Adding new treasury-specific technology is a challenge for a department frequently charged to ‘do more with less’. Discussions at the recent EuroFinance Strategic International Treasury conference in Miami highlighted the many challenges faced on a systems project, and to negotiate these.

Finding the budget and the right system

Before a treasury technology project can start, the business case for funding must be made. The budget should be far more than the price tag on the TMS, as Annette Tedesco, Treasury Systems Manager at Arrow Electronics explained: “Our large capital investment in our global treasury systems includes global integration with a dozen ERPs, multi-year consultants, integration with multiple banks, and the complete treasury management suite. 90% of our spend was outside of the TMS vendor itself”.

“We pitched to bring on a TMS at the exact same time the company was going to implement the Workday Financial ERP ” said Dayna Padgett, treasury manager at global artificial intelligence and machine learning company JDA Software Group. “This allowed us to make our business case around automation of payables, daily reporting and reconciliation”.

Treasury budget can govern system selection, but Anthony Osentoski, former Head of Corporate Treasury & Insurance, APAC for chemicals group Solvay urged treasurers not to be afraid to make a pitch for a more expensive system if given the chance.

“If you have four options that meet your objectives with different price points, and you can cover your bases with the second cheapest, don’t be afraid to pitch one of the more expensive models to your CFO” Osentoski said. “You may be able to get a better budget than expected, or at worst get beaten down to an option that you’re happy with anyway”.

“When you’re evaluating systems, don’t get lost in what looks pretty, have your objectives in mind at all time and remind your steering committee of these” added Tedesco. “If you choose the option that has the best forecasting, but your biggest objective is managing your foreign currency exposure, you won’t meet the value-add you wanted”.

Implementation and integration

When a TMS implementation project begins, it is vital to have realistic expectations and remember the organisational structure when rolling out a new system.

“At implementation you may have a wish list of 70 items you want created… cut that list in half because that is all you will have time and budget to achieve” Osentoski advised. “You have to really prioritise with the implementation so you achieve the functionality you need for the greatest ROI – get this taken care of first. Few implementations are on time and on budget”.

The TMS needs to reflect the organisational structure of the company it is being embedded in. “If your reporting is regionally based, you should reflect that in your TMS before you start putting the data in” Padgett commented. “If you don’t, you are going to have to reinvent the wheel at a later date and will have much more data to manipulate to get to where you want to be”.

“When you’re trying to automate payments, the most foundational thing to ensure is that your vendor master data is the right quality to go directly from your ERP or TMS to the bank” commented Guy Simons, VP, Corporate Finance at ZF Friedrichshafen, the €36.9 billion global automotive technology company.

When treasurers use a bank portal to execute payments manually, they can face up to 50 different data fields but the system helps them on the fly with what is mandatory and valid and what isn’t. “Across your spectrum of payments, you can easily have 20 different variations of requirements for a valid payment instruction”, said Simons. “You shouldn’t underestimate the challenge when it comes to fitting all of that information in a sufficiently differentiated way in your ERP or your new treasury system. You have to map from your source system, through the middleware, to the bank. The challenge is to get your master data in shape to be delivered”.

A cautionary tale

Sometimes circumstances beyond treasury’s control can derail an implementation, as global spirits company Bacardi discovered. Having selected a SaaS TMS vendor, this tech company was then acquired by another during Bacardi’s implementation. Michelle Pereira, Senior Manager, IT Finance – Treasury & Cash at Bacardi, shared with delegates how her experience with the vendor changed at this time:

“We had the impression we would have hands on consulting when we signed up for the solution, but following the acquisition there were fewer people to help with the consulting and they all worked from home – there was nobody on site to help us”.

A newer version of the TMS was also released during Bacardi’s implementation phase, which left them with a dilemma. “The vendor told us they would no longer support the version of the TMS that we had selected” Pereira explained. “We were forced to figure out if we wanted to keep going with this new version, or look at what we had in our ERP system and how we could leverage that, with RPA and dynamic reporting”.

Three years later, Bacardi is still not using this TMS, but they are using a programme in the ERP system that they built as part of the TMS implementation. This was intended to feed the TMS GL balances, but is now being used with a cash forecasting tool built outside of the TMS.

Do it yourself

Some treasuries even take matters into their own hands and build entire solutions in-house, cutting out the TMS vendor entirely. This was the case with $3 billion software firm Citrix. They discovered that they could use the Power BI service within their existing Microsoft Office package to deliver a treasury dashboard with the reporting capabilities they required.

“We started looking at Power BI and it seemed to be a powerful solution,” Bruce Edlund, Senior Director, Assistant Treasurer at Citrix told delegates. “It has really good reporting, and also powerful data transformation capabilities without treasury having to code anything, so it seemed to be a sustainable process”.

Read a full account of how Citrix built its system here.

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