Treasury Today Country Profiles in association with Citi

Openlink

Building a treasury technology use case

The growing complexity of the corporate treasury operation in many organisations is driving demand for sophisticated treasury technology. In a recent webinar, representatives from ION Treasury, Openlink and the Strategic Treasurer came together to explain how treasury can build a strong technology use case.

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Portrait of Craig Jeffery

Craig Jeffery

Founder
Strategic Treasurer
Portrait of Jerald Seti

Jerald Seti

Vice President, Product Management
Openlink
Portrait of Philip Pettinato

Philip Pettinato

Chief Executive Officer
ION Treasury

Corporate treasury is a very different job compared to what it was a decade ago. The complexity of the role has increased markedly due to globalisation, cyber risk and rapid organic and inorganic global business growth. At the same time, there has been a significant shift in the importance of the role treasury plays within the organisation, with the department becoming ever more strategic in its outlook.

Whilst this is certainly a positive development for the profession, it has also created some challenges for treasury teams. Most notably they are expected to do a lot more with the same resources they had a decade ago – and in some cases less.

Technology has been used to solve this conundrum to some degree. However, a less-than-strategic approach to technology investment and maintenance over the years has left many organisations with a variety of disparate legacy systems. These are often complex, costly, poorly maintained and, worst of all, usually siloed. As a result, treasury teams are trying to do a complex job with only half the truth and little trust in the data with which they are working. Added to this is the multitude of operational risks that this fragmented infrastructure creates.

A solution to this challenge can be found in implementing an enterprise-grade treasury and risk management system (TRMS). Doing so can not only improve treasury performance, it can also greatly improve overall corporate performance. For instance, at a strategic level, using a TRMS can break down the technological and operational silos, not just enabling a faster flow of data but also allowing enterprise-wide access to a single source of truth.

From a tactical perspective, a TRMS can improve cash visibility. At the very least, this enables treasurers to deploy previously tied-up cash more effectively. The system can also be used to automate many manual and repetitive processes, creating optimal workflows. This alone frees up time for the team to focus on more strategic matters. Crucially, better controls further serve to more successfully mitigate the risk of fraud.

As part of any good business case, there are clear financial advantages to be considered too. Increased efficiency through automation offers the potential to reduce or redeploy headcount (the latter often to more value-added tasks). Having a single system also lowers overall IT spend – if the solution is hosted in the cloud then the vendor assumes responsibility for maintenance and updates (the user always benefitting from the latest iteration). The relative cost of a TRMS has fallen significantly in recent years, even as it has become notably more configurable to the needs of treasury departments of all shapes and sizes.

Treasury still needs to sell the TRMS to the purse-holders in the company. Despite the increasingly obvious benefits, this remains a challenge for many teams. To be able to make its case effectively, treasury needs to consider two key elements: the strategic rationale and the return on investment (ROI). This process demands an acute understanding of the businesses objectives and the capacity to link the benefits of the TRMS directly to these. In essence, treasury must be able to answer the simple yet inevitable question: where is the value from investing in treasury technology?

To help treasury teams answer this question with utmost conviction, Ion Treasury, Openlink and the Strategic Treasurer have joined forces to build an ROI calculator. This enables treasury teams to clearly and precisely demonstrate the value a system can offer the organisation. More than just showing the immediate ROI, the calculator highlights the long-term ROI that such a system can offer, reflecting the fact that a TRMS is a technology investment for the entire company, not a technology expense for one department.

As the business grows and the demands on treasury time and knowledge increase, the value of that investment will ultimately be self-evident. Until then, building a robust business-case should be seen as a treasury priority.

If you missed the webinar and would like to hear the full recording:

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