Ron Jaradat, Content Marketing Specialist, BELLIN

How to define value propositions and objectives

Having efficient, secure and transparent treasury processes that generate added value for your organisation can be possible with a fully integrated treasury management system. How exactly is this possible and how can I prove such value? Many CFOs and treasurers ask similar questions. The answer is to create a compelling TMS business case that is structured.

How to turn stakeholders into TMS advocates

A fully integrated TMS has an impact across your entire organisation. Because the system involves so many internal and external processes, involving the necessary stakeholders from day one is vital to ensuring they support your cause. Internally, you can expect your financial department, the IT team, accounting, management and even your production/sales teams to be involved with the system.

In the realm of external stakeholders, expect auditors, banks, suppliers, customers or investors to be affected by such a system. Whether internal or external, the necessary stakeholders are a key source of information. You can find out how their existing processes can use a boost or veil of security, and start to define how a TMS can help in those fields. Department specific terminology or negative topics can be defined in this phase as well.

Security, efficiency, accuracy, control and much more

The important impact a TMS has for treasurers is on processes like banking connections, financial reporting, payment processing, cash pooling, interest and FX management and even intercompany business. For your business case, your company may stand to benefit more in one of those areas than others. This is the phase to define the weakness in your pipeline, and where the TMS helps solve it.

Generally speaking, a TMS will always add value by:

  • Enabling you to save time when collecting available data and the creation of plans and reports
  • Allowing you to dedicate this time to treasury responsibilities that generate real value
  • Enabling you to optimise your liquidity situation
  • Providing accuracy for processes and data
  • Creating global and group-wide visibility and transparency
  • Letting you control processes and payments
  • Providing protection from cybercrime and internal fraud
  • Helping you to better manage and minimise risks

Universal benefits aside the way your company is set up – for example whether you are a global corporation, have substantial intercompany trade, a complex banking landscape or if FX is an existing thorn for you – will determine how you approach both the introduction of a TMS and the writing of the TMS business case. Prioritise those topics in order of importance to your company to produce a very accurate cost-benefit analysis.

First step: analyse your existing workflows

The first step to creating a business case is to demonstrate the overall importance and utility of your department as a whole. To do this, you should define the objectives and future roles that your department holds. You should pose questions such as: “Is the financial division account- or controlling-driven? Does the department play a strategic role in influencing or guiding the activity of other departments?”

Unfortunately, you may be stuck dealing with large manual data entry workloads. This is why it is essential to document how much time is spent on operational processes like data retrieval for cash management, payment processing, and even risk management. Many companies avoid documenting and facing the truth on the amount of time that goes into these tasks. This is often an important reason companies are reluctant to introduce a new system or make changes to existing infrastructure. Not only is it costly and inefficient to pay team members to do something that is easily achievable using technology, the technology will actually produce much more reliable and error-free results. Manual processes are error-prone: all it takes is a typo when entering numbers to trigger a lengthy – and expensive – “error hunt.” In addition, the increased productivity can allow for teams to approach regulatory or compliance changes calmly.
Why should you have to put so much effort into analysing weak points? Simply because you are attempting to present a scenario that represents what you are trying to solve. Don’t forget to analyse the quality of your data and define how significant and reliable it really is. What conclusions can you draw from data that is not available in real time? What predictions and forecasts do you want to create if you cannot even rely on the accuracy of your tediously collected data? Do point out that all the work that goes into your planning and reporting is feudal if it has no sound foundation in the quality of the data. Don’t hold back: make the case that without a fully integrated TMS, your finance department will continue to rely on error-prone processes on one hand and will hardly be able to add strategic value to the business on the other hand.

Defining objectives and justifying value

Changes enforced from above are often met with resistance as management teams are ROI-driven when determining such cost decisions. When traditional and familiar workflows that include responsibilities and privileges are threatened to change, the resistance tends to be even higher. Your job is to convey how a TMS provides benefits that exceed those fears. Benefits like accurate data in real time, efficient straight-through processing, transparent and secure processes, relevant reporting with one click, plenty of time and a sound data foundation for strategic finances.

The TMS provides you with a data foundation and is effectively a prerequisite for treasury operations that create added value, for example the settlement of intercompany receivables through netting. The TMS can also serve as your platform for group-wide payments that enables you to process all payments, backed by a permissions model that ensures secure authorisation. Instead of tediously collecting account statements or having to go back and forth with banks on signatures, the TMS represents technology that takes care of these tasks securely, accurately and fast.

This way, you have the time to seize the opportunities the real-time data in your TMS presents to maximum effect. You are freed up to get started on the responsibilities that really define your department, to turn your knowledge and your expertise into quantifiable added value for your business – starting with finance supply chain-associated costs, to risk management or fraud prevention, as well as guidance for the strategic outlook of your company, including investments, the size and make-up of your services and products, or even the expansion into new markets. Because now you see what is really happening in your company, including which entity generates surplus funds or where these funds would be needed elsewhere.

Paving the way for changes

With such a business case, the last task is presenting it and convincing your CFO/stakeholders to approve such an implementation. But even if you get approval, your job is far from done. Any treasury system can only realise its full potential if company processes fit with the system. If you opt for a solution that can map your company’s profile in the system, you avoid the need to turn your entire company upside down and your employees immediately perceive changes as improvements. Research, prepare, and demo systems. It will make the world of difference in selecting the best system for your needs.