Cash & Liquidity ManagementCash ManagementCash ForecastingMaintaining Cash Flow Visibility in the Systems Jungle

Maintaining Cash Flow Visibility in the Systems Jungle

We need to consider what ‘systems integration’ actually means. Does it mean integrating as much functionality as possible into a single system or does it mean achieving a high level of connectivity and data sharing between multiple, separate systems?

System design includes, amongst other things, database structure and application functionality. All of which are determined by the purpose of the system. For example, the number of transactions that need to be processed and / or analysed will impact how the database and other system components are designed. These issues affect not just the software choices but also the hardware. For this reason, it is unrealistic for a single set of system components and hardware options to be optimal for all processing requirements – resulting in a system platform that consists of a multitude of applications, databases and hardware all designed to suit differing requirements in the corporation.

This set up obviously impacts cash flow forecasting, as in order to achieve a true, group-wide view, it is necessary to consolidate information from a number of separate systems, including ERP and TRM systems. In addition to aggregating data, the forecasted figures need to be manually captured or calculated from historical figures or both. Cash flow information therefore requires granulation from many different data sources and often the best way to achieve this is to implement a separate, specialist system simply for this purpose. This is generally a warehousing or similar reporting system that is able to extract data from multiple sources and display the information to the requirements of the specific organisation. For this reason the Internet is usually the best way of distributing cash flow information.

Systems integration is at the crux of enterprise wide cash flow visibility and forecasting. That said, as with system components, tools for system connectivity come in all shapes and sizes. Having a single, standard connectivity tool for transferring all types of data between all types of system is an unrealisable dream. As with systems’ components, connectivity tools are developed for different purposes. For example, while one tool is ideal for sending real-time small data strings, another is better handle large batches of data. Additionally, the kind of data relayed and how secure the data transfer needs to be also has an impact on the tool required. This means that a company not only has a series of systems to manage, but also a portfolio of connectivity tools too.

All this leads to the point that, in order to be able to successfully implement a cash flow forecasting solution an organisation needs to be able to successfully manage different specialist systems and connectivity tools. However, using tried and tested management methods, this is a relatively straightforward task. And, in fact, technology is not the real obstacle to enterprise wide cash flow forecasting and visibility, the aligning of a group’s business processes and data formats is.

System integration is not therefore purely a technical issue, it is a business process integration issue. Business processes need to be streamlined and data needs to be comparable on a group basis in order for any integration project to be a success. Business processes need to be developed from a group level perspective to ensure that, for example, the operation in India is following the same procedures and processes as the operation in Australia. Ensuring that data is compatible is also imperative to guarantee that group Treasurers are comparing apples with apples.

Another crucial success factor is to ensure you prepare early for the post-implementation or support phase. When implementing a cash flow forecasting solution, the project receives a great deal of attention and resources. However, once live, the solution still needs to be supported from a technological perspective, as do the business processes, in order for it to be an ongoing success. It is important to remember that support should also include development of the solution over time to stay in tune with the corporation’s changing demands and objectives.

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