Strategic Treasury

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Transforming Treasury: Planning for the Future A clearly articulated and well communicated blueprint for change drives significant benefits while elevating and repositioning the critical role that finance professionals have in their organisation.

Transforming Treasury: Planning for the Future

by Paige Chesser, Strategic Solution Delivery Executive, Global Business Solutions, Bank of America Merrill Lynch and Drew Strzepek, Engagement Executive, Global Business Solutions, Bank of America Merrill Lynch

The new mandate for treasury and finance leaders is to assume a more influential role within their business. Strategic planning can help them get and keep a ‘seat at the table’. Creating and executing a strategic plan can accelerate the move from transactional activities to a more strategic and value-added focus. A clearly articulated and well communicated blueprint for change drives significant benefits while elevating and repositioning the critical role that finance professionals have in their organisation.

Keys to Effective Transformation

With the heightened focus on board-level visibility and transparency of cash, treasurers must rewrite the role they and their department play in the overall organisation. The challenge of moving from a traditional transactional focus to a proactive, strategic resource requires both a mindset and operational change for the treasurer, the treasury team and the organisation. Additional factors contributing to the need for this transformation include growth expectations, global expansion, a heightened regulatory environment, as well as decentralised and fragmented systems and processes.

At some companies, it may be that the enterprise has been growing through mergers & acquisitions for several years, leaving it with a slew of antiquated financial systems that aren’t integrated with one another.

Or it could be that the treasurer — amidst all of the changes in the business — hasn’t been able to find the time to cultivate within the treasury staff the skills and competencies that are necessary to help the department thrive.

Or perhaps the treasurer has yet to adjust to new expectations and a new role: since the financial crisis, treasurers are no longer viewed as managers of a corporate cost centre, but rather as internal liquidity consultants uniquely positioned to help their companies grow and thrive.

Transforming and repositioning the treasury function can be necessary for many reasons, but it isn’t always a simple matter. A well defined and executed strategic planning process, a discipline that traditionally has been lacking in transaction-oriented corporate treasury circles, will jump-start your journey and catapult the team to success. So where do you begin?

Establish a framework

The purpose of strategic planning is to set the direction and long-range goals of the organisation with well articulated strategies, supporting tactics and aligned resources to attain the goals. This roadmap sets the stage for change, clarifies for the team what is changing and why the change needs to happen, and is a springboard for creating and communicating a vision of the future.

Executed properly, a strategic plan can enable a treasury department to align its vision, long-range strategies, performance measures and tactical execution plan with the strategic goals of the company — and move forward with confidence.

Components of the plan

There are several components to a strategic plan. You should begin by defining and documenting the strategies you will pursue over the next three to five years — strategies that are aligned with your target vision and the company’s strategic imperatives. Considerations may include people, organisation and locations, processes, technology and infrastructure.

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