Having invested heavily to create the infrastructure and services that have attracted a solid and substantial customer base Lycos is now focused on ensuring it breaks even by the end of 2002. As such the company is placing increased emphasis on controlling costs and improving its financial position wherever possible, and to support this has decided to centralize cash and account management as well as foreign exchange risk management for all its European operations through its Netherlands division.
Johan van der Werf, Accounting Director at Lycos-Europe , explains, "Following our IPO, and with our target of EBITDA(*) break even-by the end of 2002, we need to ensure that we are optimizing our financial resources as much as possible. This requires that we can analyze our overall cash and liquidity performance rather than review individual country snapshots. With only a small treasury function that required a solution that would standardize and automate our manual processes to increase our access to up-to-the-minute information and gain greater insight into, and overall control of our cash flow."
According to Dick Benninck, Interim Treasurer at Lycos one of the primary reasons Lycos selected XRT as the solution to streamline the groups Financial Value Chain is the breadth of the functional coverage of XRTâs solutions which offered the most comprehensive management of all aspects of Lycosâ treasury function - cash and liquidity management, Foreign Exchange risk, and bank relations. "The proven track record of XRT and its solutions was also very important : with Lycosâs strategic emphasis on maximizing revenue this year we are more insistent than ever that new technology we invest in delivers the tangible business benefits we seek." Benninck explains.
The solution deployed for Lycos offers a workspace with tools configured for a collaborative and international approach. "We are delighted to have Lycos as a customer, joining many other extended enterprises optimizing their Financial Value Chain with our technology " says Geert Deprez, General Manager XRT Benelux, "XRTâs international presence and experience enabled us to deliver a solution which caters to the needs of managing cash, treasury, foreign exposure risk and connection to the banks in several countries, all centralized from the Benelux".
When the system goes fully live the XRT solution will support a single person managing treasury for all Lycosâs 16 operating business units based in 10 European countries, with two staff members handling all inter-company accounting.
"Being able to centralize all European bank accounts will simplify our accounting processes, giving us a greater overview of our entire companyâs operating performance and substantially reducing our administrative costs. The XRT solution will also provide us with greater insight into our cash flow situation at any given time so that we can better optimize our cash resources and control our spending where appropriate." says Benninck.
Benninck to conclude : "With better control over our entire cash and accounting functions we believe we will be able to close our accounts a day to two days earlier than present, which means we will be working with more up-to-date data and minimize our risk exposure. All in all the XRT solution will ensure that we better control our financial resources so that we meet our strategic aim to be the most visited â and profitable - online destination in Europe."
(*) Earnings Before Interest, Tax, Depreciation and Amortization.