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Treasury & Tax Management

Embracing Change: Effectively Managing Treasury Transformation 


The importance of change management is becoming evident. Established organisations such as Barclays Capital are even hiring treasury change management executives. The message is clear: change is inevitable, and those who do not proactively work to manage it will be left behind.

It’s therefore incumbent upon treasury professionals to become more strategic and proactively manage change. The key is to manage both processes and expectations at all points of the path to treasury transformation. The good news for treasurers is that driving and managing change provides the perfect opportunity to become a strategic leader.

Drivers for treasury transformation
Growth is the key element for most treasury transformation initiatives. While growth is a good thing for businesses, growing too quickly can lead to more challenges. Your organisation may not have scalable processes in place. Or perhaps through mergers or acquisitions there are disparate systems that need to be consolidated for greater efficiency.

Common drivers for treasury transformation include:

  • Risk management — Security is a serious matter. Fraudulent activity resulting in loss of money and data continues to be a threat, and prevention is far preferable to mitigation.
  • Governance — With financial regulations such as SEPA, PSD2, Dodd-Frank and more combined with data regulations, the areas for compliance requirements have also grown. It’s vital to be prepared for audits, whether planned or unscheduled.
  • Desire to be more innovative — In addition to wanting to add more value to the services they provide to their customers, leading companies want their own systems to run as smoothly and efficiently as possible.
  • Staying competitive — Business growth means market expansion. If you can’t connect to new banks in new geographies but your competitors can, or can do it faster and/or more securely, you’ll lose business.
  • Increasing efficiency/reducing administrative work — Automation gives treasury staff the time they need to concentrate on more strategic work, and also reduces the risk of error associated with manual work such as data entry or spreadsheet reconciliation.

Planning for change
To truly transform your treasury, a plan is required. This plan needs to have different elements which all tie back to your organisation’s strategic goals. Where are you today – and where do you want to get to tomorrow?

You will need to have a solid understanding of what your treasury capabilities are today, what capabilities and skills you will need to achieve your goals, and what roadblocks you are likely to encounter along the way. It’s also important to have your finger on the pulse of the industry. What are your competitors doing, is it working for them, and would it be likely to work for you?  Do you want to achieve global cash visibility? Straight-through processing? Do you want to save a certain number of staff hours per day, week or month? How will success be measured?

“With the advent of cloud and web-based connectivity solutions, the days of siloed data are nearing a close.”

Your plan should include resources, technology, processes and policies. It should take into account regulatory needs and security needs. Once you have the big goals in place, drill down to the incremental goals, the tactics you will take to achieve them, metrics, and the timeframe for each goal and phase.  It’s critical to not forget the human element. Without executive support you will fail, so involve the right people early on in the planning process.

Taking treasury to the next level through technology
Technology innovation has led to new ways for treasury to become more effective, more responsive, more productive and more strategic.  Treasurers today need holistic visibility into cash and cash positioning, systems that all work seamlessly together, streamlined payments with straight-through processing and efficient messaging that guarantees that no matter what the format, corporate-to-bank connectivity just works.

When diving into the technology aspects of your transformation plan, you should look at how your treasury is organised today, the overall banking landscape, your system infrastructure, and treasury workflows and processes. Then think about what you would like to change.

For example, prior to 2016, UPS had a domestic US treasury system, a homegrown international system, and a large number of banking platforms to manage cash. The transportation logistics giant had 90+ different electronic banking portals with 2,500+ users in business units around the world. Regulatory shifts were changing the landscape, putting over $2B in international liquidity at risk if treasury could not replace their notional cash pooling structure with physical funds transfers.

UPS’ treasury needed a solution that would aggregate and automate bank and transaction information and present it in a manner that would enable treasury staff to make important decisions in real-time. Top priorities were cash visibility, the ability to concentrate cash, and increasing the efficiency of global bank messaging and payments processing.

With the advent of cloud and web-based connectivity solutions, the days of siloed data are nearing a close. Open APIs have created a new realm of possibility for organisations to both receive and deliver a wide variety of services with seamless interconnectivity. Treasury management systems centralise workflows and processes. Multi-bank connectivity providers like Fides allow you to connect to any bank, anywhere in the world and also integrate with TMS and ERP systems for straight-through processing.

“Both transparency and communication are key. Having the best plan in the world means nothing if nobody knows about it, or if they refuse to help.”

UPS chose to use the Reval TMS and Fides bank connectivity solutions to power its treasury transformation. Now, the company receives prior day statements and current day statements from almost all of the bank accounts that they have connectivity to. The treasury team has the insight they need to know not only what their balance was at the end of yesterday, but also what the balance is almost real-time. That real-time visibility allows them to report accurately and concentrate cash in the most effective way possible.

“On the first day that the new bank connections went live in November of 2016, we successfully moved $1.6B from the local bank accounts into our concentration structure. That’s a lot of money to be moving through newly laid pipe – but it was a big success. All those payments cleared with the appropriate cutoff times, so that was a big win for us.” – Eli Brown, Treasury Process Controller, UPS

Successfully managing change
Treasury transformation requires embracing change, moving faster, and responding faster to deliver better experiences for your customers. It means continuously striving towards greater efficiency.  Change management is exactly that: making sure that the processes and policies that are changed make sense, are adopted throughout the organisation, support the goals of the company, and work effectively to deliver the benefits of the change.  It’s really not just managing change, it’s anticipating change. Treasury transformation includes digital transformation, technology transformation, and process transformation. Ultimately it is a change in the way business is conducted.

Both transparency and communication are key. Having the best plan in the world means nothing if nobody knows about it, or if they refuse to help. Once the plan has received executive sign-off, regularly communicate with all your stakeholders. The more prepared you are, the better off you’ll be — but as change is constant, continuous adjustment and improvement will be required to ensure that you get the right business results.  Once you’ve started down the path to treasury transformation, it’s important to stay on target. Document your processes, and hold regular review meetings, with checkpoints on where you are in relation to accomplishing your goals.

As more treasurers effectively manage transformation within their organisations, the strategic importance of the treasury role will continue to elevate, ultimately resulting in better visibility, better pay, and more executive level positions. And that’s a change we should all support. To find out how seamless multi-bank connectivity has helped corporate treasurers around the world transform their treasury operations, you can view and download Fides case studies here.

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