By Ursula Conterno
TMSs are still relevant and top of mind for treasurers because they remain keys to efficiency as resources dry up.
One would think that all that could be said about treasury management systems (TMSs) would have been said already. After all, TMSs have been around for a while. At The NeuGroup, the topic pops up on the agenda’s of our peer-groups constantly. So, why are treasurers still talking about them?
The reason is that they remain key for treasury organizations to become more efficient in an environment where resources are becoming scarce. At the beginning of the year, The NeuGroup in a survey asked several of its treasury peer groups to name their top three priorities for the next 12-18 months. TMSs were ranked fifth as the most mentioned project or initiative by treasurers and first by global cash managers (see iTreasurer, February 2015).
Not so shabby for an “old-news” topic. In spite of their relative importance, there are still many companies that rely on spreadsheets to manage treasury activities, as indicated by a recent survey to members of The NeuGroup’s Global Cash and Banking Group. There are many reasons that explain the wide use of spreadsheets for certain activities, including the fact that many systems lack the capabilities to support those treasury processes. But in many cases, it is just that the TMS is not in place at all or that the solution in place is partial and workarounds are required. The same GCBG survey showed that lack of resources is in fact the biggest challenge that companies face during a major system selection and implementation project, and we could deduce it is probably the most important deterrent to starting the process in the first place. Now, this is a vicious circle—companies need more support from their TMS because they have limited resources but cannot get the system in place because of the same limitation.
It is important to break this circle. Once a TMS solution is in place, the same survey showed that more than 75 percent of users considered their solution satisfactory, rating it 4 or above on a scale of 1-5. Yes, resources will be hard to come by but at the end of the day, the overall organization will be better off. This assumes companies make the right decisions when having the opportunity to select and implement a TMS, especially when these decisions will have impacts well into the future.
Fortunately, there are best practices and lessons learned than can be applied across the board when making TMS-related decisions. These lessons do not point to a one-size-fits-all, but rather to a world-class method that allows identifying the best solution and implementation process for each company’s needs. After all, companies are looking for solutions that, as one of our members put it, allow them to “efficiently manage their business, streamline their processes, increase their data security, provide an audit trail and free up human resources to do more value add-work”.
Editor’s Note: With a core team of member treasury professionals and supported by a group of external experts, The NeuGroup is embarking on a project to discover World-Class Principles of Treasury Management Systems and TMS Implementation. The findings are expected to be published in October 2015. For further information or to participate contact Ursula Conterno at [email protected].