TIS EPO: Reimagining the World of Enterprise Payments

Treasury Intelligence Solutions’ (TIS) Enterprise Payment Optimization (EPO) takes a vital process, removes its complexities, and improves visibility for every participant in the chain. Stating such a goal is simple. But, as TIS explains, delivering on such a message requires some rather special thinking.

Payments sit at the heart of every single business. In short, no payments: no business. If sub-optimal payments processing equates to sub-optimal business, it should follow that optimising payments processes leads to enhanced business performance. Yet the simple concept that if payments are better managed, then cash flow and liquidity are improved, remains one that many companies have yet to fully tackle.

One of the key reasons for hesitation is perhaps that making significant improvements in payments processing can prove challenging in practice. Many large companies have invested heavily in improving their inbound paymentsor collectionsprocesses in an attempt to accelerate cash inflows.

A multitude of products catering to the ‘inbound payments’ market is on offer, many based on account-to-account or card transactions, with value-added-services and enhancements such as the ‘buy-now-pay-later’. Yet this only tackles half the story.

Despite increasing attention on cash flow management, and in particular real-time liquidity and information, the lack of corporate focus on improving outbound payment processes substantially diminishes the range of opportunities available.

To fully leverage the benefits of an enhanced payments operation, certainly in terms of managing liquidity and cash flow, the chief advantages are derived from full transparency and visibility. In practical terms, this means improving both inbound and outbound payment processes organisation-wide.

Outbound: value and power

While it may be obvious why inbound payments must be optimised, doing the same for outbound payments may be less so. For corporates seeking total payments revitalisation, the solution lies in overcoming issues created by running siloed operations.

From accounts payable to procurement, treasury, finance, and HR, payments can be facilitated organisation-wide. As changes in commerce and technology gather pace, so disconnected functions, units, systems and geographies increase risk.

Removing silos enables unfettered adoption of the latest tools to improve communication, drive creativity, boost visibility, and ultimately promote growth. Liquidity, profitability and exposure to risk – including cybercrime and fraud – can all be directly managed when visibility is extended across the organisation.

The risk element alone is a compelling case for creating a holistic view of payments. Think fraud: the greater the complexity of an operation, the more fertile a breeding ground it becomes for fraudsters.

A global firm may have many subsidiaries, a significant number of bank accounts with a variety of banks in multiple countries, and many employees with different access rights. In such a case, the probability of fraud rises exponentially.

The right technology platform – one capable of delivering a holistic view and a seamless outbound payments process – will dramatically improve the identification of and response to both potential and actual threats.

As digitisation of commerce rolls out inexorably, every company needs a 360-degree view of its business to manage such threats. Global companies with a high level of complexity need this more so than ever before. To ensure growth, they also require the ability to streamline and standardise their processes without reducing essential flexibility for the relevant organisational stakeholders.

The solution is to connect the disparate and diverse operations, closing the payments execution gaps. Despite the apparent simplicity of such a statement, the optimal level of connectivity may seem elusive for many businesses. However, for TIS clients, that circle has already been completed.

Its EPO platform serves as a hub for global outbound payment networks. It’s a structure providing each client with visibility across its people and processes, and the vast amount of data generated by every transaction. Indeed, this diverse information source enables the monitoring of, for example, policy compliance and the analysis of payment issues and exceptions. This, says TIS, is the foundation for a ‘continuous improvement loop’ for payments processing.

The platform goes beyond just delivering the information needed for companies to perform better; it also gives access to a best-of-breed product and service set that helps businesses thrive. In helping corporates to better manage their outbound payment processes, the TIS platform simultaneously enhances functionality while lowering risk. It’s a model that embraces a philosophy that drives that continuous improvement loop.

The Capability Model: A Circle of Continuous Improvement (fig.1)

Payment systems typically focus on the here and now, the goal being to execute payments in the most effective way today. But TIS takes this as a given, and raises the bar. What it offers clients is a method for maintaining long-term payment efficiency.

It knows every ‘best-of-breed’ solution has a finite lifespan because companies and the business environment in which they operate evolve. Its approach to technology is therefore based on the understanding that a technology platform is first and foremost an enabler, and that to maintain efficacy it must not only continually provide companies with the necessary functionality, but also afford the user opportunities to keep improving processes.

To this end, TIS has developed a five-step evolutionary process for technology, which it has named the Capability Model:

Figure 1 (Click image to enlarge)

Next Steps

If ever there was any doubt about focusing on outbound payments, the Capability Model underlines the value and power of doing so. However, not every organisation is at the same stage of maturity in this process.

Where exactly a company is on this continuum, and where it wishes to be, are matters for discussion and evaluation. Building the capabilities to connect, collaborate, analyse and improve outbound payments activity is precisely the aim of TIS, working with clients to evaluate their profile and vision for greater efficiency. The process TIS uses to help define and meet different needs is known as The Maturity Model.

The Maturity Model: Enterprise Payments Optimization

The Maturity Model (fig.2) is TIS’ consultative tool. It is based on data drawn from many years of experience in dealing with large and medium sized corporate customers. Indeed, with more than 180 corporates having chosen the TIS platform in the past decade, its approach to Enterprise Payment Optimization can be finely tuned to a wide spectrum of business wants and needs.

Figure 2 (Click image to enlarge)

The process is a well-guided journey, presenting a number of options that will take clients from first enabling manageability, before moving towards collaboration, and ultimately achieving agility. As enterprises grow in maturity, the threat of uncertainty, inefficiency, and reactivity decreases.

The reward for making the choices and changes through the Maturity Model is an increase in visibility, efficiency, innovation and profitability. For TIS, it is an opportunity to provide both tools and guidance based on the insights and solutions for continuous improvement that an Enterprise Payment Optimization Platform (EPOP) provides.

EPO: Bridging the Gap

As all treasurers know, in-bound cash flows create company liquidity. In turn, liquidity is used to make outbound payments – for example, payments to suppliers and staff, and to settle various treasury obligations such as foreign exchange settlements.

As we have seen above, a major challenge for global enterprises is the existence of silos of operation and information, where pockets of unshared data reduce information visibility and prevent process optimisation.

The effective implementation of strategic vision is only possible where a broad-based information feedback loop, based on organisational transparency, is allowed to flourish. Without it, implementation of that vision is based on guesswork.    

Because few organizations are truly centralized, standardization of payment processes is key. Achieving end-to-end organizational visibility is based on a full and complete set of data. With payments and the resulting bank statement information acting as the bridge between functions, EPO can help companies achieve end-to-end organisational visibility.

Prime Candidate

Given the often-fragmented enterprise resource planning (ERP) and systems landscape faced by many organisations, a holistic view of payments information via a hub is the only realistic way to gain a consolidated view, a single source of truth across all corporate departments, subsidiaries, and geographies.

Companies can achieve many of the desired benefits of end-to-end visibility by using a suitable technical platform. This is the stock-in-trade of TIS’ EPO platform. It is a global, multichannel, multi-bank connectivity ecosystem capable of streamlining and automating payments and so much more. It removes complexity while providing an array of additional benefits by collaborating with best-of-breed providers via API.

The platform is built on a solid foundation of connectivity to ERPs, treasury management systems (TMSs), HR and other payment input systems, as well as to financial institutions. Payment files are uploaded from these systems through plug-ins, or agents, and passed through the TIS platform to the relevant bank. TIS provides connectivity by creating and maintaining formats and connecting to banks in their preferred manner e.g., host-to-host, EBICs or through partners such as SWIFT.

Given the role of payments in keeping company ecosystems in motion, the ability to actively use payments data is essential for better decision-making throughout the organisation. Indeed, the finance function has a valuable commodity at its fingertips in the form of information stored on the platform. This data is the basis for managing cash, monitoring liquidity, engaging in cash forecasting, as well as supporting the information needs of finance, risk, compliance, and the management board.

This information can also benefit procurement, for example, during negotiations of contract terms and conditions. With full information, the importance of suppliers can be measured through the relative spend across the entire company. Managers can make better and more informed decisions by using business intelligence and data analytics, impacting both the top and the bottom line.

For the finance function, a clean master data repository is essential to manage hundreds, if not thousands, of bank accounts across various subsidiaries and geographies. Corporate treasury can store the organisation’s global bank account data in the EPOP’s bank account management (BAM) module. The activity of every listed user is tracked and traced through an immutable audit log that helps to avoid unauthorised actors abusing the system’s controls.

There is also a processing function that scans all user permissions within the platform. If any irregular configurations are identified, such as a user having the ability to review and approve their own payments, the system will generate and escalate an alert.

BAM can now drive successful collaboration between headquarters and subsidiaries, orchestrated by a strong governance process. If the company has stored data in a TMS, downloading master data can be achieved in seconds.

A Best-of-Breed Ecosystem

The TIS vision is for clients to freely operate in an open, innovative, and multi-tenant, cloud-based ecosystem, accessing a rich array of platform-based products and services. It’s a vision that is already presenting a new game-changing world capable of drawing a line under the rigid and inflexible environment imposed by some core systems.

TIS believes clients need a place where all stakeholders can collaborate and exchange information. It argues that a number of TMS suites have become little more than an aggregation of solutions attached to a central structure. While such a platform may cover multiple disciplines, it all too often provides either too much or too little functionality.

If a customer wants to optimise their payment processes and use this information to support cash forecasting only, why then, TIS argues, should it implement a TMS monolith? By helping to break down silos created by proprietary applications, TIS’ vision therefore lays the foundation for choice and best-of-breed functionality.

Its position is unequivocal. Access to company-wide, real-time data via a scalable and versatile technology platform gives decision-makers additional possibilities to analyse data. It also provides the basis for entities to take advantage of a wide range of specialised products.

With value-added-services such as fraud protection and prevention, cash forecasting, and foreign exchange (FX) hedging available, an innovative platform such as TIS’ EPOP is the antithesis of the unbending monolith it seeks to replace. Indeed, it is the basis for an evolving, single-sign-on, best-of-breed, inclusive corporate ecosystem. When cloud was in its infancy 10 years ago, TIS saw the potential and became an early adopter. Today, it believes that cloud-based, open ecosystems capable of supporting best-of-breed applications enabled by APIs will become the ‘new normal’.

TIS knows that some aspects of doing business will never change. Payments, and payment information, will remain at the heart of every organisation. But equally, TIS believes that the EPO layer is both the foundation and the enabler for every core, and enabling company function. As such, it could present the most significant reimagining of the way payments are seen – literally and figuratively – across any enterprise.