Streamlining Foreign Exchange Management Operations with Corporate Financial Portals

Global competition and decreasing profit margins force companies to reduce their operational costs. This puts pressure on all business units and operations, including financial management. One approach to increase operational efficiency is the automation of existing processes by eliminating unnecessary manual interventions. Alternatively, one can design and implement new, improved processes. This is a challenging task that gets even more complex if the financial management has to deal with the heterogeneous environments of a multinational corporation. In this sense, the deployment of information systems that help to reduce the complexity of integration, communication, coordination, and collaboration challenges is required. Thus, financial management is in search for the equivalent of the global information system postulated by Chou (1999). In this work, we present and discuss the concept of the corporate financial portal as a global financial information system and management reporting tool. We discuss the extent to which corporate financial portals can help to meet the information management challenges of today's multinational financial management. To complement the theoretical argumentation, we present the foreign exchange management practices as they are currently conducted by the Bayer AG, a German company with core competencies in the business areas: health care, nutrition, and high tech material. By the means of a corporate financial portal and respective service implementations, Bayer's foreign exchange (FX) management practices have been fundamentally restructured and simplified. We evaluate the impact of the corporate financial portal implementation on Bayer's foreign exchange management practices by analyzing the transaction data from 2002 to 2006. The chapter is structured as follows: Section 6.2 briefly outlines the challenges the financial management of multinational corporations has to face. In today's international environment, financial management on a corporate level is faced with