Building a case

Published: Oct 2020

Having understood what needs to change within treasury, and why it needs to change, this phase is about finding out about the available solutions, the benefits of them, issues that may be faced in implementation, suitable internal and external partners, and the refinement of goals to something practicable and realistic.

Kathryn Outlaw

Vice President, Global Transaction Services
Bank of America logo

As sustainability has become an important priority for corporations, treasury departments are being tasked with driving their organisation’s overall environmental, social and governance (ESG) strategy. Once ESG goals are identified, treasurers must engage in a fact-finding mission to assess and understand potential solutions.

Identify your partner

A good resource for identifying available solutions and best practices is a banking partner who has experience with establishing its own commitments to sustainable business practices. The experience and knowledge of implementing ESG programmes can inform and direct strategies such as determining the appropriate solutions and potential costs.

Additionally, an ESG-committed banking partner can help understand any expected issues that may be faced in implementation, as well as how the new solution will impact day-to-day operations.

Identify potential solutions

First, the treasury team will identify possible solutions, consulting with their banking partner. For example, if the objective is to reduce paper and increase digitisation, multiple digital payment methods can be considered. Alternatively, treasurers can look into sustainable investments or set up a virtual corporate card programme to reduce plastic. It may be the case that implementing multiple solutions together achieves the treasury team’s as well as the broader organisation’s objectives.

Secondly, treasurers will work with partners to understand the benefits and costs of the possible solutions. If the treasury team is considering implementing a digital payment method, the per-transaction cost may be cheaper than printing and mailing checks. However, there may be an upfront cost to implementing this operational change. All impacted stakeholders, including operations and procurement, should be included in the discussion so they can highlight any expected benefits and costs.

Recognise the challenges

After deciding upon a proposed solution, treasurers must then identify any potential issues or challenges of implementing the solution by consulting with both external and internal partners. As an example, a company may face key technological hurdles from having to make necessary changes to systems to accommodate new payment methods. Another potential hurdle can come from receiving project approval. Treasury needs to understand the costs and benefits of the solution in order to convince their management that it’s a worthwhile project to commit funding and resources to. The treasury team will also benefit from including all internal stakeholders and impacted departments in the evaluation process, responding to any concerns and balancing their potentially conflicting priorities.

Further, timelines for implementing may vary given the size of the company; smaller companies tend to be more nimble and faster to market than larger companies.

Understand the impact

Treasury teams must also understand how implementing new solutions will impact day-to-day operations and ensure all internal stakeholders are included early in the process. For example, implementing a new sustainable supply chain finance programme requires multiple changes to a company’s procurement process. If a treasury team wants to implement a virtual corporate card programme, there will be changes to the company’s operations.

At Bank of America, we provide educational adoption materials that can be shared with various departments throughout the company to help our clients understand how new solutions work, and to answer frequently asked questions.

The most important thing to remember is that implementing new systems and processes takes time. They are significant changes that impact a lot of departments within an organisation – not just treasury. The key to success is including representatives from these departments in the process early on, and also including a buffer in the timeline, in order to manage expectations.

Once treasury fully understands the costs and benefits of potential solutions and what it will require to implement those solutions (including impacts to day-to-day operations), it can set realistic goals and timelines for what it will achieve and when, in order to become more sustainable.

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