Selecting and Implementing Treasury Technology From the Corporate Perspective August 2012
Selecting and Implementing
Treasury Technology
From the Corporate Perspective
August 2012
Overview
The case for treasury technology has never been
stronger. The financial crisis and recession have
changed our global economy. The outlook for
corporate treasury has evolved as a result. Now, it
is even more imperative that treasury respond
quickly and strategically to both internal and
external stakeholders.
However, successfully selecting and implementing
a treasury technology system remains a challenge
for many corporates. Understanding the factors
that determine success will enable corporate
treasuries to realize many benefits from these
important tools as departments move toward
Treasury 3.0®. This third generation of treasury has
already started to transform the scope and
influence of treasury departments which are
becoming the financial nerve center of the
organization.
During the second quarter of 2012, Treasury
Strategies reached out to 150 corporate treasury
professionals from around the world. These
executives helped us better understand the key
success factors of treasury technology selection
and implementation.
We found that risk perspectives have altered.
Treasury technology is now an essential. Corporates
demand − and in some cases, are required − to
have current, global financial information with
sophisticated analytics and intuitive reporting. More
corporates are considering bank connectivity for
treasury technology projects, in keeping with the
variety of solution offerings from Treasury
Management System (TMS) and other technology
vendors. Good TMS tools and streamlined bank
connectivity are no longer optional.
Technology Selection
Vendor selection can be time-consuming and
confusing. It can be difficult to find meaningful
points of vendor differentiation. It is also difficult to
assess how the system will work in the corporate’s
environment.
Treasury Strategies found three key areas of
success in the selection process: strong project
leadership, a comprehensive process, and
detailed vendor demonstrations.
• Firms that combined external consultants with
internal treasury resources to lead their
selection project report the highest overall
satisfaction. 70% of companies that reported
less than satisfactory results did not use outside
resources.
• Most organizations include a business case,
Request for Proposal, vendor demonstrations
and calls to references among the steps in a
system selection project.
• Companies that used custom vendor
demonstration scripts in their selection process
report a higher satisfaction with both selection
and implementation.
Experienced outside consultants use their
knowledge of company-specific requirements to
design vendor demonstrations that showcase the
most relevant product capabilities. Tailored vendor
demonstrations are the most crucial part of a
treasury system selection.
Technology Implementation
Implementing a treasury management system is a
major undertaking, with the inevitable budget
constraints, overburdened staff and tight timelines.
Strong project management is the key driver of
success.
• Companies that used an external project
manager are markedly more satisfied with their
implementations than those that used a treasury
staff member or other internal resource to
manage the project.
• 56% of respondents who only used treasury
resources were disappointed with their
implementation results.
• Delayed timelines are the most frequent source
of implementation dissatisfaction. Overburdened
vendor resources and lack of access to internal
resources were cited frequently in low
satisfaction rankings for implementation.
• Scarcity of internal resources and access to
stakeholders during implementation occurred in
almost half of the implementations surveyed.
Good project management is critical for a good
implementation. Implementations can be
complicated and lengthy; resources from several
areas are usually involved, and missed deadlines
can be painful. All these issues underscore the need
for a project manager who really knows treasury
implementations, who can identify and solve
problems as they arise, marshal internal resources,
oversee the vendor relationship and keep the
project on track.
Treasury Technology Trends
The treasury technology landscape is active with
change; there are several trends to be aware of.
• Companies that have a TMS are glad they do. 66%
of respondents use a TMS and report that they are
satisfied, very satisfied, or extremely satisfied with
their system’s functionality.
• Firms that expect to buy new or additional
technology are most interested in Software-as-a-
Service to reduce dependency on IT support. This
trend may reflect the frustration with internal
resource scarcity noted by many implementers.
• Cash management (cash reconciliation, cash
position, forecasting) and treasury accounting are
the most in-demand functions from a new TMS.
• Bank account administration is now on the
shopping list for almost 55% of respondents.
• Use of financial risk management tools is on the
rise.
• Of respondents who have treasury technology, 60%
use a TMS, while 12% use the Treasury modules of
their ERP system (SAP, Oracle, PeopleSoft, etc.).
• The top secondary treasury platform functionality
is for FX trading. 36% of companies use this type
of platform.
• 44% of respondents expect to select/implement
some new technology in the next 18 months.
These plans include replacements for outgrown or
old systems, plus specialized functionality that bolts
onto a current system.
Methodology
The study was conducted via online questionnaire
and in-depth phone interviews during the second
quarter 2012.
Approximately 150 treasury professionals
participated in the survey. They represent corporate,
non-profit, and government entities from North
America, Europe and Asia.
4
Conclusion
The economic and regulatory environment have
altered risk perspectives and catapulted treasury to
the forefront. Treasury technology is now an essential
business tool rather than an optional commodity.
Corporates demand − and in some cases, are
required to have − current, global financial
information with sophisticated analytics and intuitive
reporting.
Difficulties that plague software selection and
implementation can be circumvented, which starts by
not taking the do-it-yourself approach.
Technology selection requires strong project
leadership, a comprehensive process, and detailed
vendor demonstrations.
Implementation demands an experienced project
manager who knows both treasury and technology
implementations. Strong project managers help
resolve problems, marshal internal resources, oversee
the vendor relationship and keep the project on track.
About Treasury Strategies, Inc.
Treasury Strategies, Inc. is the leading Treasury
consulting firm working with corporations and
financial services providers. Our experience and
thought leadership in treasury management, working
capital management, liquidity, and payments,
combined with our comprehensive view of the
market, rewards you with a unique perspective,
unparalleled insights and actionable solutions. Visit
www.TreasuryStrategies.com for more information.
For further details, please contact Laurie McCulley,
head of our Treasury Technology practice;
76%
14%
6%
3% 1%
Respondents by Region
North America Continental Europe
United Kingdom Asia
Middle East/Africa
25%
15%
32%
11%
17%
Respondents by Revenue Size
Over $10 billion $5-$10 billion
$1-$5 billion $500 million-$1 billion
$0-$500 million
© 2012 Treasury Strategies, Inc. All rights reserved.
[email protected] TreasuryStrategies.com
Chicago London New York
309 West Washington Street 13th Floor Chicago, IL 60606 +1 312.443.0840 phone
1 Northumberland Avenue Trafalgar Square London, WC2N 5BW +44 (0) 207 8725551 phone
140 Broadway 46th Floor New York, NY 10005 +1 212.208.1416 phone