When Hewlett Packard split into two companies in 2015, Hewlett Packard Enterprise, or HPE, emerged as the entity serving enterprise clients, focused on servers, storage, and networking. With approximately $27 billion in annual revenue, HPE specializes in providing solutions that enable customers to capture, analyze, and act upon data.
As a manufacturer with a global supply chain, HPE was heavily impacted by Covid-19. “At the same time we needed to support our suppliers amid the turbulent times of the pandemic, we wanted to improve returns on our short-term investments,” says Mike Seal, HPE’s treasury director, capital markets. Many suppliers were struggling to survive and were dealing with long payment terms from HPE. At the same time, the treasury group was looking for ways to earn higher returns on excess cash. That’s when they got serious about an automated early payment program.
“We did not have a history of paying suppliers early in exchange for a pricing discount,” Seal says. “We have more than 1,500 suppliers, and although we knew some companies have early pay programs, it was always considered too complex to do internally. The improved use of capital with higher returns motivated us to look further into various firms’ offerings, and we discovered that it would be achievable because we could automate most of the process.”