By Anne Friberg
A look at how technology can make treasurers more strategic.
Recent discussions with The NeuGroup for MNC regional treasurers in Europe (the EUROTPG) and meeting sponsor Reval focused on trends in treasury technology and talent. Two themes were validated: the way forward is to enable treasury’s rise to a strategic level with technology, and motivate skilled talent with proper tools, development and variety.
Treasury has more and more on its plate but is squeezed on resources to take it all on. With the need to divert precious time to comply with new regulatory requirements, primarily in documentation and reporting for Dodd-Frank and EMIR in addition to already existing hedge accounting processes, there is less to spread around for the “real job.” Enabling technology is the answer, but corporate IT departments are not necessarily standing by to support treasury’s choice of “best of breed” solutions.
Some have IT (but the Have-Nots Resist Owning Their Tools). In The NeuGroup universe, there are two camps when it comes to IT support for treasury: you have your own treasury-dedicated support group or you don’t. The lucky few with in-house dedicated IT resources have developed and continue to get support for customized tools that function well for payment factories and exposure forecasts, for example.
Members of the other camp – the ones who have to queue up their projects along with all the other corporate IT priorities – are increasingly pressured to maximize one company-wide ERP’s capabilities and manage treasury complexity with as few specialty bolt-ons as possible. Treasurers have admitted they don’t want to be left holding the bag if something goes wrong with their preferred TMS and so yield to the pressure to go with the ERP’s treasury module if that’s what IT will support and be accountable for.
The Strategic Treasury and its Talent Trap: Standardize to Enable a Non-Standard Job. For years, treasurers have pushed their organizations higher up on the transactional-to-strategic ladder to better support business growth in a more global and volatile market environment. But finding and offering opportunities to the right talent is a challenge. “It’s a big ask,” a EUROTPG participant observed: the job requires treasury and finance skills, prioritization and time management skills, interpersonal skills, detail orientation and big-picture understanding, all at once.
However, in many cases there is a disconnect between the job ad and the actual job: the highly skilled successful applicant often ends up with very little of the “sexy stuff” (strategically important, developing or fun), and a lot of spreadsheets,manual workarounds and repetitive tasks. Again, in addition to rotations and cross-functional projects, adequate technology keeps treasury staff motivated: technology automates unsexy tasks and frees up time for the value-adding and rewarding aspects of the treasury job that require analysis and imagination.
Technology is the 2014 Strategy. In fact, after the perennial favorite “improved cash flow planning,” “investment in new technologies for treasury and risk management” topped the list of strategic initiatives for 2014, according to Reval’s 2013 “Future-Proof Your Treasury” survey (see illustration previous page). This was particularly so among respondents in EMEA, where The NeuGroup generally has observed leaner treasury staffing levels than in the Americas. The same survey showed that respondents were most interested in seeing developments in data analysis and risk visualization tools, which would produce a clearer view of the big picture while allowing granular deep-dives into company data.
Never Stop Building the Treasury Team. Nevertheless, even with integrated treasury and risk management technology and processes, getting treasury a seat at the strategy table hinges on the people in its organization. Treasury is a profession that marries a finance understanding, experience, curiosity, people skills and common sense, and they are hard to find. As a result, projects often get assigned to the same talented but few people. Few have the luxury of adding headcount so there need to be ways to identify talented people earlier in their careers and so have a broader stable of players.
Efforts to get resources into treasury include formalized interdepartmental “talent exchange” programs, internships and hiring low-cost gap-year students. This adds an extra body to the team on a temporary basis and can help complete projects or research, and helps find and test talented individuals. But, many are still in a bind when it comes to adding an actual headcount (never lay anybody off: reassign them; do anything to keep them). Finally, in looking at the organization and its staffing needs, the horizon is often too short: look out five years and try to determine “where do we want to be then?” and plan for it.
Is SaaS Cloud Nine?
IT may have some clout to put the kibosh on specialty software in some instances, but the good news is that it is also becoming more open to software-as-a-service or SaaS offerings as these demonstrate better security. As more vendors offer cloud delivery, IT’s acceptance of SaaS and comfort with not being in charge of it is a trend that will serve treasury well. Not only is SaaS handy at upgrade time (managed remotely by the vendor and simultaneously for all clients), but SaaS vendors are also compensating for the lack of outright customization inherent in their delivery model: Reval, for example, offers significant “parameterization” in its TMS, i.e., a wide range of choices and definitions that are built into the system to meet the needs of a variety of business models, risk management approaches and many other factors that may differ between clients.