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Treasury Technology

Automation or Digitalization, Efficiency is Key

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July 19, 2018

Improving the treasury operation is the goal no matter the means to get there

Distributed ledgerWhen it comes to technology, whether it’s automation or digitalization, practitioners are focused on ways to improve treasury efficiency, controls, process flows, and how they can help to scale the business. In the automation space, this is happening via improving ERP performance while for digitalization, finance departments are looking to apply robotic process automation, or RPA, to basic tasks so that an already lean treasury can focus on its core responsibilities.

At a recent European Treasurers’ Peer Group meeting, members discussed both issues, debating the pros and cons as well as the pitfalls.

In one systems discussions, members heard how across NeuGroup’s network, treasurers were looking to remove technology add-ons to the extent possible, and leverage improvements to their ERP instead.

For example, significant enhancements by SAP have helped SAP S/4HANA make inroads with member companies, including several implementations. NeuGroup has heard about companies abandoning their treasury management systems (TMS) in favor of using a combination of SAP and visualization tools to upgrade their analytics. Going with the ERP’s treasury module is also the path of least resistance for treasuries without dedicated IT resources.

Meanwhile, RPA, the hot trend for 2018 and beyond, holds a lot of promise. As most everyone is learning, RPA automates manual activities with software that can mimic human actions and perform common, repetitive tasks such as queries, cutting and pasting, and merging data. If it’s to be used, however, thoroughly analyze the process to make sure it’s as streamlined and scalable as possible before putting robotics to work. A bad process is still a liability, automated or not.

A member shared her experience of piloting an RPA project using a free demo version of an RPA software license, operated on a dedicated computer, for some manual tasks, including retrieving data from three system sources, combining the data, doing simple calculations, then creating reports for distribution to an internal audience. While she was pleased with the outcome, this led to warnings against using RPA as a Band-Aid and a discussion of how to avoid it. The idea was that while RPA is significantly cheaper than methods of automation involving the integration of multiple systems, cost savings should not lead managers to having robots perform a human process that is flawed. Instead, consider first whether the process needs fixing.

The decision to use RPA, some suggested, should come after an analysis of its cost compared to the price of system integrations for multiple business applications, taking into account the volume of transactions involved, speed of execution, short term goals and long-term objectives regarding business systems.

Technology is the cornerstone of providing scalability to best support business in the long run. Technology deployment needs to be strategically managed in treasury to ensure an optimal outcome. The decision whether to find IT technical skills within treasury (or a dedicated treasury-IT team) or to rely on the flexibility and expertise of external consultants will differ from company to company, depending on the management philosophy regarding skills acquisition.

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