Corporate TreasuryTreasury transformation: part one — where to begin

Treasury transformation: part one — where to begin

Simon Kaufmann - Head of Client Relations, Fides Treasury Services discusses documentation, benchmarking, and assessment for treasury transformation

By Simon Kaufmann, Head of Client Relations, Fides Treasury Services

Treasury transformation is a vital step towards enabling corporate treasurers to become more strategic, work more closely with the business, and take strides towards career advancement. However, it can be difficult to know exactly how to get started.

Any transformation initiative can be broken into three distinct phases:

  • Phase I — documentation, benchmarking, and assessment
  • Phase II — building strategic and implementation plans
  • Phase III — implementation, rollout, and management

This article covers the initial phase — the steps that are needed prior to planning. Stay tuned for parts two and three.

Treasury transformation: Start at the top

The first step towards treasury transformation is understanding current operations and capabilities, so you can identify potential areas for improvement. But before you dive too deeply into the data-driven details, it’s smart to get executive-level support. It doesn’t make sense to spend hours or weeks pulling data together only to find that you won’t be given the backing or budget you need for implementation.

Chances are, you have already identified key areas where you would like to effect change. These may be things like straight-through processing, holistic cash visibility, or increasing business efficiency. It could be as simple as wanting to cut back on the amount of time your treasury analysts are spending working on spreadsheets.

When presenting your initial proposal for approval, it’s important to ensure that it aligns with any goals and mission statement set at the business level. For example, if your company mission is to provide a mobile-first experience for customers, your treasury goals may be different from those of a CFO working for a company focused on delivering energy to third-world countries.

Documentation and benchmarking

Once you’ve gotten the approval to move forward, you can start documenting the current state of treasury operations. Depending on the size, scope and maturity of your data collection processes, this first step can take weeks or even months to achieve. The more disparate data and data sources you have, the more of a challenge it will be.

Be smart about your documentation. It should be as comprehensive as possible, and as measurable. If one of your goals is to cut back on time spent on spreadsheets, document exactly how much time is being spent today.

Don’t forget to include staff capabilities and skills. How many employees do you have, and what are their areas of expertise? Do they have skills that are transferrable to other areas?

Benchmarking is another key part of this process. While you’re gathering the data on your own processes, it’s important to compare against competitors and industry best practices. External factors should also be taken into consideration. Are there any industry regulations currently in place that affect certain processes, or may in future?

Benchmarking will also help you get to the next step in the process, identifying areas where change is needed.

Assessment: Identifying areas of change

In addition to areas you had identified prior to starting the documentation and benchmarking project, your research may have uncovered additional targets for improvement. You might not have realized that your team was spending ten hours per week reconciling bank statements, or that all transactions with one particular bank were taking five days to clear.

List out all the areas you have identified, and create a short descriptor, such as “improve cash visibility,”  “centralize control,” or “automate processes.” Within each category, you can then create more measurable goals.  For example, in “automate processes” you might have a goal of cutting staff time spent on bank statement reconciliation by five hours per week.

It’s also a good time to start thinking of strategies to achieve these goals, which will ultimately go into your strategic plan. For example, it may be possible to meet all of these goals by using a multi-bank connectivity provider like Fides rather than using individual bank portals, or by implementing a TMS.

As in your initial documentation, areas for change should include people. Does your current staff have the capabilities needed for the operational changes you will be proposing? If not, what other skills are needed?

Knowing exactly what you want to improve, and having metrics to base improvements on arms you with the information you need both for any secondary round of approvals and for the next phase of treasury transformation: building your implementation plan.

To find out how seamless multi-bank connectivity has helped corporate treasurers around the world transform their treasury operations, you can view and download Fides case studies here.

Simon Kaufmann leads sales and marketing for Fides, including customer relations and partnerships. He has more than 18 years of experience in banking, and came to Fides in 2014 from Credit Suisse. Simon holds a Bachelor’s degree in Business Administration from the HWZ University of Applied Sciences, Zurich.

This is part one in a series of three articles. Part two will be published in May and part three will be published in August.

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