By Hilary Kabak
This is the second in a series of TMS profiles focusing on NeuGroup-member experiences with alternatives to the Big Two.
Although treasury has assumed a more strategic role in business, they still have their other duties. This is where technology vendors stepped in to help treasurers meet the challenge of doing more with less. One company at the forefront of this trend is treasury and risk management solutions provider Reval, which has sought to be the go-to all-in-one software-as-a-service (SaaS) system to help treasurers manage their increasingly busy worlds.
Justin Brimfield, Reval’s executive VP of corporate strategy, noted the company’s appeal to cost-conscious and pragmatist treasurers as installed models and non-connected systems fell out of favor.
Based largely around client demand, Reval has grown through the financial crisis focusing on risk management and, in 2011, rolling out a global suite that included cash, treasury, risk, payments and accounting management. Reval has historically spent over 30 percent of its revenue on research and development, and does two major upgrades per year.
The service component of the business is critical, says Mr. Brimfield, noting that the driving questions for Reval’s continued growth are: “How can we improve the user experience?” and “How can we allow treasury to add strategic values?” Mr. Brimfield also emphasizes that the business model “really comes down to the partnership that we have with our clients,” a sentiment echoed by NeuGroup members who are Reval clients.
But can one system do it all? Here is a sample of NeuGroup user feedback addressing this question.
the Basics
Reval has 575 clients in over 25 countries, representing all industries and company sizes. The company was ranked the 303rd-fastest-growing company in North America on Deloitte’s 2013 Technology Fast 500, and recently announced a new STP community partner with Atlas. It was voted best in class in Client Services, Risk Management and Hedge Accounting at the 2013 annual Treasury Management International (TMI) Innovation and Excellence Awards.
Reval’s key features include:
- Cash and liquidity management.
- The ability to manage, track, value, stress-test, and account for entire trading portfolios in one centralized location.
- Identifying and quantifying exposures for hedging and risk decisions.
- Managing hedge strategies.
- The ability to maintain regulatory compliance (internal and external).
- Automatic updating of integrated market data.
- Integration of bank connectivity.
- Visibility and reporting capabilities.
The company highlights the benefits of being in a single-version SaaS system, where users only need a web browser to access the platform. Reval integrates with all ERP systems and is a certified SAP partner, and there is no need to install anything on individual computers.
Is this TMS right for you?
We asked NeuGroup members from our Foreign Exchange Manager’s Peer Group and Treasurers’ Group of Thirty-2 about their experience with Reval.
- What do you use it for? One member of The NeuGroup’s FX Managers’ Peer Group (FXMPG) uses Reval for derivative accounting and to conduct CFaR analysis, developing a new transaction exposure forecast each quarter. Reval generates different market scenarios based on different timelines. It also generates optimization analyses to find opportunities to adjust hedge policies and reduce CFaR. Another FXMPG member noted the hedge accounting tool and ability to customize forward curves.
One member of The NeuGroup’s Treasurers’ Group of Thirty-2 (T30-2) uses Reval for IR, FX and commodity hedging, as well as cash management, while another recently implemented the system for intercompany loan management, IR hedging, journal entries, FAS 133 and long-haul accounting.
- What’s good? As with any system, it’s as good as its ability to accomplish its tasks, which it does for our FXMPG member: “We like the ability of Reval to generate the analysis we need.” He cites its usefulness in understanding total portfolio behavior over various time periods and the physicals that drive diversification and the effects of the hedge program. He also notes the willingness of Reval’s development team to customize the product, which is a boon to any user familiar with excessively rigid technology. Several NeuGroup members cited Reval’s customer service strengths, with one T30-2 member saying that the value added with Reval is that “their customer service team is on things right away, and you are high priority.” This experience is aided by an overall user-friendly and customizable user interface. Additionally, because Reval employs treasury experts, they understand the problems treasury professionals need to solve.
- What’s bad? Our T30-2 user noted that if you don’t use it regularly, it can be difficult to navigate. User-friendly does not equal totally intuitive. And despite the usefulness of the analyses, our FXMPG user said that “the process to load the data necessary to conduct the analysis is not trivial.” Exposures and hedge policies need to be loaded and simulations generated prior to running reports, and the ability to conduct extensive back-testing and real-time monitoring needs to be developed. One FXMPG2 member also cited the less user-friendly nature of FIRST, and difficulties with customization. She cited both pushback from the Reval team when requesting something they don’t normally offer, and then the cost of getting it.
- How is the setup? Most aspects of set-up were “seamless” for our T30-2 member, but the cash forecasting piece was “too scientific about how it works” on its own as opposed to centering on what her team ultimately needed. As a result, this piece has been slow to resolve, and the overall process was over budget. Being able to use Reval’s own team for set-up is helpful, although the in-house team still needs to take ownership of the process to ensure that the system suits the company’s needs.
Reval provides a user guide at the end of implementation, but it can be overwhelming, so she emphasized: “Only your team will know what they really need to perform their jobs every day and there should be very clear and accessible playbooks for those key items.” This means your team has to be “diligent about active participation in implementation,” including getting short cut notes to make the best use of the system.
Setting up CFaR analysis from scratch with Reval is described as not much different from the usual quarterly process, including loading exposures and defining optimal hedge policies. While there is “some learning required” to understand how to do this and how to run the reports, this is true for every system. Our FXMPG member also noted that learning how to operate and maintain the tools requires “serious engagement.” This seems to be par for the (TMS) course.
Both members praised the personalized customer service in set-up.
- What about pricing? Reval’s pricing structure is value-based, focusing on the complexity of usage, number of users and volume of flow. Mr. Brimfield noted the difference in companies of $200M as opposed to companies of $80B, and the difference in volume associated with the two. According to NeuGroup users, it is more expensive than some other options, but doesn’t have the highest price tag. Some members noted that the adding on of transactions can get pricey, but most agree that overspend is to be expected with any system. One T30-2 member noted that when there was a significant price over-run in implementation, she had a very helpful conversation with the CEO, who ended up comping the difference.
- Why is this the right system for you? For our user from FXMPG, already having the relationship with Reval for derivative accounting meant a relatively straightforward initial set-up for CFaR analysis. He also cites the willingness of Reval’s development team to “modify and expand the CFaR analytical capability to support our needs,” which is a theme echoed by Reval’s employees. Several NeuGroup members noted the breadth of Reval’s capabilities and the relative ease of expanding from one to the other. One T30-2 member in the midst of looking for new systems noted that his financial risk team is in favor of Reval for its accounting capabilities. Another said Reval was the right choice for her team because it has potential to become the one-stop shop for all treasury-related management tools.
Assessing the feedback
Members are satisfied with Reval, and there is no doubt that they are at the top of the customer service ladder. Reval offers extensive treasury and cash management capabilities, and once one is established, it is safe to expect satisfaction from the next. Along with the customer service emphasis goes the customizability of the product, but as with most technology solutions, it helps to start with your own resources.
As our FXMPG user noted, “You will need to dedicate some resources to take advantage of what Reval offers.” Reval is a tool; it does not do the analysis for you. Overall, if your team is willing to put in some effort to set up the product, there is a high probability of satisfaction.