Rolling out treasury systems – A frequently underestimated challenge

Rolling out treasury systems

Source: KPMG Corporate Treasury News, Edition 45, July 2015


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Virtually every global player these days uses (or is considering introducing) a treasury management system (TMS) from a provider of standard solutions. One consequence of this strategy, however, is that optimizing the use of the TMS depends not only on the technical requirements placed on the system by the treasury function, but also on the company's objectives in terms of its international footprint, the scope and number of the various processes the system must model, and local requirements with regard to system roll-out. The resultant planning and implementation challenges should not be underestimated.

TMS installations deliver suitable functionality, operational availability and performance to meet the treasury's growing needs for efficiency, transparency and methodological competence. In recent years in particular, constant growth in organizations and operations across different countries, regions and time zones has seen more and more European companies also establish treasury centers in the North American Free Trade Area and northeastern Asia. An increasing number of tasks are therefore being handled by local treasury staff in these regions, and that usually creates the need for integration in or at least links to the existing treasury system landscape.

Especially when setting up a global treasury management platform, integrating a large number of different systems and tools, interfaces and information sources is only one aspect of the work. This aspect alone involves replacing the local processes and IT solutions that predated the roll-out with standardized processes and system functionality. The resultant challenges are themselves often tantamount to a new TMS launch. Differences between countries and the fact that roll-out in one country can often not be mapped 1:1 onto other countries create additional headaches for the units involved: Many standard processes do not have the required granularity (or are lacking entirely) and local conditions need to be assessed. At the same time, the inherent dynamism of treasury activities mean that there are usually too few resources and too few in-house specialists to analyze and evaluate deviations from the existing standard.

What aspects must be considered to ensure that an international roll-out goes through smoothly and successfully?

  1. Planning: It is impossible to overstate the need for careful planning. Before the real work begins, the purely technical requirements must be clarified in sufficiently detailed concepts. The next step is to determine whether these requirements can be met within the existing set-up. It is also important to identify interdependencies between multiple and possibly overlapping roll-outs, and to make due provision for these in roll-out planning. Another consideration is that roll-outs do not normally cover the entire TMS functionality. Instead, it may be necessary to roll out front-office and reporting functions, back-office and settlement functions, treasury accounting, cash management, in-house banking and payment factory aspects in successive phases, which would mean planning a long way ahead. In this context, attention must first be paid to dependencies within the roll-out sequence. For example, even before the transaction entry functionality is rolled out for a given company, the team should already have anticipated and implemented the requirements for those instruments that will only be of relevance during subsequent roll-out of the treasury sub-ledger. At the same time, medium-term planning must also factor in the capacity that will be needed to ensure that possible future projects will not be at risk.
  2. Evaluation of technical requirements and consideration of local conditions: As with every TMS project, clear and unambiguous technical specifications lay the foundation for implementation. However, achieving such clarity is no small task as it is not always easy to anticipate local peculiarities. As a result, it is difficult to know exactly what bases are already covered and where the existing system functionality may contain gaps that need to be plugged (which may in turn create the need for extensive expansions). To take just one example: When back-office functionality is rolled out for an Indian company, local restrictions on the movement of capital place special demands on the settlement processes that have to be implemented, and hence also on the relevant interfaces and file formats. Other local peculiarities include day count conventions and the financial instruments used by South American and Asian companies, for example, not to mention specific local taxation provisions in many cases.
  3. Treasury IT expertise and a clear overview: The people behind all this "machinery" naturally remain one of the most important resources. Great care must be exercised in planning and evaluation, and a clear overview is vital when coordinating interdependencies and the sequence of different roll-outs. Very often, it is precisely the technical differences between the target countries for different roll-outs – and the company's ability to respond appropriately – that ultimately determine whether a roll-out runs smoothly or not. Interfaces to local ERP systems and payment file formats are only two of the aspects that must be considered here.

New technologies such as SaaS and ASP have been making inroads into the TMS market for some time and can significantly ease the challenges described above (or transfer them to the vendor in some cases). In the case of solutions that are operated in house, the bottom line is that professional preparation, careful planning and an experienced project team are the key success factors for international roll-outs. 

Author: Nils Bothe, Senior Manager,


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