Q&A with Prem Thakur: Digitalisation, treasurer skills and volatility

As a treasurer at a global digital and IT services company what trends are you seeing developing with respect to technology and digitalisation post-Covid?

Finance professionals have had a lot on their plate over the last two to three years. As well as needing to review forecasts and business organisation much more frequently now, they have had to keep an eye on potential future impacts on their operations.

Changing customer needs, upended business models, supply chain disruptions and economic uncertainty are all making planning and decision-making challenging. Now, more than ever, organisations need the ability to pivot and pivot fast, and the companies who stay ahead will be the ones that are agile, think critically, and act digitally.

Covid19 has clearly had a major impact, pushing organisations even more towards technology and digital transformations that can help build resilience. The pandemic has speeded up the adoption of digital technologies by several years. Ukraine and the continuing global turbulence are only reinforcing that trend.

For treasurers, digitalisation is no longer an option, and we recognise it is an ongoing revolution.

Within the remit of our own treasury, we have been especially proactive in enhancing, for example, our online banking transactioning, process automation, TMS, and cash pooling.

Central to our efforts in these and many other areas though has been upskilling of our teams to fully leverage their potential and ensure we maintain our edge.

 How would you sum up the biggest macro and operational challenges ahead over the next two years for you and your team?

Treasurers have many core responsibilities including cash management, financial planning, taxation, forecasting and fundraising, and carrying them out effectively and diligently remains as crucial as ever.

But over and above those key responsibilities the big challenge for us at present I believe is to manage our affairs in the current, turbulent, fast moving operational environment, one in which volatility, uncertainty, complexity and ambiguity (VUCA) are the order of the day.

Managing under real time VUCA is difficult and can certainly test one’s abilities as a treasurer.

How good am I in analysing and interpreting the potential impact of unexpected events ranging cyber to macro on the business?

How good I am at reading developments and my ability to plan for not only mitigating any associated risks but also spotting the opportunity to leverage it in favour of the organisation?

Inevitably, under such pressurised circumstances, economic and political challenges can arise in terms of resources and skill set available to us. More than ever, we now need tech-savvy teams that blend treasury skills with technological know-how more; teams that understand, for example, how financial data can be leveraged and preserved in the cloud, and how to exploit multiple API-based enterprise solutions.

Future-ready, tech-savvy treasury teams can also support better decision-making through more effective leveraging of analytics and so provide greater insight into customers, competitors, profitability and processes as well as support investment planning.

What impact has technology had on treasurers over recent years? What current advances do feel are especially exciting for treasurers?

I sense that treasurers generally are now exploring options other than multiple spreadsheets, excel data, and month-end accounting and reporting much more than they used before Covid. They are devoting more time and energy on enterprise digitalisation and process automation. This is enhancing their ability to support the business round the clock from the office or virtually.

With the help of technologies like AI, we can make fact-based decisions much more rapidly in terms of resources available. Such advances are helping us to analyse M&A opportunities more critically, and explore funding, forecasting and hedging options more forensically, even help predict and shape our responses to supply chain disruptions.

Technology is giving us the opportunity to think and act differently, in a good way, and as treasurers we have to seize it.

How has the role of treasurers changed in your view over the last`10-15 years? Has it become more strategic?

Treasurers play a unique role in managing a large portion of the balance sheet. In addition to the detailed understanding of the organisation in which they operate, they are closest to macro-economic developments, particularly financial markets, and can offer valuable insights to support corporate strategy.

Increasingly over the last 10-15 years treasurers have been asked to play a bigger role, as a strategic partner to the board, advising on how best to build the business line with funds available. Treasurers, certainly in the larger companies, are now much more visible in board room, recognised for the skills and knowledge they can bring to the table.

How would you sum up your involvement with ESG?  

More and more treasurers are getting involved in ESG initiatives. Not only financing them but also embedding them into treasury processes and spearheading departmental sustainability projects.

When discussing ESG in corporate treasury, green financing is often mentioned as one of the main instruments to support ESG goals. However, we in treasury at Sopra Steria are contributing to ESG in many other ways, such as through digital workflows, which include fully digitalised processes in areas such as banking transactioning, record and FX contract management, auditing, settlement and reconciliations, and statement management.

What kind of skills do you think will be especially important for treasurers to have over the next few years considering the uncertain macro and geopolitical outlook?

The days when treasurers solely focused on “core” responsibilities such as managing funding, investments, and forex seem to have disappeared.

Much more valued in treasurers nowadays is a balance of ‘hard’ and ‘soft’ corporate treasury skills such as the ability to communicate well, ability to adapt to change, and critical thinking. This has been necessary not least because of the evolution of the treasurer’s role from a sole focus on back-office functions. Now they also have to be strategic advisors to the board.

Still, there a number of generic skills I believe are vital for success as a treasurer. They include a technical bent of mind, business & management skills, expertise in accounting & finance, understanding and interpreting economic and market movements, propensity to learn and, increasingly, a good grasp and knowledge of technological developments impacting treasury functions.

With hindsight, what is the single, most important advice you would give to the younger Prem when you were just starting out on a journey in treasury?

The younger generation of treasurers are under considerable pressure nowadays and time for them to reflect and analyse their work critically is in short supply.

I think though it is crucial they always have in mind that everything happens for a reason and that without mistakes and failures, one will never learn, that without pain one will never grow.

Understanding and embracing that helps you to avoid dwelling on disappointment or view unfortunate events as regrets. Rather, you will see them as an opportunity to prepare more strategically, more skillfully, more determinedly for the next day.

Based on your experience to date, if you could share one piece of advice with your peers now, what would it be?

Finance and in particular treasury operations today are very dynamic and open to many uncertainties.

And all the signs are that the current turbulence will continue for some time yet, perhaps worsen considerably.

In such a climate treasurers need a highly dynamic approach to fulfilling both their core and strategic responsibilities. They need to anticipate and react quickly to fast moving developments.

They should not be afraid to act decisively, even though it may not be possible to do so on the basis of having a clear direction and end-point certainty – inaction can also cause considerable damage.