Générale de Santé chooses the software Allmybanks for its treasury management

Could you tell us about the Générale de Santé Group?
Générale de Santé is the leading European private health care group offering short, medium and long-term care and services.

The Group was established in 1987 and now numbers more than 180 private hospitals and clinics, accounting for 17% of French private hospital provision. Last year, we recorded a turnover of more than 2 billion euros. 85% of this figure is from state social security repayments and 10% from repayments made by mutual health insurances companies. The remainder of our turnover is derived from the non-refundable portion of care costs payable by the patient, and which essentially concern what one could call boarding costs.

How, in your view, do the nature of your business and your financing methods have an impact on the way in which your Group’s treasury is structured?
Our company, which is listed on the Euronext Paris, was the subject of an LBO [leveraged buy-out] in 2007 backed by a syndicated loan (divided as is usual into Senior, Mezzanine and PIK debt). Aside from the way in which it is inherently managed, this syndicated loan represents a significant restraint which obliges us to maintain a less than optimal distribution of our cash management transactions across the main banks in the pool (i.e. “side business” across eight banks).

The structure of our Group of clinics and hospitals is a subtle mix of centralised functions (purchasing, IT department, etc.) and functions which must necessarily remain at arm’s length because of the very nature of the health services business, which is strictly regulated by the authorities. Each institution therefore has its own director who is assisted by a chief financial officer and on occasions also a chief accounting officer, who are all authorised to manage the bank account. The property investment companies managing our clinics also have their own bank accounts that are managed centrally. In total, there are more than 350 accounts within the Group.

With regard to our cash management activity, our collections are made up of repayments from the Regional Illness Insurance Funds (transfers) and mutual health insurance bodies (by transfer or cheque sent by post) and direct payments made by patients (who can pay by bank card, cheque or electronically). For payments, we have a central purchasing office for the Group which manages the flow of money to our different providers.

We pay our providers by bank transfer via files generated by our ERP (a specific software package used in the health sector) and which need to be integrated into our central treasury platform.

Our capital-intensive model, which is similar to those of retirement home groups, leaves us restricted by the debt we must incur, meaning we are forced to make a judgement between the desire to own our own bricks and mortar (as well as the medical equipment they contain) and the choice to rent a property. This often entails accepting a position of significant debt that we have to try to optimise on a daily basis by closely managing our movable and immovable assets and their associated financial liabilities.

Why did you decide to change to a new treasury management application?
The project began two years ago, not long after I started as Director of Treasury and Financing at Générale de Santé. At that time, we were using the leading program on the French market in our central offices, with each health institution using its own system. These ranged from web banking portals to cash management applications operating via a modem. You can imagine how complicated everything was: management, payments, reporting, bank signing authorities, and so on. The absence of a consistent system meant we did not have a complete picture of cash flow within the Group (encoding problems, a single classification system, etc.)

It was also very costly to operate in this way because the clinics were paying for multiple contracts (banking portals, ETEBAC, etc.) and because of the investment needed to update the software used by the holding companies.

In addition, there was no guarantee that our tools would continue to be compatible with later developments in standards such as SEPA and EBICS, etc. In our central offices, migrating the software struck me as being very expensive because the solution proposed was not particularly innovative.

To sum up, we needed to give ourselves a modern tool which would allow us all to work on the same basis (with complete traceability of actions), thereby removing duplication of effort.

Why did you choose a SaaS mode?
The SaaS mode allows the different health institutions to integrate their transactions into a single tool. This guarantees the reliability of information, with the entire Group viewing the same information in real time (filters are obviously applied according to user rights). As the Group’s treasurer, I therefore have a better understanding of our business transactions, which is vital, especially when it comes to renegotiating the terms of our banking.

Why did you choose Allmybanks, the SaaS treasury management software from Exalog?
First of all, Allmybanks is indeed available as SaaS, which was top of our selection criteria.

Second came the pricing structure of the offer. Other publishers of similar software charge a fee per user. Since our project would involve a high number of users (around 4 or 5 per institution) we could not contemplate selecting one of these kinds of proposals. With Allmybanks, the cost of implementation is zero, and Exalog is the only provider that takes this approach. This is a considerable advantage for organisations which must remain partially decentralised, as in our case.

The final deciding criteria was Exalog’s proactive approach with regard to product development. The community of Allmybanks users is involved in developing the software, and innovation is a shared process. And so the lease management module requested by us can now be used by all of the Allmybanks users, at no extra cost.

I should add that, given the dilemma we faced regarding migration to SEPA, choosing a publisher that was able to integrate all elements of the payment chain, as well as banking connectivity, was also a decisive factor.

How did the roll-out of the Allmybanks software go across the Générale de Santé Group?
First of all, Exalog helped us to test the connectivity aspects with our banks. Afterwards, we set up the treasury configurations and integrated our holding companies and property investment companies. We were very quickly able to switch over the other bodies, since the configurations already entered centrally were shared by all of the Group’s entities. This is another advantage of SaaS.

The migration of the hospitals’ payment systems is being carried out simultaneously with their migration to SEPA. We are integrating them onto the Allmybanks platform at a rate of five establishments a month, and intend to increase this pace.

How could you sum up your experiences after two years?
The results have been very positive. Rolling out the program was quick and easy. Today we have a tool that gives us much more information than we had before,

that we are using both in the holding companies and the hospitals and clinics. As the Group’s treasurer, I now have a clear picture of who does what, I have complete traceability of actions and control of set-up, in particular with regard to the security aspects (access and order validation).

Within each entity, we have reports and detailed analytical documents presenting income and expenditure, movable and immovable asset financing, bank signing authorities, etc.

Finally, we are able to search the payments made to all of our banks directly on the internet, without needing to worry about which computer we are using to connect to the software.

What are the next steps for Générale de Santé in the way it uses Allmybanks?
We are currently completing the final features for managing commercial leases (e.g. rental 3/6/9) which may become part of our financial debts reported under the IFRS (international financial reporting standards) by 2012.

Another area of work is the implementation of a payment factory, which will make a significant contribution to our cost efficiency. Within the holding company, this will allow us to reallocate transactions to one or other of our banks with a view to reducing costs.

For this next phase in our development, we will, as ever, place our trust in Exalog and its collaborative form of innovation.