Despite the swirl of global macro-economic issues and the impending enforcement of new regulations, treasurers are keeping a close eye on their tactical operations. And they continue to advance projects to improve global visibility, standardization and automation. In this, treasurers are keeping in mind that the basics still matter, and as such, in 2013 they are making it a priority to reevaluate their global operational needs to increase efficiencies and automation of the day-to-day operations.
With the increase in global expansion comes the ever-present challenge of ensuring tactical processes are managed as efficiently and cost-effectively as possible. Strong treasury teams are experts in the basics of blocking and tackling of day-to-day treasury activities, and the mantra of “do more with less” continues to challenge treasury to evaluate processes for refinement and automation.
Standardization and automation will continue to be key objectives, with treasurers expecting faster, more accurate data on a real-time basis. Gone are the days of being able to take hours or days to compile global cash balances; treasurers will continue to demand real-time reporting.
A large number of NeuGroup members have engaged in system implementations during 2012, with many more scheduled to launch projects in 2013. The lack of expanded functionality and integration to an ERP system is seen as one of the biggest problems with existing TMS systems. The unfortunate outcome of some recent member implementations was “over-promise and under-deliver,” leaving them largely dissatisfied with system functionality.
RFP process is critical.
To avoid this outcome, members pointed to the RFP process; this is a critical step requiring a significant level of attention to detail (don’t make assumptions on even the most basic details), and time to identify the requirements thoroughly. One NeuGroup member, in emphasizing the RFP’s critical nature, pointed out that it is important to have one’s entire team sit down with the vendor to identify the current processes and how the new system will replicate it. It was also emphasized to not just duplicate current processes, but really take the time to identify the necessary process changes to make the new system functionality as close to best-in-class as possible.
Another important lesson learned is to ensure that a project owner is identified at the initial launch of the implementation so that there is ownership and accountability throughout. This individual should have the necessary authority and decision making power to be accountable for timeliness and overall project management.
Growing with the company’s needs.
Another key aspect to clarify is making sure the system will scale with the future needs of the company. Some NeuGroup members have experienced this problem first hand as their system’s technology was not able to handle requirements beyond the what was needed at the time of implementation. This problem can create substantial operating risk for treasury and can very quickly force treasury managers back into one-off manual processes. So make sure to implement a system that will grow with the company’s future needs rather than start over again with a new implementation two years down the road.
Best-of-breed gains most favored status.
Although the implementation of one global single instance is seen as the pinnacle for world-class treasury, many members believe the implementation of best-of-breed third-party software is a way to achieve world-class status without having to rely solely on in-house IT resources. Think of it as a side-door into world-class.
Many best-of-breed systems allow for easy integration with existing treasury management systems and are seen as a quicker way to gain tactical efficiencies without waiting for prioritization from internal IT.
Based on several NeuGroup member discussions and lessons learned from current implementations, IT support is critical to the success of a treasury management system. The support model can be more important to the success of system than the actual selection of a given tool, and as part of your treasury end-state vision, members should be realistic about what support model is sustainable going forward.
For many companies a dedicated treasury IT team may not be sustainable much past the initial launch of the system, so they will be inclined to turn to a Software-as-a-Service (SaaS) solution or a vendor that provides impeccable service, especially on the support side. SaaS continues to grow in popularity among NeuGroup members, with much of the benefit coming from lower IT costs, automatic system upgrades and integration of APIs (application programming interface) to existing treasury management systems.
One positive outcome of all the global turmoil over the past few years is that treasury teams have gotten the attention of senior leaders and have received the financial support necessary to implement better treasury systems and more robust policies and procedures that will serve them well into the future. It’s true that through challenge comes strength. Treasury teams have endured historic challenge and continue to fortify their foundations to be ready for the next storm.