Could you give me an overview of your role and responsibilities?
My role is to lead the technology team within Deloitte’s treasury advisory team. I have a team of 15, and we help our clients to select, design and implement technology solutions for their treasury functions.
We do this in two different ways. The first is more traditional: we help with the selection and implementation of treasury management systems in the market. The second, which is becoming more popular, is in the SAP S/4 transformation market, where we deploy and deliver SAP treasury S/4 solutions.
We work with a lot of our colleagues across Deloitte – particularly in the SAP space, where the focus tends to be on broader finance transformations, and on delivering solutions across things like security, fraud and general ERP reporting. When topics like treasury, cash and banking come up, we help with those solutions.
What impact has the crisis had on treasury technology implementations?
When we first went into lockdown in March, nothing really changed for the projects that were already in flight – we had a few implementation projects that were running, and they continued to run. We did then experience quite a significant slowdown once those projects tailed off, with clients feeling that they needed to look at things closer to home for a while, such as how to manage their cash. After that, treasurers began to ask how they could guard against future events like COVID-19 – and now the treasury system market is seeing that 2021 could be a big year.
When you have these fundamental changes in how businesses operate, it’s clear that treasury is the one area of the firm where you can’t afford to make a mistake, because you are looking at low-volume, high-value transactions. Clients are looking at security fraud and concerns about human error, and are thinking ‘Maybe we’ve put that off for too long.’ So they are starting to look at technology solutions – whether that means treasury management systems or other types of technology, such as cash forecasting tools.
At the same time, the business case for treasury technology investments has changed. In the past, it was always about payback – ‘If we invest this money in a new piece of treasury technology, how quickly will that pay me back?’ Now I think there has been a fundamental shift, with companies asking not what they can gain, but what they can’t afford to lose if something goes wrong.
Have you seen treasurers’ priorities shift in terms of what they are looking for in a system?
Not really. We have an accelerated RFP process that we help clients with – we’ve pre-scored the main treasury management system vendors, with those vendors’ participation, so we can sit down with clients and ask what is most important to them. If you talk about operational core treasury, most of the vendors are now pretty good: they’ve all got more mature in how they connect to banks, and how the messaging works. What I’m really looking for when I talk to clients are the differentiating factors that are non-negotiable for their specific needs, such as complex derivatives.
How do you see the TMS market evolving in the year ahead?
Vendors have to have a wide appeal, and that means shifting with large market changes – such as LIBOR transition – and moving their R&D into that area.
This year, I think there is going to be a widening gap between what I would call configurable and non-configurable systems. Fully configurable solutions are the ones where you have the ability to code and make that the system a bespoke environment for your business. It’s much more expensive, of course, and it takes much longer to implement – unlike a non-configurable system that can offer an attractive implementation timeline.
The configurable systems will probably end up appealing to any sort of fundamental market changes by offering things that are needed by everybody. In contrast, there will be a lag for the non-configurable systems, or the software-as-a-service offerings. They will have to evaluate at what point most of their clients will want something they don’t have – at which point they’ll set in motion the research to develop it.