Making the Right TMS Decision - Part 4: Implementation
The selection process is complete and the way forward is now clear to implement the chosen solution into your treasury environment. It may be that you are introducing a new treasury management system (TMS) into an existing structure, or that this is an integral aspect of a complete treasury re-engineering process. It may be that the TMS is being implemented alone and integrated into other existing treasury software, or it may be that other new treasury technology, such as a conformation matching system or a multi-bank dealing portal, is being implemented at the same time. Whatever the complexions of the implementation project ahead of you, the fundamental principals of project management remain the same.
The first step is to build a project team that, as in the case of the selection project, should include the necessary skills and resources for a successful completion. The senior implementation consultant from the vendor should be included in the team, as should a specialist treasury consultant should you elect to use one. The aim is to achieve a small focussed group made of team players with the same end in sight. Universal buy-in is necessary for the right result, from within treasury, management, at head office and across those parts of the group that will benefit.
A steering committee should also be formed that will include the most senior person involved respectively from the supplier and the company (the project sponsor) and the project manager. They will agree any major changes to the project plan that will impact the nature of the implemented solution, such as the time frame or cost. They can also be called upon to resolve any unexpected obstacles at a high level and allocate resources as required.
The scope of the TMS implementation project should be quantified, outlining the headline issues and aims, and then the project definition should be structured. The purpose of the project definition is not to describe the detail as to how the goals will be achieved or who will work on them but to clearly set out what the project is expected to deliver. It should be agreed between all parties and should communicate clearly to all business areas likely to be impacted by the project. It should therefore be concise, complete and unambiguous.
The project plan will be structured and put into place before any project work begins. It will define:
The project should be broken down into sub-projects, each having a unique objective and characteristics that differentiate it from the rest of the project. Examples of sub-projects for a TMS implementation project could include:
They would be built into the project plan in accordance with their relative importance and the implementation path recommended by the system supplier. Each of the sub-projects may be broken down into phases, with each phase being a coherent step required to complete the sub-project. It should be reasonably small and produce a deliverable to the project. Each phase may then be broken down into individual activities and tasks required which can be assigned to an individual in or assigned to the project team.
Implementing a TMS within any treasury environment will have a serious impact on personnel resource and will present a strain on treasury during implementation and parallel running. This should be addressed and recognised at the earliest stage. Additional help can be obtained from seconded personnel from other disciplines or projects or from the employment of temporary staff. The system supplier’s implementation team will be a valuable source of additional input but any additional cost should be carefully factored into the overall budget. Third party consultants may also be considered for involvement in a project management or project coordination role (and some suppliers employ consultants to carry out the implementation on their behalf). However the resource issue is tackled, it is essential that the knowledge of the system acquired through the implementation process remains within the company.
The implementation project will involve working with other external parties including banks, other software suppliers, group companies and business units. The initial treasury review carried out before the selection process began may have resulted in structural and procedural changes in treasury and the introduction of new ideas, which in turn may effect the business relationships with the company’s banks and the systems and services they provide. Daily cash management and forecasting, for example, can be improved dramatically through interfacing the banking and treasury systems to achieve straight-through processing.
The planned system configuration may also have included interfaces to other suppliers of treasury software in the form of market information systems, multi-bank dealing portals, ERP systems and confirmation matching systems. The TMS may also be required to interface into specialist risk management software or an existing cash management solution. Whatever third party system providers you use it will be necessary for you and/or your supplier to develop the necessary communication with them and to include the discussion of ideas and interface building into the project plan.
Selling the new system concept internally is also important to achieving the goal and to getting the relevant parties involved and contributing. For example, the accounting department will need to be satisfied that the correct entries are being passed into the general ledger and that the interface works well; their input may also be required in discussions with the supplier on particular accounting issues. Business units may be given direct access to the system, perhaps over an intranet, in order to provide data to the centre for cash forecasting and planning and also for inter-company dealing. They may also be allowed access to certain of the analytical capabilities of the system for their own planning purposes. They will therefore require the correct level of training to ensure that they provide the data that is required centrally and that they can use the system for their own advantage, and therefore this should also incorporated in the project. Senior management may be given direct access to the system, perhaps through the use of dashboards, and this should be factored into the plan both in respect of defining and building the dashboards and providing any training.
External auditors would want to be made aware of the decision to implement the system and may have a particular interest in security and control issues. They should certainly be involved in any hedge accounting discussions to ensure that they are content that the TMS carries out the calculations as required and reports on those positions accurately.
The most important relationship during the course of the implementation is obviously the relationship with the supplier. If you work with them as a team and involve one another throughout then the project will run very much more efficiently. The quality and reliability of the supplier’s team and the professionalism of their project manager is clearly key to the success as is the continuity of support; you don’t want their implementation team to be constantly changing. There should be regular meetings, either physical or through conference calls, which would address the progress made, work to be done, identify existing or potential issues and methods for resolution. Items for action should be assigned to specific individuals.
An agreed escalation procedure should be put into place at the outset to address any issues that cannot be resolved by the team on the workface and in the first place would move up to the steering committee.
Completion of the project can only occur if all parties have agreed the definition of completion for your specific implementation. So, as part of the project plan completion should be clearly defined at a particular point, e.g. the input and management of all transactions through to confirmation, settlement and accounting and the ability to handle all day-to-day cash management. The project will almost certainly be phased and each phase may have its own completion definition.
After a successful period of parallel running, usually covering a month end, the system would be considered ‘live’ and the major work done. But the use of the TMS is only just beginning and as the treasury team develops its skills and continues to work with the supplier more and more benefit should be achieved for the company. It is therefore important to maintain an ongoing relationship with the supplier to ensure maximum advantage is taken from what will be a major project in treasury terms.