Use Case: Comprehensive Treasury Management for Global Corporation XYZ*

Overview:
Corporation XYZ, a multinational organization with diverse business operations, needs to manage its global
financial operations efficiently. The company faces challenges in cash and liquidity management, risk
management, and financial reporting. To address these challenges, Corporation XYZ implements SAP S/4HANA
Treasury Management to streamline its treasury processes.

1. Cash and Liquidity Management

Scenario:
Corporation XYZ must manage cash across multiple subsidiaries in different countries. The company needs
real-time visibility of its cash position and forecasts to optimize working capital.

Detailed Explanation:

 Cash Position Management: SAP S/4HANA enables Corporation XYZ to monitor the cash positions of
its various accounts across banks in real-time. The module consolidates data from all subsidiaries,
providing the CFO with a unified view.
 Liquidity Forecasting: This sub-module helps predict future cash flows by analyzing accounts
receivable and accounts payable. XYZ can plan for potential shortfalls or surpluses, enabling proactive
financial decision-making.
 Bank Account Management (BAM): Allows the company to manage its bank accounts centrally,
ensuring compliance with internal controls and reducing fraud risks.

Outcome: Real-time visibility into cash flows and forecasts helps XYZ optimize cash utilization, reducing the
need for external financing.

* CONFIDENTIAL CLIENT SO THAT GIVEN AS ABC /XYZ

2. In-House Cash Management

Scenario:
Corporation XYZ has multiple subsidiaries that regularly engage in intercompany transactions. The corporation
aims to minimize the number of external bank transactions to reduce fees and improve efficiency.

Detailed Explanation:

 Intercompany Netting and Settlements: This feature centralizes the processing of intercompany
payments. XYZ can net payments between subsidiaries, minimizing the number of transactions.
 In-House Bank: An internal banking structure where subsidiaries hold accounts with the company’s
treasury center. This allows XYZ to act as a bank for its subsidiaries, processing payments and
managing liquidity internally.

Outcome: XYZ reduces the costs associated with external bank transactions, enhances cash visibility, and
improves intercompany financial management.

3. Debt and Investment Management

Scenario:
Corporation XYZ needs to manage its debt portfolio, which includes loans and bonds, and optimize its
investments for better returns.

Detailed Explanation:

 Debt Management: SAP S/4HANA helps track debt instruments such as loans and bonds, ensuring
accurate interest calculations and amortization schedules.
 Investment Management: The system assists in tracking investment portfolios, managing risks, and
analyzing the performance of investment instruments (e.g., equities, fixed income).
 Hedge Accounting: To protect against foreign exchange fluctuations, XYZ enters into hedging
contracts. The module ensures that these contracts comply with regulatory standards and are
reflected accurately in financial statements.

Outcome: Corporation XYZ can efficiently manage its debt and investment portfolios, maintain compliance ith
international accounting standards, and minimize financial risks.
4. Risk Management

Scenario:
Corporation XYZ is exposed to foreign exchange, interest rate, and commodity price risks due to its global
operations. The treasury team needs to mitigate these risks to protect the company's profitability.

Detailed Explanation:

 Market Risk Analyzer: This sub-module helps monitor exposure to financial risks and provides tools for
assessing the potential impact of market movements.
 Credit Risk Management: Ensures that credit risks associated with counterparties (e.g., banks,
suppliers) are managed by setting limits and monitoring exposures.
 Commodity Risk Management: Provides tracking and management of commodity contracts to
mitigate price volatility for raw materials.

Outcome: The risk management capabilities allow XYZ to anticipate and mitigate potential financial impacts,
ensuring stable earnings and financial health.

5. Financial Risk Management (Hedge Management and Hedge Accounting)

Scenario:
XYZ uses financial derivatives like forwards, options, and swaps to hedge against unfavorable movements in
exchange rates and interest rates.

Detailed Explanation:

 Hedge Management: Enables the identification, documentation, and valuation of hedges. XYZ’s
treasury team can create strategies to align with the risk appetite and objectives.
 Hedge Effectiveness Testing: SAP S/4HANA ensures that hedges meet the accounting criteria for
hedge effectiveness, crucial for compliance with IFRS 9 or other local accounting standards.

Outcome: The corporation can effectively manage and document its hedging strategies, ensuring compliance
with accounting regulations and reducing volatility in financial results.

6. Treasury and Risk Operations (Transaction Management)

Scenario:
Corporation XYZ needs to handle transactions such as money market instruments, foreign exchange deals, and
securities.

Detailed Explanation:

 Transaction Management: Supports the entire lifecycle of financial transactions from initiation to
maturity. XYZ can process foreign exchange contracts, securities transactions, and derivative
instruments.
 Integration with Payment Processes: Ensures seamless integration with SAP Payment Engine for
automated settlement and payment processing.

Outcome: XYZ's treasury team can manage and track transactions efficiently, improving operational control
and ensuring accurate financial reporting.

7. Integration with Financial Supply Chain Management

Scenario:
Corporation XYZ aims to enhance its working capital by optimizing its accounts payable and receivable
processes.

Detailed Explanation:

 Integration with SAP Receivables Management: Ensures that XYZ can automate collections and
improve customer payment behavior analysis.
 Integration with SAP Payables Management: Enables efficient handling of supplier payments,
optimizing payment terms to free up cash.

Outcome: Enhanced integration of treasury and financial supply chain processes helps XYZ maximize cash
flow, reduce days sales outstanding (DSO), and improve supplier relationships.
8. Treasury Reporting and Analytics

Scenario:
Corporation XYZ's CFO needs detailed reporting for strategic decision-making and board presentations.

Detailed Explanation:

 SAP Fiori Dashboards and Analytical Apps: Provide real-time reporting and insights into key treasury
metrics such as cash positions, risk exposures, and investment performance.
 Customizable Reports: Users can create custom reports to track specific KPIs relevant to the
organization’s strategic goals.

Outcome: Accurate and comprehensive reporting facilitates better decision-making and supports strategic
initiatives with up-to-date financial insights.

Final Outcome:

By implementing SAP S/4HANA Treasury Management, Corporation XYZ achieves centralized control of its
global treasury operations. The integration of sub-modules like cash and liquidity management, debt and
investment management, risk management, and financial reporting ensures that XYZ operates efficiently,
reduces costs, and maintains compliance with global financial regulations. The system enhances cash visibility,
optimizes working capital, and mitigates financial risks effectively.
Use Case: AI-Powered Treasury and Risk Management (TRM) for Corporation ABC

Overview:
Corporation ABC is a global leader in manufacturing with complex financial operations spanning multiple
regions. With the aim of enhancing decision-making, optimizing cash flow, and proactively managing risks,
Corporation ABC adopts an AI-powered SAP Treasury and Risk Management (TRM) solution. The integration of
AI capabilities in TRM enables advanced analytics, predictive insights, and automated workflows to manage
the company’s treasury operations more effectively.

1. Cash and Liquidity Management Enhanced by AI

Scenario:
Corporation ABC requires real-time cash visibility and predictive liquidity planning to handle cash reserves
efficiently and meet future obligations without liquidity shortfalls.

AI Integration Explanation:

 Predictive Cash Flow Forecasting: AI models analyze historical cash flow data, transaction patterns,
and market trends to predict future cash flow scenarios. This predictive feature helps the finance team
anticipate potential liquidity shortfalls and surpluses more accurately.
 Automated Anomaly Detection: AI algorithms continuously monitor transaction data to identify
unusual activity, such as discrepancies in cash flows or unexpected fund movements, enhancing fraud
prevention.

Outcome: Corporation ABC gains enhanced visibility into future cash positions, enabling proactive
management of cash reserves, improved decision-making, and increased fraud detection capabilities.

2. AI-Powered In-House Cash Management

Scenario:
Corporation ABC uses an in-house banking system to manage intercompany cash transfers. The process
involves complex netting and settlements, which are prone to errors and delays.
AI Integration Explanation:

 Automated Reconciliation: AI-powered reconciliation tools match intercompany transactions in real-

time, identifying discrepancies and suggesting corrections. This reduces manual intervention and
speeds up the settlement process.
 Intelligent Netting Optimization: AI algorithms analyze historical payment patterns to suggest optimal
netting arrangements that reduce the number of external transactions, minimizing transaction fees
and improving efficiency.

Outcome: Corporation ABC benefits from faster, error-free intercompany settlements, reduced banking costs,
and improved cash flow management.

3. AI-Driven Debt and Investment Management

Scenario:
Corporation ABC holds a diversified portfolio of debt instruments and investments, including loans, bonds,
and equity stakes. The company seeks to optimize its debt management strategy and maximize investment
returns.

AI Integration Explanation:

 AI-Based Investment Recommendations: The AI engine assesses market trends, interest rate
forecasts, and company financials to recommend optimal investment strategies that align with
Corporation ABC’s risk appetite and financial goals.
 Debt Management Insights: AI evaluates debt obligations and suggests refinancing opportunities or
early repayment options when market conditions are favorable, helping the company reduce interest
expenses.

Outcome: Corporation ABC is equipped to make data-driven debt and investment decisions that enhance
financial stability and profitability.
4. Advanced Risk Management with AI

Scenario:
Corporation ABC is exposed to market, credit, and operational risks due to its global operations. The company
needs an AI-enhanced approach to identify, assess, and mitigate these risks.

AI Integration Explanation:

 Market Risk Forecasting: AI algorithms analyze global market data, geopolitical events, and financial
news to provide predictive insights into potential market risk fluctuations. This helps the company take
preemptive measures, such as hedging.
 Credit Risk Scoring: AI models assess the creditworthiness of counterparties by analyzing internal and
external data points, including payment histories, financial statements, and market sentiment.
 Automated Risk Alerts: AI continuously monitors risk exposure and sends real-time alerts to treasury
managers if preset risk thresholds are exceeded.

Outcome: Corporation ABC effectively anticipates and mitigates potential financial and credit risks,
safeguarding the company’s bottom line and protecting against volatile market movements.

5. AI-Enhanced Hedge Management

Scenario:
Corporation ABC uses hedging strategies to manage its exposure to currency fluctuations and commodity
price risks. The treasury team needs to ensure that hedging is optimized and meets compliance requirements.

AI Integration Explanation:

 Dynamic Hedge Strategy Recommendations: AI evaluates real-time data and suggests the most
effective hedging instruments to protect against adverse movements in exchange rates or commodity
prices.
 Hedge Effectiveness Testing Automation: AI performs ongoing effectiveness testing to ensure that
hedge relationships comply with IFRS 9 or other applicable regulations.

Outcome: The use of AI reduces manual effort in managing hedges, enhances strategy formulation, and
ensures compliance, resulting in a more agile and effective hedging process.
6. AI in Transaction Management

Scenario:
Corporation ABC’s treasury department processes a high volume of financial transactions, including foreign
exchange deals, derivatives, and securities trading. Manually managing these transactions can be time-
consuming and prone to errors.

AI Integration Explanation:

 Smart Trade Execution: AI assists in executing trades at optimal times by analyzing market data,
identifying trends, and forecasting exchange rate or price movements.
 AI-Powered Workflow Automation: Repetitive tasks such as data entry and transaction approval
routing are automated using AI, freeing up treasury staff for more strategic activities.

Outcome: The transaction management process becomes faster and more accurate, reducing operational
overhead and the potential for human error.

7. AI-Driven Reporting and Analytics

Scenario:
Corporation ABC’s treasury management team needs to provide comprehensive reports to senior
management and the board, with insights into key performance indicators (KPIs), risk exposures, and cash
positions.

AI Integration Explanation:

 Interactive Dashboards: AI-powered SAP Fiori dashboards deliver customizable, real-time visual
reports, allowing decision-makers to drill down into specific metrics or trends.
 Predictive Analytics for Reporting: AI generates predictive analytics that supports strategic planning
by forecasting future cash positions, investment returns, and risk impacts.

Outcome: Corporation ABC benefits from data-driven insights, empowering the finance and treasury teams to
provide actionable intelligence that informs executive decisions and strategic planning.
Final Outcome:

Corporation ABC successfully integrates AI-powered SAP Treasury and Risk Management to transform its
treasury operations. The system automates routine tasks, provides predictive insights, and enhances decision-
making capabilities, leading to better cash and risk management, reduced operational costs, and improved
compliance. The seamless combination of AI and SAP S/4HANA TRM ensures that Corporation ABC remains
agile and competitive in a rapidly changing financial landscape.