Why Cloud Matters to Treasury

Bob Stark, vice president of strategy, Kyriba, explains why cloud delivered SaaS solutions offer more value to CFOs and treasurers than ASP or installed systems.

Cloud technology is commonplace in virtually every aspect of our lives. And while cloud technology is becoming more prevalent in treasury solutions, treasury management systems have typically not been delivered in the cloud. This trend is starting to change as treasury technology providers realise that web-enabling older systems does not offer the same benefits as natively developed SaaS applications.

When solutions are fully delivered in the cloud, CFOs and treasurers stand to gain a range of benefits, including reduced costs, business continuity and better reliability, as well as simplified implementation and support requirements.

From a financial perspective, the costs involved in ‘buying’ SaaS software are less than the previous generation of systems, due to the monthly subscription model and choice of modules or functions now available to CFOs and treasurers. As such, only the required functionality need be selected, effectively transferring control of software costs to the user.

Similarly, there are no internal hardware or IT costs, while upgrade costs are also eliminated. This flexible model also serves to remove the dependency on IT, cutting costs for the company and generating an attractive ROI through IT savings alone.

Crucially for the business-critical finance department, cloud solutions invariably offer better disaster recovery and business continuity than installed or even application service provider (ASP) solutions. All clients utilise the same infrastructure, meaning that there is no longer a single point of failure that disrupts system availability.[[[PAGE]]]

The fact that shared technology resources are pooled also means that they can be dynamically assigned to optimise system performance. Full redundancy of the entire cloud environment in multiple locations also protects system availability from disruptive events, including natural disasters.

For this reason, disaster recovery metrics such as recovery time objective (RTO) and recovery point objective (RPO) are greatly improved for SaaS customers, with contractual commitments and financial penalties for non-compliance. Significantly, this commitment from technology providers will truly illustrate just how good a job they believe they can do for their prospective clients.

From a functionality perspective, the fact that CFOs and treasurers using cloud solutions are always on the latest release means that they will benefit faster from the latest software innovations. The fact that the treasury system provider focuses all their development on a single version allows for feature-filled releases to be delivered more frequently.

Cloud solutions are also less expensive to support per client, so once a certain volume of customers is reached then economies of scale contribute to better operating margins, creating more resources to invest in further product development and improved profitability. Even if the vendor chooses to take profits, the net effect is a more financially healthy company, which is often an important selection criterion for CFOs and treasurers. 

By their nature, cloud solutions are designed for quicker and easier implementation. Ease of implementation is also aided by IT not being needed for the project; basic implementation tasks such as connectivity to banks and trading portals are managed completely by the vendor instead.

Client support is also simplified because every client is on the same version. This allows specialisation of knowledge by support personnel, contributing to quicker problem identification and solutions.

Troubleshooting also becomes easier because any issue a client experiences will either affect a single customer or multiple customers, which in itself offers immediate intelligence in determining the magnitude of an issue. Some vendors will also enable proactive monitoring of availability, connectivity and other technology KPIs – which can head off issues before they occur.

Typically, SaaS/cloud solutions are far easier to support than other software alternatives because there is little or no customisation of the software. Rather, flexibility is built into system design meaning that tailoring, configuration, and personalisation (of screens, reports, dashboards, setup options, etc) becomes part of the standard software. Just as software customisation frequently creates a support nightmare, this friendly, flexible software configuration allows for more efficient customer support.

Overall, cloud or SaaS solutions (which can be used interchangeably) present a much better option for CFOs and treasurers than ASP or installed solutions because they offer better ROI, disaster recovery and reliability, as well as being easier to implement and support. For enterprise users, the cost of acquiring software is obviously important, so the opportunity to reduce those costs also adds to the overall value of the cloud model.

A strong, viable partner that commits to the highest service levels further boosts value, underlining the growing consensus amongst CFOs and treasurers that the cloud has become critically important.