In many ways, Covid-19 has been the ultimate test for treasury teams and their technology. With the spotlight firmly on treasury management systems (TMSs), treasurers are asking whether they have the best tech for the job – in a remote-working environment where instant access to ‘decision-ready’ data is critical. Is there a better TMS out there? Is one treasury system still really the optimal solution? Would multiple best-of-breed providers offer more functionality at reduced cost? And where do enterprise resource planning systems (ERPs) fit in a modern treasury? We answer these questions and more.
Since they were introduced in the 1990s, TMSs have come a very long way. Modern TMSs are no longer reserved for the very largest corporates. Vendors have also been quick to adopt technologies such as cloud computing, application programming interfaces (APIs), and artificial intelligence (AI) in a bid to keep pace with treasurers’ evolving needs – and their increasingly strategic role within the organisation.
But with Covid-19, treasury’s technology requirements have been ramped up in an extremely short period of time. And TMSs, along with Excel and ERPs, have come under close scrutiny, with certain functionalities becoming – quite literally – make or break for organisations.
Christian Mnich Vice President, Head of Solution Management, Treasury and Working Capital Management, LOB Finance, SAP SE
The first and most obvious need for many treasuries was the ability to access systems from home, due to global lockdown. As Simon Shorthose, Managing Director, Kyriba Northern Europe, explains: “We have seen a growing demand for easy access to systems 24x7. Treasurers have come under more pressure to deliver information, often daily to their CFO and board on cash visibility and liquidity. Forecasting, fraud, risk management, as well as ‘real-time treasury’, are most in demand. This all aligns to having greater automation of processes, deep integration across the treasury and financial processes and a greater focus on liquidity and future forecasting. Platforms that are agile to deploy and change, have the breadth of capability and process automation and data insight are leading the way in terms of delivering value.”
Hans-Gerd Riediger, Director Solution Success - Treasury & Cash Visibility, Serrala, agrees that cash visibility has certainly moved up the treasurer’s agenda again. “With demand, sales and production going down in many industries, it has become paramount for companies to know their exact current and expected future cash situation. Before the crisis, cash was readily available, so companies deprioritised cash management, as well as cash forecasting skills and systems. This has impacted their ability to get quick visibility into cash flows now, when they need it most,” he says. Indeed, a survey conducted by Serrala in March and April 2020 confirms this view, as 42% of respondents said that their current cash management tools and processes didn’t meet their needs. “Now that many teams are working remotely, treasurers must make technology improvements quickly and wisely if they want to maintain consistent cash flow,” advises Riediger.
Meanwhile, Ashley Pater, Chief Product Officer, GTreasury, has seen the pandemic increase treasurers’ focus around a few key functional areas – and one of the most critical has been forecasting. “While forecasting is central to myriad treasury processes, for many it’s often a particularly time-consuming task that can require multiple tools. Forecasting frequency is typically quarterly or monthly. However, with the impact of Covid-19 we’re seeing treasurers performing weekly – and in some cases even daily – forecasting. These treasurers need the right strategy, the right tools, and streamlined data access to keep up with these duties,” she notes.
Box 1: The Ultimate TMS: A Wish list
To provide more insight into future developments, we asked our experts to offer their views on what the ultimate TMS might look like from a treasurer’s perspective.
Martin Bellin, CEO, BELLIN, has a clear vision: “The ideal system would be one that understands the treasurer’s needs, has learned which goals they have set and makes, or at least proposes, the respective steps to get there. Many more tasks in cash management would be automated, including bank transfers around the world, as well as the ability to connect or disconnect banks and bank accounts, just as treasurers would integrate another email account into Outlook,” he says. “The ultimate TMS would also come with strong payment capabilities, including not just the ability to transmit payment orders but also the option to send and receive information connected to the payment. Such an ideal TMS would act as an intermediary between the financial industry and the corporate treasury.”
Wiley also foresees more integrated, user-friendly, capabilities being key. “The TMS of the past was judged strictly on depth of functionality, which has led to considerations such as deployment and ease of use being left behind. The TMS of the future will be able to do more than simply improve and automate treasury operations - it will accelerate and improve decision-making capabilities at the CFO and Treasurer level. It will also be much easier to implement and maintain. Technology providers that can provide integrated solutions across receivables, treasury, and payables ecosystems will be especially sought after.”
Treasury Xpress’ Kantrowitz, meanwhile, believes the ultimate TMS of today and tomorrow should deliver an open and frictionless experience in the areas of onboarding, integration, bank connectivity and access to functional enhancements. “This type of technology experience is what will make it possible for treasury teams to leverage the TMS for more treasury responsibilities such as cash positioning, forecasting, reconciliation, payments, loan and debt management, risk management, trade execution, investment decisioning/management, and so forth. At the same time, the ultimate TMS also provides the ability to easily integrate and access specialised, best-of-breed technology in other non-traditional areas.” The possibilities and opportunities for treasury teams with an open and frictionless TMS such as this are endless, she believes. (We will touch more on best-of-breed later in this article).
GTreasury’s Pater agrees that treasurers seek a TMS that has an open architecture and offers a broad ecosystem of tools – as well as one that’s ready to expand and serve key functional areas that might initially be missing. Additionally, treasurers value ease of use in a TMS, she says. “The easier it is to use, the easier it is to adopt, implement, and scale”.
As for Riediger, he says the ultimate TMS should go beyond just the basics of treasury management and provide the treasurer with a truly global perspective of the cash situation. “It should provide transparency into cash across the entire company, while at the same time enable treasurers to dig into the details of a particular transaction,” he says. “Imagine an eagle. An eagle’s eye perspective is very broad, it captures a wide panorama and looks far ahead. But an eagle can also quickly pick out prey from thousands of feet away. It is the eagle’s ability to have a broad and sweeping view of information or zoom into the tiniest detail that treasurers need from the ultimate TMS.”
Another trend Pater is seeing is a higher dependency on reporting. Again, this is something that’s always been core to treasury processes. However, the ability to build specific reports and dashboards accurately reflecting key areas of Covid-19 impact monitoring within a business is more essential than ever during times of uncertainty. “Not just leadership, but also the corporate boards of directors are putting tremendous pressure on treasury teams to produce complex reports on a much more frequent basis than prior to Covid-19. Now more than ever, treasurers require flexible and easy-to-use reporting options that enable them to pull from comprehensive data sets,” she adds.
François Masquelier CEO, SimplyTREASURY
Like Shorthose, Pater notes that treasurers have also become more dependent on SaaS solutions. “This has been a trend for some time, but the pandemic and remote work have solidified the importance of SaaS. Another impact is that treasurers now require electronic signature capabilities. Historically, many treasuries have relied on hard signatures, especially in industries such as finance. With Covid-19 and remote work, most people don’t have printers or scanners in their homes, so support for electronic signatures has become a must-have.”
Alongside the changing modus operandi of the treasurer, their role is also evolving more swiftly as a result of Covid-19, says Jacqui Drew, Head of Sales and Account Management, ION Treasury, EMEA. “Throughout the pandemic, treasury teams have become even leaner. At the same time, they have a more strategic role within the company. That’s why treasurers have an increasing desire for more automation and integration. They see their TMS not only as a tool to fulfil their core requirements in cash and risk management, but as a central hub for all financial data and strategic insight hosted in the cloud. They are looking to be a part of a larger community to learn from best practices applied in similar industries and leverage market insights to make informed decisions.”
The new environment is also calling for more insightful data, says Drew. “Today, treasurers are asked to provide more detailed information on cash and risk positions for executive decision-making.” And the way these decisions are made is also shifting as a result of Covid-19. Tracy Kantrowitz, Chief Marketing Officer, TreasuryXpress, comments: “Pre-Covid, a treasurer could sit with their team and review spreadsheets and data together to come to an understanding of their positions. Now, much of this interaction has disappeared and treasurers must be able to independently and more easily access data that is more ‘decision-ready’. Dynamic data, via dashboards and automated reports, are now vital requirements for treasury teams.”
Box 2: What does best-of-breed look like?
In the context of the evolving financial solutions ecosystem, Jörg Wiemer, Co-Founder and Chief Strategy Officer at TIS, believes that there are two important dimensions to ‘best-of-breed’. First, the solution itself has to be the best at solving the problems of its target customers. Second, the solution must be capable of working well with other solutions in the ecosystem via data interoperability.
But what defines ‘being the best’ in this context? According to Wiemer:
As for what defines ‘working well with others’, Wiemer believes it is important that:
Whether a standalone TMS can always provide the right information here seems to be up for debate, however. Christian Mnich, Vice President, Head of Solution Management, Treasury and Working Capital Management, LOB Finance, SAP SE, comments: “Almost all treasurers have identified the fact that they need more operational data from the business to identify a liquidity gap. This includes data from accounts payable [AP] and accounts receivable [AR], sales, procurement, expense management etc. Many of our clients see the value of an ERP system, not an isolated TMS in these times.”
Martin Bellin CEO, BELLIN
Having a TMS that can easily integrate with other systems will therefore be more important going forward. Further influencing TMS requirements, says Kantrowitz, is the need to minimise ‘human’ or physical services and leverage more digital services provided by the TMS provider to support implementation, upgrades and enhancements, and also solution consulting services.
“In-person consulting and project management has seen a significant decline as treasury teams require more support remotely. If they have not done so already, TMS providers will need to invest in upgrading their platforms to be more ‘digitally native’,” she says. To be a digitally native software, it needs to be inherently built to remove human intervention from the client onboarding and implementation processes. “In-software or in-app examples of this would be more options for automated bank connectivity and ERP integrations through APIs, leveraging AI or machine learning to handle version updates. Of course, where human intervention cannot be eliminated, such as the project management aspect of the implementation process, digital project management tools must be invested in.”
Imad Ben Mariem, President, DataLog Finance, agrees on the increasing need for immediate online support. He has also seen “mobile workflows and payments capabilities being used more frequently in the working-from-home environment”. And it is likely that more vendors will be upgrading their mobile offerings in the months ahead. ION Treasury’s Drew confirms this: “Treasurers need access to key financial information anytime, anywhere, on any device. As they often need to act fast, they need to be able to see cash positions, approve payments, and run reports on the go. At ION, we offer and continuously invest in our cloud TMS and mobile applications.
A new dawn
It appears, then, that Covid-19 is already driving positive changes in the TMS world. But will this be enough for treasurers to be satisfied with their tech, or is there a storm brewing in the future of TMSs?
Ashley Pater Chief Product Officer, GTreasury
Answering this question, François Masquelier, CEO, SimplyTREASURY, describes TMSs as “the vital tools we love to hate”. He believes that, although TMSs have now been around for a long time, many treasurers are not entirely happy with what they have. “Often there is a frustrating chasm between what is expected from a solution and what it actually offers.”
Moreover, Masquelier feels that a certain technological level in treasury systems has been reached. “We are in an innovation lull – probably because today’s systems are almost all cloud-based in the form of SaaS solutions. Today’s TMS providers seem to have chosen to produce a standardised system with a limited range of functionalities, since too many functionalities cannibalise other products, and are expensive in terms of development and maintenance,” he notes. (See the matrix at the start of this article to compare TMS offerings by functionality – although, as stated, functionality is not the be-all and end-all).
Bellin could not agree more. “Many systems are stuck in the past, built on outdated technology or still following outdated concepts. The biggest technological challenge is keeping up with the speed of change we experience around us,” he says. “We have moved away from on-site and fat-client technology to cloud-based systems. Community knowledge and experience are powerful data pools and can influence decisions. They should be made available within a TMS. The general philosophy behind technology needs to change. Instead of simply providing a system, vendors have to focus on results and providing answers through a combination of the required technology, knowledge and service level. The customer pays for the value created, not for the software installed.”
SAP’s Mnich agrees that there is more to be done to bring TMSs up to speed. “Most TMS vendors are consolidating cash/treasury data without owning the business transactions behind the cash flows. This set-up leads to limitations. Integrated systems can provide advantages around that. This is not limited to systems, it includes processes like Record to Report, Invoice to Cash and Procure to Pay.”
Also on the same page as Mnich regarding the need for more functional TMSs, Serrala’s Riediger outlines three key areas for improvement to current offerings:
Box 3: Preparing people for new technology
The pressure on treasurers to deliver more, or better-packaged, information is growing. There is also more pressure in terms of equipment cost, so strategies are having to change and solutions may follow suit to fulfil requirements around reports and regulatory compliance. “In order to boost productivity and quality, it is vital to make use of IT developments, but that requires creativity and talent within treasuries,” says Masquelier.
To make the most of any new system, or combination of systems, therefore, treasurers need to think about recruiting differently in the future, he advises. “Technology should be regarded as an opportunity to review the treasurer’s role and its likely future, but the difficulty lies in adequately assessing the technology and maximising existing resources.”
Masquelier also believes that to revolutionise the treasury function, it is vital to have a clear treasury IT strategy that must take account of cyber-attacks, fraud, tighter regulation, reinforcement of internal controls, greater centralisation and a disrupted economic environment. Treasurers are going to have to become ‘data consumers’ – which means data analytics skills will be more and more sought after in treasury recruitment.
Elsewhere, DataLog Finance’s Ben Mariem sees a need for vendors to adapt their solution to the treasurer’s organisation, rather than the other way round. “Customisation without any further specific development is key to that,” he says. “With proper training, the treasurer and their team can be autonomous enough to implement at least a significant part of this customisation themselves.” This is likely to be an increasing trend over the months ahead.
Looking further into the future, Steve Wiley, Vice President, Treasury Solutions, FIS, believes: “Next generation technology, such as artificial intelligence, API, and robotic process automation, will enable treasury systems to move to the next level. TMS vendors will continue simplifying platform delivery and maintenance to help companies further reduce IT footprints and leverage hard dollar cost savings. We believe there will be huge opportunities for treasury departments as a result of recent innovation from providers like FIS. The vendor ecosystem – e.g. does a vendor ‘just’ provide niche technology or can a vendor partner with a corporate treasury on a larger scale – will play an even bigger role.”
But what might this ‘next level’ that Wiley mentions look like? What tangible innovations do vendors have in the pipeline for the next couple of years – and how will treasurers benefit?
TMSs in 2021
Over the next 12 to 24 months, TreasuryXpress’ Kantrowitz believes there will be a tremendous amount of innovation in incorporating more AI and machine learning into solutions. And of course, API development will continue to be a focus, she says. Riediger agrees, adding that machine learning and AI will enable TMSs to understand historical data and propose different simulations and new scenarios that will power well-founded predictive analytics in the future.
Kantrowitz also believes we will see a complete transformation in actual user experiences (UXs), which she informally calls ‘Covid-driven’ UX transformation. Here, she refers back to the point made earlier about treasury and finance professionals working more independently from home – without the on-site support of colleagues or consultants. Because of this, TMS providers will need to rethink their UX, and focus on more self-service workflows to make it easier for users to navigate and manage the solution.
Jacqui Drew Head of Sales and Account Management, ION Treasury, EMEA
“By simplifying the UX, we can make users more self-sufficient and confident when using technology,” she notes. For TreasuryXpress, this has been a founding strategic focus and one that they will continue to build upon over the coming months: “Even with our current user-friendly approach, we are continuing to advance our workflows and processes to be more wizard-driven, simplified workflows that do not require a lot of physical support. Our goal is to extend personal technology experiences to the business user.”
Like Kantrowitz and Riediger, FIS’ Wiley also expects to see stronger offerings in the area of AI. He also highlights developments in robotics and real-time treasury, strengthening the full spectrum of functional capabilities from basic cash management to complex risk management. “The cash forecast is an area ripe for greater standardisation in best practice through improved technology. Preventative and detective security will also be strengthened through AI,” he says. In addition, Wiley believes the Open Banking revolution will accelerate the opportunity for real-time treasury through improved connectivity models such as API and SWIFT gpi.
Pater agrees with the importance of incorporating machine learning and AI solutions, and notes that AI-driven cash forecasting was released in the GTreasury TMS earlier this year. “We have a solid roadmap in place to continue to innovate and expand our AI capabilities in our TMS to meet our customers’ requirements,” she says. As for SWIFT gpi, Pater notes that treasurers have a particularly keen demand for faster payments processes. That demand, she says, is accelerating development of real-time payments – an emerging but undoubtedly high-potential technology. “I believe we can expect meaningful advances in real-time payments as soon as this year,” Pater predicts.
Riediger also believes that payments is one area where TMS offerings will evolve in the near future. “Digitising payments processes not only makes them faster, but it also makes it easier to improve them using new capabilities available to treasurers.”
He explains that fraud detection and compliance tasks, for example, can be intelligently automated, so that payments are more secure and controlled. Adding payment service providers (PSPs) is also an option. “For customers, PSPs are fast, convenient payment options. For treasurers, PSPs ensure that payments are received as quickly as possible, incur lower transaction fees and are much easier to apply to the correct customer,” he comments.
Simon Shorthose General Manager, Kyriba Northern Europe
It is easy to get caught up in the excitement of new TMS developments, but it’s important to also remember the reality of the treasurer’s operating environment. Drew points out that in addition to connectivity, mobile technology, fraud detection, and machine learning, TMS providers also need to be on top of regulatory change. “The transition away from the inter-bank offered rate [IBOR] to alternative risk-free rates impacts corporates significantly and a lot more than many companies think. At ION, we build our solutions to cater to the complex and evolving IBOR requirements and guide our customers through their transition journey,” she notes.
Equally important, says Kyriba’s Shorthose, is adapting systems to the changing role of the treasurer – towards becoming the Chief Liquidity Officer. With the right tools, treasury can become a more strategic function going well beyond the previous mandate of the treasurer, he says, into an area he calls ‘Active Liquidity Management’. This, he says, can be thought of as a remit to actively identify and orchestrate all sources of liquidity in the business, while protecting the lifeblood of the organisation – cash – in good times and in crises.
To assist in this endeavour, Shorthose believes treasurers will need tech tools, automated processes and data insight that offer “precise forecasting of inflows and payments from inbound customers, identification and mitigation of risks, improved controls and fraud prevention across the enterprise – as well as innovative ways to preserve operating cash flow”. Performance should be optimised through connectivity, APIs and 24-hour availability, he says, and managed globally, with a 360° perspective on liquidity. But he cautions that as well as innovative technology, “treasury is moving to be part of the heart of finance and will add increasing value to the broader financial decision making.”
Jörg Wiemer Co-Founder and Chief Strategy Officer, TIS
Such a fundamental shift will take time to achieve, given the mindset changes required by treasurers and their wider organisation, but it is an interesting concept nonetheless – and certainly one to watch. Meanwhile, Ben Mariem points to a more near-term foundational shift in the TMS market. “A major trend we are seeing is connecting TMS offerings to external web services/APIs, whether it be market data providers, execution platforms, or fintech services. A TMS that is connected with external solutions, as well as with other internal software solutions, will bring a more seamless and useful experience to the treasurer,” he says.
On this note, Kantrowitz believes we will continue to see collaborative innovation with fintech players that can complement TMS functionality and enhance treasury’s position within the organisation. “We are seeing more and more treasury teams reverting back to ‘best-of-breed’ solutions and developing digital treasury strategies that enable them to create a user- and budget-friendly ecosystem to handle their unique requirements.” The TMS will become the centre of the ecosystem, she says, and systems will be integrated easily and frictionlessly via APIs.
This is an extremely important trend – and one that could leave treasurers asking whether an all-in-one TMS is actually the best solution for their needs. So how does best-of-breed work and what might this new treasury technology ecosystem look like?
The new best-of-breed approach
Kantrowitz explains that the concept of ‘all-in-one’ TMS is “appealing, but born out of generational necessity”. In the early 2000s and 2010s, the trend in the market was for an ‘all-in-one’ TMS because integration with best-of-breed solutions was costly and technologically resource consuming, she explains. TMS vendors attempted to satisfy this need at the time and invested heavily in all-in-one platforms that were intended to cover the breadth of the treasury function. However, while core treasury responsibilities remain unchanged, the expanse and structure of the treasury function has evolved exponentially. As a result, all-in-one’ TMSs are simply not scalable and cannot react nimbly to changing needs, she believes.
Imad Ben Mariem President, DataLog Finance
“While aspirational, in today’s environment, it is just not necessary or economic to think that a single financial system can do everything,” she continues. “Technology overall is more open and economic, and it is no longer cost-prohibitive to build a best-of-breed ecosystem. The treasury function, particularly in today’s environment, is extremely dynamic and any ‘all-in-one’ TMS just becomes so complex and expensive to manage that enhancing these platforms is nearly impossible, resulting in a static and stagnant solution that cannot keep pace with treasury needs.”
Whether or not treasurers embrace this new best-of-breed ecosystem depends on the respective offering, the architecture of the system and the mindset of the company, says Bellin. “If there is an advantage to using multiple systems and if the value is higher than using just one single system, I would go for multiple systems,” he adds.
Not everyone agrees. According to Ben Mariem, “All treasurers look for a unique embedded TMS. Treasurers are really tired of different systems with interfaces that never work. A unique system is really the solution for the future.” Mnich also has reservations. “We talk to a lot of CFOs who are driving a holistic transformation of their organisation or even are part of a larger company-wide digital transformation. In these cases, they are looking to get powerful integrated systems throughout their entire value chain,” he says. “They realise that, to benefit from new technologies like artificial intelligence or predictive analytics, they need data to be easily accessible, centralised and harmonised. Using multiple systems makes it much harder for them to reach the level of automation and prediction they need to be effective in their decision-making.”
Additionally, Riediger points out that while multiple specialised systems can provide organisations with bespoke features, they can also add a lot of complexity. “They have to be maintained and updated regularly by the IT department; you have to manage the different system licensing and support contracts and terms; you also have to manage multiple log-ins to the different systems. While cloud solutions can eliminate much of the IT burden, it makes a lot of sense for treasurers to pursue an integrated approach for TMS systems to reduce the complexity of the system environment,” he says.
This doesn’t mean choosing only one system, he clarifies, but companies should consider consolidating systems wherever possible. He believes it is possible to forego specialised features that don’t deliver real value to the organisation. “It will save a lot of time and cost if you can fulfil your requirements from a single solution. Think of it like a puzzle: a TMS would consist of different pieces that fit seamlessly together to make a complete picture. Pick and choose the core features you need, for example cash management and credit facilities. Then, evolve the solution by adding further pieces, for example financial instruments, payments, reconciliation, eBAM [electronic bank account management] and so forth, from the same integrated toolkit,” says Riediger.
The advantage of this approach is that you have the TMS functionality you need, when you need it, while also minimising the complexity of the underlying systems and potentially any risk-prone interfaces, he explains. “Taking a holistic, or puzzle-like, view of TMS systems and system integration is the best way for companies to provide treasurers with access to valuable data from other teams and enable enhanced cash visibility,” he believes.
Finding the middle ground
Masquelier is in favour of “a compromise that is some sort of mixed solution between best-of-breeds for different tasks – no one, not even the biggest systems provider, can adequately cover the full range of treasury needs,” he says. That said, with mergers in the market – and partnerships between companies such as BELLIN and Coupa – integration between providers appears to be a coming trend, Masquelier believes (see box 4 for his other predictions in the TMS space). This could potentially bring the best of both worlds – multiple specialist functionalities under one roof.
Box 4: Eight TMS market trends to watch
While it is difficult to clearly predict the future of TMSs, Masquelier foresees:
Explaining how best-of-breed might work alongside a TMS, Pater quips: “You can have your cake and eat it too!” The TMS should be the core system that accommodates the majority of treasurers’ fundamental business workflows. However, a TMS with an open architecture enables users to connect to their broader ecosystem, while consolidating data, she says. “The GTreasury TMS is designed as the core system that allows treasurers to leverage other systems to accommodate business activities – such as MMF [money market fund] providers, bank fee analysis, FX workflows, commodities, forecasting, and so on.”
Hans-Gerd Riediger Director Solution Success - Treasury and Cash Visibility, Serrala
Indeed, Drew thinks that the future is being able to offer a complete solution to a customer based on their requirements today, with subsequent scalability either within that solution or to other more appropriate solutions within the portfolio. “Advances in API technology will help seamlessly integrate TMS with dealing platforms, confirmation systems, ERP systems, and bank solutions.”
FIS’ Wiley agrees with the sentiment around best-of-breed under a single technology provider ‘roof’, stating that treasurers will likely move away from looking for a ‘system,’ to looking for a provider who can efficiently support the entire corporate financial ecosystem, ie treasury payments and receivables through technology and managed services. He comments: “We believe treasury departments will look at system providers to not only run but also to operate the system and related activities, outsourcing tasks such as bank connectivity, interface management and more. This will enable treasury departments to retain only business-critical functions in-house. For example, here at FIS we provide the full spectrum of corporate finance and treasury needs, from receivables to payments, and everything in between – short-term cash management, reconciliation, treasury, managed bank connectivity – all overlaid with services capacity to offer customers outsourcing opportunities. This gives the corporate ‘one throat to choke’ for all their technological needs, and is a much stronger and simpler solution suite to deliver, integrate, and maintain.”
And Bellin points out that, in the future, we are not going to talk about ‘systems’ but about ‘platforms’. These platforms will be able to connect to multiple players in the market, he says, including banks, trading platforms, trade repositories, market data providers and so on. “There are so many of these players and the list is getting longer every month. Intelligent technology should be able to control all of them and meet data requirements, no matter how many ‘systems’ or ‘parties’ are involved,” he adds.
As an aside, it is worth noting here that some TMS providers believe they are already well on the road to delivering this. Kantrowitz, for example, says that the founding vision of TreasuryXpress, established by former Fortune 500 treasurer Anis Rahal, was to build a solution that would be the centre or anchor of the treasury ecosystem that could easily and openly connect to specialist and niche technologies via open API. This means that the complexity of dealing with specialist providers is handled by TreasuryXpress, while the treasurer garners the benefits from a single provider.
Box 5: The right TMS: selection and implementation
For those treasurers still looking for an all-in-one TMS, or those wanting a TMS to sit at the centre of a best-of-breed ecosystem, our experts offer sound advice around choosing and implementing the right TMS.
Pater believes it is critical to understand your current needs and your future needs. “You want a TMS you’ll grow into, not out of. Consider your company needs and the core drivers for selecting a TMS to begin with. Outline your key objectives, which might include automation, real-time payments, optimising liquidity, improved funding access, etc. Be aware of the fact that your team might need to go through a treasury transformation process as part of your TMS implementation project. Be sure to include those who will use the system daily as part of the evaluation process – their buy-in is critical.”
And when it comes to selecting a TMS vendor, she advises making sure it’s a stable company with a strong track record within the industry. Also, verify that their focus and strategies align with yours, and that they’re making the right service and product investments. “Look at the existing user community your business would fit into, and confirm that the provider is responsive to those clients’ needs. Confirm that the technology stack is stable and scalable. Most importantly, make sure the provider is equipped to help not only with day-to-day operational and tactical needs but also with strategic alignment and growth,” she adds.
Wiley also highlights the need to consider vendor stability, experience, and security profile. “We often see corporates hyper-focused on minor product aspects or bells and whistles, while not considering the long-term viability and financial stability of the partner. With the globally uncertain market conditions, corporates should weigh non-functional areas such as vendor stability and counterparty risk much higher.”
Shorthose takes this one step further: “Do not look for a system but for a partner who can support you to achieve your evolving goals now and in the future, and deliver long term scalability, partnership and time to value.” He also advises building a vision of where you want to get to, rather than a point-solution, and ensuring you do not get caught in the customisation trap which reduces agility and ability to meet the changes in your business. “In the short term, do invest in SaaS systems and intelligent forecasts which are key for business survival. In the medium term, pay attention to data management and business intelligence so you can make more informed future decisions and select a solution that will enable you to evolve towards a complete and dynamic view on your liquidities and deliver information to your C-suite in times of crises and beyond,” he adds.
Still focusing on the vendor, Riediger highlights the need to choose a TMS provider that has proven to be sustainable – and that pursues “constant development and innovation to ensure that the solutions will remain relevant and cutting edge in the years to come”. As for the solution itself, he recommends opting for a tool that “enables you to play smarter, not harder”. He advises looking for easy integration with your other systems to ensure smooth processes, high-quality data, transparency and a single log-in. Flexibility and scalability to meet your changing requirements are also key, as are innovative features to help you get ahead in terms of digitisation and automation.
Mnich keeps it brief, saying: “Look to your business operations and the units you are servicing with your team. This will allow you to think about the best fitting system.” Ben Mariem is equally succinct: “Watch carefully for run and build: both are key to success in a TMS transformation project!” While Bellin adds: “If you feel that the provider understands your needs and has answers to your challenges, you’re in the right place. But don’t lose sight of the overall picture. It is technology, vision, service and know-how that need to come together to ensure that your decision is still the right one five years from now.”
Drew, meanwhile, recommends investing time in a workshop on your use cases instead of preparing pages and pages of request-for-proposal (RFP) questions. “Spending time with a provider helps you understand their deployment and support model. It helps you gain certainty on project scope, implementation timeline, deployment teams, and costs,” she says. Giving consideration to the desired end state of your treasury organisation and finding out how the provider can support you on your journey is also critical. “Think even further out into the future. Look for a long-term partner that is able to keep you up to date with new market and regulatory requirements and wants your business to succeed,” she says.
Look for multi-tenanted solutions, is the advice of Masquelier. “The single-tenant solution has allowed the specific configuration and development of the most suitable solution for each client, but this is starting to disappear in favour of multi-tenant solutions preconfigured in terms of functionalities and hosted and maintained on the vendor’s cloud, where each client uses the same version of the software. Prices and deployment time will be lower as a result, but treasurers will have to adapt to this instead of adapting the system according to their individual ways of working.”
The final word here goes to Kantrowitz, who counsels: “Whether you already have a system or are implementing one, it is important that you take advantage of the innovations available to you. As such, remember to adapt your TMS once it is chosen and implemented – do not neglect it.”
This seems like a sensible approach, and Bellin’s vision of ‘platforms’ makes complete sense. Nevertheless, anecdotal evidence suggests that some brave treasurers may look to build a best-of-breed ecosystem without a TMS – potentially plugging specialist solutions into an ERP instead, or building a customised ecosystem using business intelligence software to aggregate data from different tech specialists. With this in mind, we are seeing more best-of-breed providers, such as TIS, collaborating with each other, in order to make integration – and creation of a best-of-breed ecosystem – easier for users.
Steve Wiley Vice President, Treasury Solutions, FIS
In January 2020, for example, TIS signed a partnership agreement with Analyst to co-sell their respective best-of-breed cash management solutions. The combined cloud portfolio of TIS’ payment solutions and Analyst’s treasury workflow provides a seamless payment experience through connectivity to more than 10,000 banks. It also provides flexibility in global liquidity reporting and cash forecasting, as well as other treasury processes. Again, this kind of collaboration is a trend we are likely to see more of in the months ahead.
What lies ahead
At this point in time, with the pandemic still in full swing and a second wave being predicted, it is hard to tell quite how quickly these trends in the TMS market will move. And for many treasurers, now may not be the best time to experiment with the new best-of-breed approach. For others, however, it could be the ideal moment – especially those starting from scratch.
Masquelier urges caution over making any quick decisions, however. “The choice of the ideal treasury architecture is complex and has to be undertaken on a case-by-case basis, choosing the right mix of different modules, whether from a single provider or a combination of specialists in their particular fields. The smarter strategy of some TMS vendors will help us reposition treasury to a higher place in the finance department, and the decisions you make will have major, long-lasting impacts on your function, so be prepared and think very carefully before making your choice.”
Although individual treasury tech decisions may be complex, what is clear is that digital disruption is coming and treasury must adapt. As Masquelier eloquently concludes: “Everything will hinge on the treasurer’s appetite and capacity for change. Technology will be the future saviour, at least for those adept at mastering it. Only technology can lighten the workload and leave treasurers free to focus on analysis and strategy – and over the next five years, the biggest challenge for treasurers will lie in this capacity to evolve gradually towards digitisation, in whichever form works best for their organisation.”
Box 6: What treasurers expect from their TMS vendors: The 10 commandments
