Before thinking about talking to vendors and analyzing the treasury management system (TMS) landscape to find the optimal solution, you should answer the question, “What am I trying to achieve?” If you can’t answer that question succinctly and with a clear set of objectives, you may not be ready.
A precursor to any successful project is a clearly defined understanding of the current state and target state. A treasury group’s current state may be manually intensive, replete with inefficiencies and control issues, and wholly suboptimal. A target state objective is usually to remove these inefficiencies, control issues and dysfunctional operating procedures and replace them with leading practices, where possible. The biggest single problem, however, can be the fact that most companies don’t know what they don’t know. This is where attendance and participation in conferences, such as AFP, along with local chapters and thought leadership, are critical. Treasury professionals should become familiar with the art of the possible in terms of leading practices, novel ideas, creative solutions and learning from those who have been there before. Consider:
- What types of transactions and what volume are you likely to have in the future?
- What would be nice to have rather than a must-have?
- Are you willing to be flexible?
- Do you want to be leading-class or have the best in cost?
Factors to consider in technology include:
- Do you have the availability of a supportive IT group?
- Does your company have an appetite for public or private cloud-based solutions?
- How stringent are your security and control requirements?
- Do you desire the ability to customize a solution or integrate it into a broader digital environment within your organization?
Your ability to answer these questions may start to narrow the choice of solutions available, and agreeing on these ahead of time should prove beneficial.
Caveat emptor is a wise adage to bear in mind when selecting both a vendor and a system. There are both good and bad stories surrounding nearly every vendor, and it’s important to select a system based on fact rather than myth. Just like buying anything, you need to be able to do the research to be sure you are making the right choice. Keep in mind that a request for proposal likely will be returned with “yes” as the most common response from vendors, regardless of the question. While the responses may truthfully be yes, it’s important to understand what that yes answer really means. It is also important to forge a relationship with a level of trust and mutual respect that will carry on into the future and get a clear understanding of a vendor’s vision for its products.
Getting the right people involved from the beginning will smooth the path to a successful selection, contract process and delivery. Consider involving your entire treasury team, both domestic and international (if appropriate); IT; procurement; the project management office team (if applicable); accounting representatives; the ERP team; a dedicated group within treasury that will be responsible for the project; and, importantly, trustworthy advisors.
Where will you go from here?
Once you have selected your optimal TMS and deployment methodology and achieved your goals, it is important to protect your investment. You can do this in a number of ways, such as:
- Documenting your implementation, including all of the key decisions and considerations
- Creating a user guide or manual for new staff
- Creating training guides for certain modules, such as frequently asked questions, setup guides, recorded video sessions, etc.
- Setting aside a budget for training every year
- Getting involved with the vendor’s user groups and being invested
- Being open to change and adapting.
It was mentioned earlier that certain buyers are in the market due to perceived system deficiencies. These deficiencies very often are only perceived deficiencies, which can be readily overcome and potentially even avoided by implementing the six steps above. Once you have a path marked out to achieve those things, you should be well set up to select and implement your TMS.
This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice.
Paul Bramwell is principal of the Global Treasury Services practice at EY.