EuroFinance

GE Healthcare, a prominent global provider of medical technology and digital solutions, faced a critical challenge with its recent separation from General Electric. As the company charted its own course as an independent entity, it needed to reinvent its treasury function from the ground up. This transformation was not merely about adapting existing systems but about establishing a treasury function that was agile, efficient, and tailored to the company’s unique operational needs.

The journey began with the ambitious goal of creating a streamlined and modern treasury system that would support GE Healthcare’s strategic objectives and future growth. This involved replacing a labyrinth of legacy systems with a unified, cost-effective approach, all while ensuring that the new function could handle the complexities of a standalone business. The result was a treasury function designed to meet both immediate and long-term requirements, setting a new standard for operational excellence in the industry.

GE Healthcare has been recognised with the EuroFinance 2024 Technology Transformation Award for its exceptional use of technology in reshaping its treasury operations. The award highlights how GE Healthcare’s treasury team has harnessed advanced tools and platforms to streamline financial processes, enhance data-driven decision-making, and drive operational efficiency, setting a new benchmark in treasury management.

Crafting a treasury fit for purpose

When GE Healthcare spun off from General Electric, it faced the task of creating a new treasury function from scratch. According to Aditi Agarwal, Chief of staff and global operations leader at GE Healthcare, the goal was to build a treasury function that was “fit for purpose” and specifically tailored to the company’s needs. “Our focus was on developing a structure that not only met our immediate requirements but was also scalable for future growth,” Agarwal explained.

Unlike the treasury systems used by GE Capital, which were extensive and complex, GE Healthcare needed a streamlined and efficient setup. The aim was to craft a treasury that could handle the unique challenges of a standalone entity while being flexible enough to support its evolving business needs, according to Agarwal.

Streamlining systems and enhancing automation

A significant aspect of the transformation involved replacing 36 legacy systems with nine new, advanced solutions. This shift was driven by the need to move from customised systems to standardised Software as a Service (SaaS) applications. Agarwal noted, “Transitioning to SaaS solutions was crucial for us. It allowed us to simplify our operations, reduce maintenance costs, and improve overall efficiency.”

The transformation process was meticulously planned, with a five-month testing phase ensuring a seamless integration into GE Healthcare’s operations. The consolidation of systems not only streamlined processes but also positioned the company to leverage cutting-edge technology for enhanced performance.

Achieving cost efficiency

One of the most notable outcomes of the transformation was the significant reduction in costs. By moving to standardised SaaS applications, GE Healthcare achieved an estimated 80% reduction in operational expenses. Agarwal attributed this success to the strategic choice of solutions that aligned with the company’s financial objectives. “Our new systems have drastically reduced our costs while providing greater functionality,” Agarwal said.

The transition also included optimising market data sources, which was essential for aligning with the company’s simplified financial structure. This approach ensured that GE Healthcare could manage its resources more effectively while maintaining high standards of operational efficiency.

Strategic partnerships and managing complexity

The successful implementation of the new treasury function was made possible through close collaboration with various internal teams, including IT, tax, legal, and controllership. Agarwal highlights the importance of these partnerships: “Working with our IT, tax, and legal teams was essential in ensuring the success of treasury function. No Treasury can function in isolation and need the collaboration of the cross function team” 

The treasury team at GE Healthcare played a critical role in managing complex transactions. This included overseeing over 900 bank accounts and handling FX exposure in more than 50 currencies.  The expertise of the treasury team, coupled with strategic external partnerships, was instrumental in navigating these complexities.

Few of the challenges included building a fit for purpose global treasury organization from scratch in 12 months. This involved hiring and training more than 50 professionals across 15 countries. Working with speed without compromising on quality and control was another challenge which the team balanced well and managed to build all its systems and processes within 12 months. 

The treasury function’s ability to effectively manage these aspects was vital in supporting the company’s overall strategy. The focus on compliance and process management helped GE Healthcare navigate the complexities of its new operational environment with confidence.

Looking ahead

As GE Healthcare continues to evolve, the robust foundation of its new treasury function will play a pivotal role in supporting its growth and adaptability. The emphasis on creating a tailored, efficient, and cost-effective treasury function has positioned the company for future success. Agarwal reflects on the journey: “Building a new treasury function from scratch was a significant undertaking, but it has set us up for long-term success. We’re now in a strong position to support our growth and continue delivering on our mission.”

The transformation of GE Healthcare’s treasury function is a testament to the company’s commitment to operational excellence and strategic foresight. By focusing on tailored solutions, leveraging advanced technology, and fostering strategic partnerships, GE Healthcare has established a treasury function that will serve as a cornerstone of its ongoing success.