re able to create it yourself, you can pretty much flex it as to what you want it to do. From my own personal position, since I run the in-house banks for both companies, that’s obviously the biggest benefit.

How complex are the organizations from a treasury perspective and has the spin had a positive impact or made it tougher?

In so many ways we’re a classic kind of multinational company. To be honest, the spin has probably simplified certain things. So, for instance, before the spin we had hotels, the timeshare business and a rentals division doing something else, a bit like Airbnb. Whereas now, timeshare is a complex industry, by its very nature. Hotels is a bit less complex, because it’s very much a B2B industry because of our 9,000 hotels, the vast bulk are either franchised or managed. Again, we are going to work through how to make things more optimal than perhaps we did prior to the spin, simply because there’s more visibility, and we are able to focus as a hotel company on optimizing that business and finding solutions that work for hotels. Previously, we were having to find a solution that was multi-industry.

From what you’re saying there, allied with the automation of processes, does it mean that you’ve been able to become a much more strategic treasury that’s central to the wider organization?

I think we’re getting there. I think, as I mentioned earlier, we’re at the stage now where we’re able to take a breather after spin, look at the solutions that are in place, and work out whether those are fit for purpose for our new circumstances. It’s what I would call an evolving process.

For other treasurers adopting a new treasury platform, what advice would you give them?

I think, first of all, you must get buy in from the whole organization, otherwise it won’t happen. You’ve got to understand what you want it to do, both in the immediate term and also, I think, in the medium term. It’s hard to look out 20 years, but I think you can look out two to five years. What direction do you think your company’s going in? Think in those terms because you want it to be a scalable solution and that’s maybe where the modular side of things kicks in.

You also have to think about who you want to use the system. Is it just going to be the Treasury Department or is it going to be the wider finance team? Then you’ve got to think about pricing? The old model was a high upfront cost, but anyone could use it. The new model is more subscription based. But let’s face it, if you’re in an organization, and you turn around to your accountants and say ‘okay, if you want to see cash and you want to make payments, it’s going to cost each of you $300 a month’, you may not get many takers. You’ve got to think of it like that.

Finally, test it. Kyriba, for example, has a sandbox, so use it! The more testing you do, the better and smoother your actual implementation will be. That’s my key piece of advice!

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