How Takeda centralized its payments

To standardize banking connectivity worldwide, record all financial instruments and increase cash visibility, Takeda implemented Kyriba Treasury as its TMS back in 2019. Subsequent to this initial implementation, a second phase of the project – to implement the Payments module of the TMS – was embarked upon in 2022. For this, Takeda enlisted the help of Zanders.

Takeda has a long history, dating back to 1781 when its founder Chobei Takeda I began selling traditional Japanese and Chinese herbal medicines in Osaka’s medicine district, Doshomachi. He quickly gained a reputation for business integrity and quality products and services, values that have continued through the years and are now integral to Takeda’s corporate philosophy.

Today, Takeda is a patient-focused, values-driven biopharmaceutical company committed to improving the lives of patients worldwide. The company has six key product areas: Oncology, Rare diseases, Neuroscience, Gastroenterology, Plasma-derived therapies, and Vaccines. With approximately 48,000 employees across 80 different countries, Takeda operates in Japan, the USA, Europe & Canada (EUCAN), and Growth and Emerging Markets (GEM). These four regions are responsible for providing access to Takeda’s entire portfolio in the countries where it operates. In terms of revenue split, half of the revenue comes from the US market, 21% from EUCAN, 18% from Japan, and 12% from GEM.

“Our company is values-based,” explains Fiona Foley, VP and Assistant Treasurer, Treasury Operations at Takeda. “We are guided by the principles of what we call Takeda-ism, which incorporates four tenets: integrity, fairness, honesty, and perseverance. These values are brought to life through our actions which are based on patient, trust, reputation, and business – in that order.”

The project was a combination of various specialties, including treasury, IT, languages, and process and cultural alignment.

Fiona Foley, VP and Assistant Treasurer

Challenge

Integrating treasuries

In January 2019, Takeda acquired Shire PLC, a UK-founded and Irish-based pharmaceutical company specializing in rare diseases. With the earlier acquisition of Swiss pharmaceutical company Nycomed in 2011, Takeda now has three treasury centers located in Tokyo, Zurich, and Dublin.

Foley explains that they have a three-pillar treasury approach. “The first pillar is the Treasury Operations team which looks after all the day-to-day cash management, intercompany liquidity, pooling, cash centralization, and cash forecasting. The Financial Risk management pillar is responsible for all financial risks, such as FX, interest rate, credit and counterparty risks, and also manages trade finance and bank guarantees. Finally, the Capital Markets pillar is responsible for new sources of funding and managing the company’s significant debt portfolio.”

Before the merger, Takeda and Shire were very different companies in terms of operational culture and functional structures. Foley notes that both companies had different degrees of centralization. “Shire was much more centralized in terms of its Treasury, while Takeda was more decentralized. As a combined company there were many fragmented and non-integrated data sources for treasury, particularly in the areas of bank accounts and cash visibility, leading to poor forecast accuracy. Furthermore, there were numerous banking connectivity routes, different electronic banking systems, and a large number of applications.”

Neither company used a TMS for day-to-day cash management, and the TMS systems that were in place hadn’t been updated in quite some time and were only used for recording a specific set of financial instruments. The newly formed treasury team recognized the need to address these issues and began preparing a request for proposal (RFP) for a new TMS. Foley: “We wanted to move away from an overreliance on Excel for cash positioning, forecasting and reporting which exposed us to the risk of input error and manipulation of data by different users.”

Given the company’s size and the complexity of the challenges they were facing, they needed a TMS that was adaptable, met their requirements, and future-proofed them for integrated activity. As a result, Takeda implemented Kyriba Treasury, including the Payments module, to standardize banking connectivity globally, increase cash visibility, and centralize its payments. Zanders was asked to help with the Payments implementation which followed after all other modules.

Solution

Creating visibility

Takeda’s implementation of Kyriba Treasury was done in a modular manner, with the first phase focusing on banking and cash management to create visibility. Kyriba was able to gather bank statements, enabling the company to manage their cash on a day-to-day basis. The subsequent modules involved integrating investments, risk management (FX, interest rate and counterparty risk), and managing debt portfolio and capital market activity. Payments settlement was not included in the initial implementation scope.

To address this as part of a second project phase, Takeda moved into the lifecycle of the Payments module, explains Meliosa O’Byrne, Associate Director Treasury Operations at Takeda. “We recognized the need to standardize and harmonize payments for all the banks. We faced challenges due to the lack of connectivity and the absence of a standard approval process in place. To address these issues, we decided to use Kyriba and organized a workshop with the Zanders team to gain better understanding. This was followed by a phased approach to implement the Payments module with seven key global core cash management banks.”

Specific challenges per phase

The first phase started with Deutsche Bank – the primary bank in Europe – as pilot. The focus was to understand the Payment module in Kyriba, processes, and flows. O’Byrne: “A key decision factor to start with Deutsche bank was that our hedging program was migrating to our Treasury entity in Zurich and the volume of payments to support this being the most significant Treasury flows each month.”

Phase two involved Citibank, which covered all Takeda regions (EUCAN, Japan, USA) and Sumitomo Mitsui Banking Corporation (SMBC) which was Japan-centric. During this phase, training sessions were provided by Zanders in local language for the Japanese users, which was key element to the success of the project. The EUCAN team was already trained during phase one.

O’Byrne explains: “We started from Europe and then engaged Japan team for phase two. They were working with our back office team to make sure we continued the standardization and harmonization approach identified for Deutsche Bank. SMBC is one of the main banks for Japan and Zanders’ Katsuo Sekikawa became part of the team that managed the implementation from Japan.”

Keisuke Suzuki, Lead Treasury Solutions of Takeda Japan: “With Katsuo Sekikawa, Zanders offered solid practical experience in the banking sector in Japan and knowledge of the Kyriba system – a great contribution with respect to the Japanese banks going live with Kyriba Payments.”

With the implementation of Kyriba, Takeda was able to fully automate the process of treasury payments, explains Suzuki: “This allowed us to have improved treasury payment automation. The centralized data provided by Kyriba enabled us to easily track our transactions, which was particularly important due to our significant amount of external debt, bonds, derivative and ICO contracts.”

We faced challenges due to the lack of connectivity and the absence of a standard approval process in place.

Meliosa O'Byrne, Associate Director Treasury Operations

Performance

Successfully live

During the user acceptance testing (UAT) and penny testing for Citi and SMBC, phase three was initiated in the background, specifically for the remaining four banks – Mizuho Bank and MUFG (both for Japan), Nordea (Europe) and JP Morgan (USA). Each bank encountered its own challenges in terms of time perspective, but all followed the agreed-upon eight-stage process with Kyriba and Zanders.

O’Byrne: “Upon completion of each phase, there was a hypercare period of five days after going live, which was supported by Zanders. By the end of September, all phases were successfully live, with a few minor bumps along the way. All stakeholders were extremely happy with the results.”

The comfortable and confident relationships built between Zanders and the various teams in Europe and Japan were an important foundation for the success of the project, according to Foley: “With three project phases focusing on different parts of the world, the project was a combination of various specialties, including treasury, IT, languages, and process and cultural alignment. Working with multiple internal and external stakeholders, and different banking partners, made the project complex. Despite the challenges posed by different time zones, the project was successfully completed in the timeframe agreed at the outset.”

Takeda now has a bank-agnostic approach to deliver the benefits of automated payments workflow while addressing local operating requirements. Foley: “The standardization and alignment of processes from all regions has been tremendous with respect to the overall Takeda approach. Kyriba allows for fully integrated payment systems, enabling Takeda to make large transactions with the security of robust system support. This allows us to turn all our attention to our day-to-day cash & liquidity planning to ensure that funds are in the right place at the right time and all risks are properly hedged.”