How is Corporate Treasury Outsourcing Developing?

There was a time when the mere thought of outsourcing sent shudders down a corporate treasurer’s spine. How could I possibly entrust the financial heart of my business to strangers? They would never understand, much less add any value. Corporate treasuries began to install complex software solutions and hired treasury experts to manage them, but they soon ran into obstacles. How should we tweak this system to suit our unique business processes? How might we interface with other systems? And how can we ensure that our treasury experts’ competencies are still top notch when it’s time for an upgrade?

Joakim Wiener, director of finance and asset services at TradeTech Consulting, has worked with treasury systems and corporate treasurers for many years in Sweden and many other European countries. In this Q&A with OpusCapita, he provides his insights into how corporate treasury outsourcing is developing.

Q: What trends have you noticed in terms of outsourcing services lately?

JW: There is a clear trend among corporate treasurers that is often referred to as the second wave of outsourcing. It is now clear that specialised consultants can apply their experience of a wide range of companies in enabling lower operational risks, boosting productivity, aligning IT investments with strategic goals and allowing the customer to focus on its core business.

Q: Can anything be learned from the early days of outsourcing?

JW: Many things. For instance, companies initially bought a fixed service package but soon found themselves restricted by services that no longer matched their needs. The lesson here is that outsourcing is not about buying and selling services. Rather, the key is to form a strategic partnership with consultants who can take on an objective, proactive advisory role. Another lesson learnt the hard way is that it’s not just about installing a new system – it’s about embracing a whole new way of working.

Q: What should a corporate treasurer bear in mind when selecting a managed services partner?

JW: Domain experts can help you get the most out of your investment. Make sure that the consultants can support you from a technology, as well as a business, perspective. Their competencies should cover:

• Support in the selection process, such as the benchmarking of competing systems.
• Support in the implementation process, including integration with your business operations and also technical integration with other systems.
• Support in the go-live phase – operational experience combined with the ability to create a detailed go-live process, including a roll back plan.
• Support in the post-live-phase – assisting with patches and upgrades, but more importantly, acting as a pair of eyes and ears in the market place and ensuring that the client gains from the full potential of the system at all times.

When testing the candidates, listen to the questions they ask. An experienced consultant will know how to identify where problems are likely to occur, and how to prevent them. And then ask them to outline, step-by step, what you need to do to get where you want to be in a specified timeframe. The more thorough you are in your pre-study and planning process, the clearer the objectives and the more likely you are to maximise the return on all of your investments.