Editorial Team, Treasury Management International (TMI)
The shelves of the treasury technology supermarket have never been better stocked, with vendors offering everything from a TMS for the entire function through to tailored tools to support specific, and sometimes niche, processes. To take advantage of what is on offer, treasurers need to secure enough investment budget – and to do that, all stakeholders must be on the journey from the start.
Putting together a successful business case for treasury technology investment is critical in ensuring that the function can purchase the kit it needs to run an efficient operation. Crucially, partners in the business outside of treasury can play a vital role in assisting in the process. One of the first tasks is to identify who the other stakeholders within the business are for the type of project being developed. In most cases, this will include the IT department, but there are several different areas where a treasury technology project might have an overlap or a synergy with other business functions.
Jim Scurlock Treasurer, DataRobot
Jim Scurlock, Treasurer, DataRobot, explains: “If you’re developing a system around intercompany lending, for example, pull in the tax team and, potentially, the legal team, to understand the agreements. That way, you’re building a solution that doesn’t just meet treasury’s requirements but also the needs of others. In addition, it can be helpful to have these stakeholders onboard along the way, so they also understand your vision.”
Eveline Stam, Group Treasurer, BearingPoint, shares a recent example of how her treasury approached stakeholders for the recent implementation of a cash forecasting tool: “Our treasury speaks with the CFO bi-weekly – we had spoken to him regularly about our need for this tool, so he’s on board. Other stakeholders include the controllers who use it. We speak with them monthly, and we had discussed with them that, in the future, we might want to have a tool to support cash forecasting. We also speak to our IT Director about these types of issues. Before we get started on any tech project, we have to complete a number of forms and then IT figures out if they’re going to get involved or not.”
The important point is to include as many potential stakeholders as possible as early as possible so everyone has the opportunity to state their cases from the beginning of the process.
Eveline Stam Group Treasurer, BearingPoint
André Scheffknecht, Vice President, Sales, Coupa Pay EMEA, Coupa Software, comments: “Even if you understand that the people you involve in the beginning might not be on your side, you still need to include them. If you have them along with you at the start of the process, you have the time to convince them. For example, you may never be able to persuade 100% of your company that a TMS is needed. But still, you can ensure that everybody feels heard, that they can bring their arguments and comments into the process.”
Treasury as a Dyson Sphere
Since the 2008 global financial crisis, the treasurer’s role has become more strategic. One outcome of this enhanced role is that treasurers, generally speaking, have been able to access some level of budget for investment in technology.
Tom Leitch, Director of Sales and Business Development - Treasury, Bottomline TreasuryXpress, notes: “What we see in some firms is that because treasury has many different stakeholders, some also have access to other budgets as well as its own. It’s moving away from being siloed, where the likes of finance, IT, and FP&A [Financial Planning and Analysis] all have individual funding. It’s now taking more of a holistic approach. Treasury at that level of sophistication has become a Dyson Sphere [1] of the business, encompassing every entity and gathering the various data and information required. From that point of view, the allocation of budget is somewhat easier.”
The pandemic has also had a vital role in highlighting the need for investment in the corporate treasury function, as staff in all areas of an organisation now understand that treasury is a critical component of the business. Cash and liquidity bring back so much information into treasury that can be used to support teams such as procurement, accounts payable, or accounts receivable, for example.
“In the past, they were running separate silos, and teams were looking only at their data and KPIs,” says Scheffknecht. “Now it makes a difference if a treasurer puts forward a case that they can be more efficient, more compliant or more secure. These are normally the top three arguments for treasury tech investment. Add to that the ability to fully manage cash on a real-time basis. Treasurers can tell the business every day at every hour, how much cash the company has, and how much cash will be needed in one month, three months, nine months or 12 months because now the different teams in the organisations are exchanging information.”
When putting together the business case for a budget for treasury technology, treasurers have to outline the most important challenges they’re trying to surmount. These should be ranked internally within treasury beforehand, then shared with the broader teams.
“After benchmarking with many corporates, we see there’s a variety of common issues that treasurers are trying to resolve,” says Scurlock. “First, there are too many spreadsheets, too many manual processes and [too much] disconnected data. As a result, you have treasury analysts and managers working on much lower value-add activity as they have spent so much time just cobbling information together. Once you know what you’re trying to resolve, you can then highlight the benefits of each item.”
Those benefits could include time savings, improved controls, greater transparency around the cash or enhanced visibility of FX risk.
“It’s also helpful to then prioritise those items that don’t just impact treasury, but ones that potentially can benefit your stakeholders,” adds Scurlock. “For some of those items, you may even already have the technology to do it, so that could be a project that you can complete a little bit faster with the existing resources you have.”
Defining the intangible
One of the greatest challenges in making the business case for investment in treasury technology is to distinctly outline its benefits in terms that are clear to senior management. Many of these are intangible and do not have an obvious return on investment (ROI) dollar amount applied to them. The level of value returned by one TMS could alter radically when applied to two different companies.
“Most of the projects that I’m working on this fiscal year are focused purely on the intangible benefits,” reveals Scurlock. “For example, we are really focusing on fraud and risk mitigation, ensuring that we have proper controls not just in the treasury area but over the entire end-to-end payments cycle as we consider payments across the organisation.”
Fraud and compliance are critical topics for senior management and the C-suite. The treasurer can point out that treasury technology helps to protect against fraud and ensures the organisation is compliant, and makes sure that the correct payments are made to the right people.
André Scheffknecht Vice President, Sales, Coupa Pay EMEA, Coupa Software
Scheffknecht notes: “If you are a publicly listed company, the last thing you want is to have to speak to the press and admit that you falsely transferred $50m because you were a part of a fake invoice fraud, for example. You can’t put a figure on the benefit of installing treasury technology that prevents these kinds of frauds from happening.”
Other intangible but genuine benefits unlocked by treasury technology revolve around how data from across the organisation is collected, pooled, and analysed by the function.
Scurlock comments: “We are also focused on moving information to data lakes, which enables us to add visualisation software. If treasurers can build something like that, they don’t need to have an analyst spend two hours every morning cobbling spreadsheets together. Now you can overlay data visualisation software, which presents all treasury data in a clearly defined spot, and you simply hit refresh. This lets you retake those hours, enabling the treasury team to work on higher value-added activities. Those intangible wins are so valuable to both treasury and an organisation as a whole.”
BearingPoint’s treasury team prepared for its cash forecasting tool by carrying out an analysis of the current processes, which identified many of the issues that needed addressing.
“I think Covid helped, because that highlighted how we weren’t able to forecast as well as we wanted to,” recalls Stam. “Storytelling around these issues and explaining what we need is so important. We wanted to have greater control of, and transparency over, our costs. For this business case, there was no ROI calculation, we simply needed the infrastructure to do our job. Treasury technology can generate more insights, helping us to work smarter. That’s what the business wants to see: better reporting and the treasury group adding more value.”
The ability to automate highly manual processes not only dramatically speeds up the time it takes to accomplish tasks. Moving personnel from fairly non-engaging data-entry positions to more strategic roles can improve morale in treasury and the other departments that benefit from the investment.
Leitch suggests: “When you’re looking at those areas that you want to improve, try coming up with some metrics that you can score against. We’ve seen some customers run satisfaction surveys within the treasury unit as a process, or a ‘before and after’ survey to see how daily operations have improved. Small elements like that make a big difference, and they can be encouraged – we saw one client offer a £100 Amazon voucher for feedback on four stages of their implementation process, for example.”
Tom Leitch Director of Sales and Business Development - Treasury, Bottomline TreasuryXpress
Many of the benefits of a treasury technology project relate to the breaking down of silos between different business units. Once a treasurer has that holistic view across the organisation, they are then in a position to make recommendations to the C-suite on fresh projects.
Scheffknecht notes: “Something new on the procurement side might be in the works, or the company might be thinking about introducing a new product line that would lead to more investment into raw materials, for example. Bringing treasury into that type of planning is important. The start of a project might be 18 months away, but treasury could secure a loan now while interest rates are still low, perhaps locking in an extended credit line. These types of strategic calls and plans benefit corporates.”
Socialise the project
Managing a technology project can seem daunting to new or inexperienced treasurers. Every company is different, but there are key fundamentals to apply when preparing such a business case.
“Have a clear vision of your short-, medium- and long-term goals,” advises Scurlock. “You may not be able to tackle everything all at once, so be focused on your requirements, versus what your ‘nice to haves’ are. Also, spend the time to document the vision clearly. Call out what you think the benefits, the impacts, and the risks are to all stakeholders. This demonstrates that you’ve done the due diligence.”
Analysing and reflecting on the organisation’s existing technology infrastructure is a crucial exercise and it can indicate the path ahead.
“It is critical to analyse what you currently have [in order] to understand what is going wrong and what is working,” says Leitch. “In that analysis, you might even find that you already have a fix in-house and don’t necessarily even need to buy a system – perhaps new data feeds or a new file format from a bank may improve what you already have in place, or connecting two existing systems might create value. It all links together with having the right team, the right people, and the right outlook of where you want to go, understanding where you are, where you want to end up.”
Stam agrees that being able to paint a detailed picture that demonstrates the ‘before and after’ benefits of any business case for treasury technology investment. “We implemented TIS, and before that we had seven or eight different tokens for all our different banks,” she says. “Now we have one platform, everyone is in there. We can change it if, for example, one person leaves and a new person comes in; that can be arranged instantaneously within the system. These types of stories really need to come across in terms of how much easier your life is and how much safer it is for the organisation.”
It is also vital that treasurers find a way to ensure stakeholders remain involved throughout the project. “Keep socialising the project and the technology plans with your impacted stakeholders along the way,” advises Scurlock. “By doing so, you can highlight the benefits for treasury and the benefits across the broader finance function or the overall company. That way, everyone will be heading in the same direction – together.”
