21 September 2016

SIRIUS Group consolidates its banking relationships and leverages HSBC strengths for global growth

Conventional wisdom might imply that growth is naturally equated with “more.”

But in a series of moves that began with a consolidation of its banking relationships, Montreal-based SIRIUS Group accelerated its international growth and established newfound levels of operational excellence.

Established in 1999, SIRIUS Group is a global leader in comprehensive project management consulting, training and software solutions. While the firm's clients are a diverse collection of private and public developers and engineering firms, many of them engaged in major projects - from road construction to shipbuilding - SIRIUS Group's niche specialties include project management products and services for the computing, telecom and health sectors.

SIRIUS Group president Benoît Godbout says a pursuit of global excellence has been core to the firm's mission since its inception. Through organic growth and a series of strategic acquisitions, SIRIUS has risen to now encompass seven divisions with 200 employees in Canada and Europe.

Confronting its Growing Pains

Despite its strong ascent, Godbout says several years ago it became apparent that the firm's four different banks, including two in France, were challenged to satisfy the company's growing need for fully integrated management and finance solutions.

For example, at the time, the firm lacked multi-currency accounts, which made transactions complicated and inefficient.

Further, Godbout says SIRIUS had to manage its divisions in a way that would satisfy its former Canadian banker's reporting requirements. Ironically this meant the Canadian bank lacked visibility into SIRIUS Group's European accounts. As a result, when it came to serving SIRIUS's finance needs the Canadian bank wouldn't recognize the firm's overseas revenue and balance sheet, which at the time reflected about 50 per cent of SIRIUS Group's global business. It was an epic conundrum.

"Our Canadian banker couldn't see the whole picture," says Godbout, noting that the firm's growth and multi-currency transactions actually worried the bank. "The bank did not have access to (our) credit guarantees abroad, and we were judged as being too risky and growing too fast."

The gravity of the situation grew.

With bank transfers between divisions taking 48 hours to five days to complete, the firm's ability to fund its various operational needs was hobbled. "Our performance was starting to be impacted, particularly our operations in France… a stifling situation for any business operating internationally," says Godbout.

Teamwork

Facing these troubling impediments, Godbout and his management team took action by seeking a new banking partner - one with the international experience and connections capable of satisfying the firm's global banking needs.

After meeting with HSBC, Godbout authorized the bank to bring forward a proposal based on an evaluation of the company's financial health and global cash management requirements.

Godbout liked what he saw in HSBC's proposed strategy: a unified approach that would enable SIRIUS to bring its international banking under one roof, improve the firm's financial management across its divisions and accelerate its growth.

Godbout instructed HSBC to begin the consolidation, which occurred in two stages. First, HSBC accounts and credit solutions were set up in Canada. "This was a straightforward process and took a little under three months to complete," says Godbout.

HSBC then assumed management of SIRIUS's bank accounts in Europe.

By tapping into HSBCnet, an online banking platform, SIRIUS gained the ability to monitor and manage its international accounts and cash management requirements in real-time, with the option of linking bank accounts held outside of HSBC to its HSBCnet profile. Today, authorized users at SIRIUS process daily transactions using HSBCnet's customized reporting and reconciliation features, with the firm's Montreal-based VP Finance overseeing all activities through this portal.

With its banking harmonized, Godbout implemented HSBC financial solutions enhancing SIRIUS's access to working capital and ability to invest in its growing business.

A nagging part of SIRIUS's working capital challenge remained rooted in the lag time between the firm's accounts receivable (AR) and accounts payable (AP) cycles, and their related payment terms, which ranged from 45 to 60 days in Quebec and up to 120 days in Europe.

To help address this hurdle, Godbout took advantage of HSBC's receivables finance solution, which enabled SIRIUS to quickly and cost-effectively turn its receivables into cash.

"HSBC was like a breath of fresh air. They encouraged us to continue growing and supported us in every country [where SIRIUS does business in]. The cash flow was no problem. The guarantees were there and the risks controlled."

Beyond the benefits of these and other banking solutions, however, Godbout says the firm's deepening partnership with its new global banker helped the firm rise to an entirely new echelon of international operating efficiency and sophistication.

Entering the big leagues

"What surprised me most was HSBC's level of business acumen, its ability to propose viable business solutions - advice you don't typically expect to receive from bankers," says Godbout. "They are more than bankers; they act as consultants on every financial decision and its implications."

Noting that SIRIUS Group's strengths have always included "a management team that's been very open, with a capacity for change and to move quickly" Godbout sensed an opportunity for SIRIUS to step up its game in order to fully benefit from this new relationship with HSBC.

For example, while he says SIRIUS always had "good control" of its finances, and previously produced quarterly reports for its former bankers, HSBC expected monthly reporting and standardized governance practices across the firm's business units. "With our former banker, things were not as rigorous."

SIRIUS rose to the occasion.

"It took us four to five months to standardize our reporting methods across all the divisions. We are so much more in control now," says Godbout, noting, "We can absorb more growth, because we are following our financial health more closely than we had ever done before."

SIRIUS also tapped HSBC's on-the-ground connections in [HSBC] France, who provide SIRIUS with business intelligence into European industry trends and advice on foreign exchange and working capital optimization with a focus on global trade and receivables, payments and cash management.

Today, SIRIUS deals with a dedicated HSBC International Relationship Manager (IRM), a single point of contact who fully understands SIRIUS Group's business and connects the company to HSBC global services.

"With the previous banker, we met resistance; we were the ones trying to find trade solutions. With HSBC we feel a true sense of partnership. Every time we present HSBC with a challenge, they proactively seek solutions with our best interests in mind. We wouldn't be able to continue our growth without them," says Godbout.

If you are interested in learning how your company can expand internationally, contact one of our Relationship Managers today.

We can absorb more growth, because we are following our financial health more closely than we had ever done before

Benoît Godbout, SIRIUS Group President

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