Treasury Management Systems are the beating heart of many treasury departments, but how do you know you have the right system for your needs? How can you measure the effectiveness of your current set-up? And what TMS developments do you need to see coming through from your provider? The Global Treasurer asked a couple of people in the know for their answers to these big questions.
Q: How can organizations ensure they’re using the best TMS for their needs, both today and in the future, as they evolve?
Michael Juen, CCO, Bellin (MJ): “The best way to make sure that a company is using or introducing the best TMS for their needs is a thorough analysis that covers both the status quo and any future requirements. It can be difficult to assess where a company is headed and what will be needed, which is why it can be helpful to include external consultants or a representative from the TMS provider to guide the analysis. Ideally, the system provider directly offers consulting. It also pays to gather as much information as possible about a TMS provider’s offering but also about their roadmap and upcoming features.”
Craig Jeffery, Founding and Managing Partner, Strategic Treasurer, LLC (CJ): “The increasing depth and breadth of technology functionalities available today demand an intensified level of corporate self-reflection and simultaneous forward-thinking, unrivalled in recent treasury history, but also unmatched in potential opportunity benefit.
“In an environment where treasury expectations are mounting, practitioners must consider unique organizational needs, the pros and cons of keeping a system with an end-date (versus implementing sweeping change), the applicability of each initiative on specific operations, the effects any modifications may have on underlying systems, the percentage of program functionality being used and much more.
“Treasury should clearly outline the costs and savings, both quantitative and qualitative, of a potential TMS switch and ask difficult questions with complex answers. Does my organization keep a working, but outdated, system or commit to a complete overhaul? Could our risk aversion to new technology adoption cause us to lag behind competitors? Is the timing for such an endeavor appropriate? What would the implementation roadmap look like going forward?”
Q: How can treasurers measure the effectiveness of their current TMS?
CJ: “Organizations must perform an in-depth, cross-departmental analysis of TMS functionalities, paying attention to customized tech stacks and how the current program addresses speed, security, connectivity, data management, transparency, cost, compliance and flexibility. Treasurers should include all stakeholders in the conversation to determine any challenges requiring concentrated attention.”
MJ: “A good way of measuring the effectiveness of a TMS is to look at the degree to which digitization and straight-through processing have been achieved. The fewer media disruptions and manual tasks a treasury department has to deal with, the more effective and efficient it can work. Ideally, you only have one system with one data base. Analyze how and where you use resources, that will give you a good indication of what could be optimized.”
Q: What are the evolving TMS functions that will help to futureproof chosen solutions?
MJ: “When assessing whether or not a TMS is futureproof, it helps to take a look at the track record of a provider: have they supplied innovative functionality in the past? In addition, make sure you’re working with a sustainable provider that guarantees continuity to ensure your system will still be state-of-the-art in a few years to come and won’t have been neglected, replaced or even phased out (for example due to a change of ownership). The continuous addition of new features into an existing system is much less disruptive for a company than having to migrate to a new system. As for evolving functionality, the next few years will see the increasing implementation of new technology such as AI or blockchain.”
CJ: “Change is inevitable, but its implementation can be measured and purposeful. In a dawning era defined by blockchain, machine-learning, AI, RPA and APIs, processes are hyper-intuitive, financial software packages more efficient, cloud-based solutions increasingly secure and gaps easier to manage. To match this innovation-rich landscape, treasury must futureproof operations with flexibility, visionary thinking and a willingness to consider leveraging so-called disruptive technologies.”