Opposites Attract: SaaS TRM and ERP

Historically, efficient treasuries have required specialised functionality that enterprise resource planning (ERP) modules have not always been able to fully accommodate. This has led to the development of specific treasury solutions such as treasury and risk management (TRM), which can help straight through processing (STP) and predictive risk assessments.

While the development of ERP treasury modules has not been at a complete standstill – indeed it has incorporated some of treasury’s more commoditised functions – it is also true to say that the needs of the market have evolved. The treasury function often includes risk nowadays, for instance after the 2008 financial crisis, and the technology necessary to support the changing role of a corporate treasurers has consequently had to evolve too. The technology a corporation chooses to support treasury’s expanding remit has changed to put the treasurer in the driver’s seat, with a nimble, collaborative infrastructure that can respond to various demands.

The Forces Shaping Treasury Technology

On any technology platform it is the end user that drives how information is shared across the enterprise. This fact is at the heart of why cloud-based applications have gained such popularity among consumers, and why cloud-based offerings are now also gaining popularity among users in the industrial world. Not only do these cloud offerings enable the sharing of information, they also promote social interaction. In this respect, a cloud-based treasury solution architected from the beginning as a one-to-many Software-as-a-Service (SaaS) deployment enables enterprise-wide collaboration across treasury and the rest of the organisation. It is less limited than a traditional ERP system, and indeed can integrate with it to expose the full power of an ERP database.

For the full breadth of a corporation to gain the benefits that SaaS technology can offer, its solutions should be integrated, comprehensive, and on a single version. These requirements ensure global visibility into cash and risk, an STP workflow, responsiveness to change, and a low total cost of ownership (TCO) that puts the responsibility of upgrades, systems and maintenance on the SaaS vendor.

Global visibility across cash, counterparties, exposures, debt and derivatives is critical to the modern treasurer, who needs to understand the interrelated impacts of any one activity upon another. These capabilities cannot be discounted when specifying a technology solution. Today, all things are seen as risky – from operations to finance. If cash management is not an integrated workflow with financial risk management and accounting, treasury cannot properly identify, forecast, and act upon the information it needs to make strategic decisions and guide corporate performance. It is for these reasons that modern treasuries can see the strategic value of leveraging the sophisticated specialty treasury and risk capabilities found in SaaS-based TRM – it can deliver ease of integration and handle evolving risk requirements via a subscription-based service.

A SaaS-delivered TRM not only provides a collaborative infrastructure that enables global visibility and management of cash and risk as one, but is also nimble and scalable for growth and change, regardless of the number of ERP systems or multiple versions of ERP systems a company may have. The initial security and control worries about effectively outsourcing systems to the cloud have also largely been solved as companies come to trust the strong authentication and access controls deployed, or they take advantage of private or hybrid clouds, as opposed to the less secure public cloud that corporations tend to avoid.

As corporations expand into other markets around the world, so too do their systems need to expand across the physical boundaries of nations, functions and time zones. The system used by a treasury also needs to be able to upgrade quickly to accommodate changing compliance requirements in each individual country and in regard to cross-border international regulations. SaaS can help with both needs.

For a company that is ready to integrate a SaaS TRM with its ERP system, the following benefits highlight how the combined offering can be greater than the sum of its parts:

• Less interfaces, less cost: Companies have complex internal and external environments, for which they make connections between their ERP, other internal systems and various external technology partners, such as banks, trading portals, and market data providers. A SaaS TRM and ERP integration can simplify and streamline these Connections-as-a-Service (CaaS) and eliminate the hidden charges of on-going software maintenance and enhancements.
• Easy upgrades: The upgrade paths of a SaaS TRM will always be in sync with a company’s ERP systems, even if there are multiple systems on various versions. The combination of the SaaS TRM and ERP enables companies to scale their system’s reach as they grow by acquisition or expand their global footprint.
• Access to information: Companies can tap the power of the organisation’s information from anywhere with access to an Internet browser. Streamlined workflow of treasury and risk management activities moves information more efficiently across a single platform for executing trades, completing payments, managing cash, and financial risk and accounting.

Chief financial officers (CFOs) and the treasurers of large multinational corporations (MNCs) are currently optimising their organizational strength for enterprise level STP and collaboration, ensuring they have the integrated capabilities and the resulting intelligence to make strategic decisions in an uncertain and volatile financial world. With the transformational power of SaaS, the relevancy of TRM for global visibility into all things risk, the SaaS TRM can integrate with ERP to keep treasury nimble, strategic and in control.