Warner Bros. Discovery’s Treasury Transformation with Kyriba

When Warner Bros. Discovery completed its merger in 2022, it created an opportunity to review and overhaul the treasury function. The result was a treasury that streamlined and rationalized processes and responsibilities, leveraging Kyriba to drive new levels of efficiency.

In this panel session from KyribaLive 2023, Warner Bros. Discovery and system implementation partner Actualize Consulting detailed the before, during, and after of this treasury transformation, explaining how this complex project was managed easily with Kyriba’s enterprise liquidity platform. Winner of Kyriba’s Implementation of the Year award, Warner Bros. Discovery re-aligned disparate systems, policies, and procedures into a best-in-class treasury organization, realizing an impressive list of improvements in productivity and cost savings over a rapid timeframe.

Navigating the Treasury Transformation: A Tale of Two Big Companies

Amy Lainge, Head of Global Treasury Operations for Warner Bros. Discovery, explained that in looking to transform their treasury operating model they selected Kyriba as the partner prior to the merger of Discovery and AT&T’s WarnerMedia. In fact, the merger was announced before beginning the Kyriba implementation, leaving them about seven months to implement the system before the merger completion date. With Actualize Consulting as their implementation partner, Discovery’s treasury was able to complete the Kyriba implementation ahead of the merger deadline.

Pre-merger, Discovery was already a large, complex media company with Discovery Channel, HGTV, Food Network, and Eurosport, which has the rights to air the Olympics in Europe. With WarnerMedia consisting of Warner Bros. Film Studios, HBO, CNN, and Turner, the merged company would become much larger and more complex.

Once the merger was completed, the next logical step would be to integrate the two companies, but Amy explained it was more complicated than that. Each business under AT&T’s WarnerMedia operated independently and consolidated results right up to the merger. Warner Bros. HBO, and Turner operated on a very decentralized model where each company had a separate treasury department, their own systems, and their own ERPs.

As a result, Discovery went from having about 300 bank accounts globally across 25 bank relationships and a single ERP instance pre-merger to over 2,000 bank accounts across 100 different banks and five different ERP systems post-merger.

On the TMS side, Discovery had the newly implemented Kyriba platform while WarnerMedia used a different TMS, apart from one company that managed cash with spreadsheets and bank portals.

Having successfully implemented Kyriba at Discovery, the new Warner Bros. Discovery was faced with an even more complex transformation project. One major problem was cash visibility. Amy highlighted that if the Treasurer asked how much cash they had, no one could not give him an answer because the essential data was spread over many disparate systems.

Cash visibility was clearly the top priority but just one of many goals. Warner Bros. Discovery management committed to $3.5 billion in cost cutting synergies over three years, so the treasury transformation was part of a larger analysis of people, processes, and technology to achieve efficiency gains.

Overcoming Roadblocks: Best Practices in Warner Bros. Discovery’s Treasury Transformation

Chad Wekelo, a Principal at Actualize Consulting and the lead for the implementation team, shared his view on what made the Discovery implementation successful.

Chad pointed out that the implementation of Kyriba at Discovery was successful because they took the time to carefully plan the project. Actualize Consulting has worked with a lot of companies and fully understands how poor planning leads to delays and re-work.

Some key planning steps the Discovery team used and repeated for the Warner Bros. Discovery implementation include:

• Define the objectives and desired future state
• Define the future technology landscape
• Identify the resources required to execute (most treasury groups are very lean)
• Have hard deadlines like expiring legacy TMS contract dates to achieve milestones in the project plan
• Seek alignment and buy-in from groups that will be impacted by the project by creating a steering committee for all senior leadership across the impacted organizations. Engage accounting, IT, Tax, Legal, and Procurement to take ownership of the parts of the project that involve them.
• Involve external vendors, especially banks at an early stage. Inform banks of your project well in advance so they can line up resources to support the project and not slow down the timeline.
• Be flexible. You might find as you implement there is a better way to structure a process or report.

Chad and Amy emphasize how critical planning and teamwork helped to ensure a smooth treasury transformation for Warner Bros. Discovery.

Unlocking Treasury’s Potential: Kyriba’s Single Platform is Key

Notably, Chad points out that Kyriba is the only system with one central database, bringing a huge benefit to the future state design. Because of the single platform, every process module within Kyriba is interconnected.

For example, Discovery centralized the data flow of bank statements into Kyriba’s cash module, but these statements can also be used in the cash accounting. Additionally, the cash forecast can be created in the system using data from the bank statements as one of the data sources. Financial transactions entering Kyriba also flow through to accounting, payments, and forecasting.

Corporates need to consider and use all the data created and stored within Kyriba and realize the benefits that can be derived through the interconnectivity.

Additionally, Amy noted Warner Bros. Discovery implemented Kyriba’s Advanced FX solution, which sources the balance sheet exposures from the ERP system, brings it into Kyriba, and also incorporates the company’s hedge policy. As a result, the system can tell them what needs to be hedged to be compliant with their policy, or conversely what needs to be unwound because you may have over-hedged in some areas.

This solution generates huge benefits on the trade execution side, while the hedge accounting capability reduces the time for the accounting team to do the mark-to-mark revaluations from several days to mere hours. The results are also fed to the ERP system to post the journal entries. In fact, Chad commented there were at least 14 integrations that were identified during project planning. The goal was to eliminate any manual intervention to pass data between systems such as ERPs, SWIFT Service Bureau, Bloomberg, FXall, etc.

Maximizing Efficiency: How Treasury Transformations Drive Value

Amy discussed some of the other efficiency gains achieved in addition to automated trade processing, hedge exposure identification, and effectiveness testing and accounting.

Before the Kyriba implementation, Discovery had its own SWIFT BIC and a SWIFT Service Bureau, but they were only using it for bank reporting. Now, Warner Bros. Discovery has 99% of their banks reporting through the service bureau and then into Kyriba. This connectivity is important for on-demand reporting of the amount of cash on hand by currency, bank, counterparty, etc. Using the bank account management module, the company can generate FBAR reporting because they can indicate which signatory is an FBAR signatory. They are now taking it even further by adding payment approvers in certain countries that need to report.

Creating a single cash position by region with one standardized process eliminated both the use of numerous tokens to access and download statements and the processing time to consolidate data, boosting productivity and supporting greater working capital efficiency. Warner Bros. Discovery was able to re-create the logic behind the tagging rules of their legacy system in Kyriba, which enabled tagging of the bank data into budget codes. Variance of actual to forecast was simplified by the tagging, reducing the time to perform variance analysis.

Interfacing Kyriba with the ERP system enabled journal automation and posting to the GL, eliminating manual posting and reconciliation in internal and external debt transactions. FX trades are now imported from their FXall trading platform as well as settlements.

While the project to integrate the newly formed Warner Bros. Discovery treasury teams was also expected to generate cost savings, it was the future state vision of an efficient and centralized treasury function that was the primary focus.

Pre-merger, Discovery had a team of five managing treasury operations and today there are about 20 team members–and that does not include FX and capital markets. But more importantly, the re-designed processes, eliminated redundancies, and efficiency gains have enabled Amy to focus on other needed services. For example, the merged company is very heavy in movie, TV, and news production, areas that need more attention and dedicated resources. Because of the efficiencies achieved through the treasury transformation, Amy was able to create a team dedicated to helping out those business lines.

Staying Ahead of the Curve: Positioned for Future Trends in Treasury

Driven by the commitment to achieve $3.5 billion in cost-cutting synergies and the necessity to connect over 2,000 bank accounts across 100 different banks and five different ERP systems, Warner Bros. Discovery embarked on a treasury transformation journey to unlock efficiency gains.

Warner Bros. Discovery’s remarkable treasury evolution leverages Kyriba’s single-platform system to centralize and automate the management of liquidity, payments, and risk, allowing the company to standardize processes globally and support its continued growth.

Careful planning, effective teamwork, and the Kyriba centralized platform resulted in tremendous gains in efficiency and visibility to create an integrated world-class treasury organization. Through this strategic consolidation of systems, processes, and resources, Warner Bros. Discovery is poised to maximize efficiency, streamline operations, and position itself for continued success.