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Software & Systems

TMS: Fixing What Isn’t Broken Sometimes Needed

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August 17, 2017

One company decides to overhaul its systems and head to the cloud and better ready itself for the future.

financial system softwareIt is not that common for companies to undertake a big upgrade on a systems infrastructure that is already working relatively well but sometimes being proactive is necessary. One company that went through such a situation recently related that experience to fellow members of the NeuGroup’s European Treasury Peer Group.

Thinking ahead, the company wanted completely new bank connectivity and treasury management system and chose to go with a cloud-based connectivity setup that would serve them well into the future. The member walked through some of the background and considerations for system and configuration choices, implementation scope and challenges, and what the “end state” will look like.

One key takeaway was that treasury realized that the company’s global footprint was what drove treasury complexity. This company has a presence in more than 100 countries, manufactures in several dozen factories in about 20 countries and has more than 25,000 employees worldwide. The top three markets for the €5 billion-plus turnover company are the USA, Germany and China. By region, sales are widespread: Western and Eastern Europe to North America, from Latin America to Asia and Africa. This means treasury has a global remit in which some countries and regions are very complex and time-consuming but account for a relatively small proportion of total sales.

So why fix what wasn’t broken? The company’s in-house bank fully or partially covers most of its large markets in Europe, North America and Asia-Pac, including China. Regional pooling is done in North America and Europe while it’s domestic-only in China and India. The old/current setup, using SAP BCM (bank connectivity manager), a service bureau and SWIFT, was on-premise and working well: the in-house bank and POBO (pay on behalf of) had been successful and brought significant process improvements, but had only three core banks connected to it.

However, the company wants to optimize payment processes even further to include “payments in name of” (PINO) and automate bank-statement downloads and reconciliations. The company also wanted to migrate all 20 legacy ERP systems onto a single platform, which in itself is a monumental task, and migrating the SAP BCM/SWIFT setup and adding more banks and countries will require extensive specialist IT resources.

To the cloud, everyone! The question was how to connect the rest of the company’s banks quickly and efficiently. With IT resources scarce and the task gargantuan, the company needed to consider alternatives. It settled on TIS (Treasury Intelligence Solutions), an SAP spin-off and dedicated SaaS-based SAP plug-in that connects to the cloud using SAP standards. This means no formatting challenges would be added to the migration. Benefits from cloud solutions include: complexity reduction; efficiency (cost & time); flexibility; and scalability. The cloud-based TIS allowed the company to outsource time-consuming tasks and benefit from security developments and upgrades in real time, as well as the ease of adding units and banks, and more.

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