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Treasury Technology

ERP Specialist Broadens Its Horizons

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July 27, 2018

By John Hintze

Rebranded as Serrala Services, e5 sees the cloud opening up options for treasury. 

Corporate treasury departments' relationship with technology is a complicated one. Automating repetitive tasks has been a long-time goal, but treasury—as a relatively small cost center—tends not to be the top priority in terms of corporate IT spend, and full-blown treasury management systems (TMSs) typically take upwards of 18 months to implement.

Members of the NeuGroup's Assistant Treasurers' Leadership Group (ATLG), exchanging woes about vendors and other tech-related issues at their May meeting, discovered that at least a handful of them have used Serrala Services US, formerly e5 Solutions Group, as implementation consultants. Given Serrala's apparent penetration of Fortune 1000 finance departments, iTreasurer sought the firm's insights about treasury-related technology trends.

A STRING OF ACQUISITIONS

The company focused on implementing SAP's enterprise resource planning (ERP) and other software until May 2017, when it became one in a string of acquisitions made by Hanse Orga Group over the last year to broaden the Paderborn, Germany-based fintech firm's offerings.

Dolphin Enterprise Solutions, for example, was also acquired in May 2017 and added accounts payable and accounts receivable optimization software to its menu of products, while e5 brought software add-ons enabling and augmenting SAP's standard treasury functionality. In June 2018, Hanse Orga rebranded as Serrala.

Blaise Scioli, vice president of finance treasury services at Serrala Services US, noted that consultants installing non-ERP, finance-related software have typically taken a part-time, coaching approach to getting the application up and running, whereas ERP consultants have tended to engage full-time in the implementation.

"Some of treasury executives' frustrations may stem from vendors failing to put the appropriate implementation methodology in place," Mr. Scioli said. "We get comfortable with what we do, rather than evaluating each situation separately."

A CUSTOMIZED APPROACH

Mr. Scioli said Serrala has sought to fit its services to the job at hand, which may explain AT30 members' expressed satisfaction with its services. In any case, Serrala has expanded its SAP consulting and add-on services beyond SAP to competitors such as Oracle, focusing on ERP-neutral products and integrating them into clients' systems.

"Oftentimes when we talk about executives being satisfied or dissatisfied with their implementation experiences, it comes down less to the components they've chosen than how they are fixed together, both in tech and business-process terms," Mr. Scioli said.

He said that a significant development is corporations' ability today to integrate software focusing on specific areas. In the past, vendors may have dismissed third-party foreign-exchange (FX) portals such as FXall and 360T, and instead hoisted the flag for the client's ERP provider and its FX solution, even if the third party's application was a fraction of the cost.

"That mentality appears to have changed. Now, it's whatever makes the most sense for you from a function and cost perspective," Mr. Scioli said, adding, "There's obviously a tech base that has to be satisfied, but once you've picked it, the focus is on integration."

Enabling that change, Mr. Scioli said, has been the advent of the cloud. A few years ago, corporations may have been wary about the security of their data in the cloud, but they've since realized that security is a key element of cloud providers' offerings, backed up by SAS-type inspections, relying on the fact that retaining data in cloud servers is at least as secure as retaining data in-house.

"Some of treasury executives' frustrations may stem from vendors failing to put the appropriate implementation methodology in place." But the new company "gets comfortable with what [it does], rather than evaluating each situation separately." 

Now they truly can meet their clients specific needs with best-of-breed technology, he said. This move to best-of-breed solutions in the cloud is now possible either because the specialty-software firm is already working with the company's ERP provider, or because a company's two vendors can work together to integrate their cloud-based applications.

COST-EFFECTIVE, EASY TO UPGRADE

In addition to security, cloud offerings tend to be more cost- effective. Upgrades across ERP systems every year or two tend to swallow up enormous blocks of client time and energy, while the cloud enables upgrades to be segmented.

"So if you're using an FX trading application or some other specialty software, it can be upgraded in a very neat, segmented and compartmentalized way, rather than being part of a massive system upgrade," Mr. Scioli said.

Another big cloud-based trend witnessed by Serrala is the increasing popularity of managed services, in which a vendor takes over the operational aspects of a corporate function. Mr. Scioli said companies such as Xerox have provided such end-to-end services on a finance-wide basis, but he sees a need for such services focusing on treasury.

"A June survey found that 135 respondents on average spend more than $250,000 a year on bank services and maintain millions of dollars of deposits." 

In terms of payments, he said, Serrala provides a managed service for format conversion and bank communication, enabling clients to more easily switch banks. The service is based on a service level agreement, providing cost and efficiency and charging a transparent, fixed fee per bank account. He added that several clients are already using its remittance advice handling service, which captures, interprets and routes clients' incoming remittances to their ERP systems.

"This strongly supports the client's cash application process; they no longer have to set up separate servers to handle this processing in the cloud. The setup and maintenance of templates, as well as the monitoring, is done by the Serrala team," Mr. Scioli said.

Another example of a cloud-based managed service is the NDepth bank-fee analysis solution, launched by Treasury Strategies, a Novantas company, a year or so ago. In a June survey, Treasury Strategies found that 135 respondents on average spend more than $250,000 a year on bank services and maintain millions of dollars of deposits.

"Yet only 25% use automated tools to manage their bank fees and only 21% use external benchmarks," noted Treasury Strategies in a survey analysis. "Although these numbers are much higher than in previous years, they still have a long way to go.

Fraud management and account analysis, where the service provider digests often cryptic bank reports and provides treasury with an easily legible, standard set of reports are other areas ripe for managed services, Mr. Scioli said.

"This kind of support has traditionally been the domain of the Big Four [accounting firms]. Now specialist providers can step in and provide treasury support—an area customers frequently complain about in terms of the level of support they receive," Mr. Scioli said.

Right now, "corporate treasury departments are like a kid in a candy store", as they find lots of new ways to leverage the cloud to improve cash visibility throughout the organization, he said.

Who is Who in the Cloud

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