Solving the TMS implementation challenge______

Ed Lopez, Chief Revenue Officer

Why is it so difficult to implement the right treasury management system (TMS) for your business? Why does it take so long, why is it so expensive and why is there so much all-round organisational pain involved? Here Calastone’s Chief Revenue Officer Ed Lopez considers the case – and offers solutions for the future

At Calastone we are in constant conversation with treasury clients. They tell us what they have learnt from the recent past and give us insights into the challenges of the future. Sometimes these insights are unique to certain businesses or geographical markets, but often enough they touch on issues that are familiar to all treasury officers. One perennial that comes up in our webinars and Q&A sessions is about the cost and workload of working with existing or implementing new treasury systems.

Everybody wants technology that works – that reduces manual input and duplication of processes (some of our clients call this the ‘swivel chair problem’, where executing even simple transactions and document processing means switching from screen to screen, portal to portal and reconciling incompatible formats on the fly). Everybody wants to move to something closer to ‘straight through’ processing, with automated handling of processes such as short-term investment from start to finish, from fund selection, trading and post-execution reporting. And everybody wants something that will work out of the box.

The trouble is that TMS applications are notorious for not working out of the box and the technology typically used by large treasury departments is often fragmented. We may be talking about a full-featured TMS solution, yet still with strengths and weaknesses, or a more generic enterprise resource planning (ERP) solution with a treasury module. We may be talking about ad hoc solutions to particular needs, such as cash pooling or complex forex management.

There is no all-embracing solution, and perhaps more importantly all solutions need to be implemented in an existing corporate IT setting, which may well feature multiple systems including legacy technologies that are not inter-operable.

To find the right solution, it’s important to take a look under the hood of a company’s existing operations. Where is the treasury data coming from? What is the cycle of reporting? What are the formats? And how easily can they all be mapped and altered?

The same questions were raised in a recent conversation with Patrick Kunz, treasury leader at the $15 billion travel portal Booking.com. “What I have learnt is that you really need good quality information from everywhere in the company, so you are dependent on different departments that all do things differently,” he said. “Everything depends on the department.”

In other words, getting treasury technology implemented is about alignment: the treasury team may have a clear plan for how they want to implement a new solution, they may know what connections they want to build out with external partners, such as banks or fund providers, and they may have a detailed picture of their desired TMS end-state. None of it will be achieved smoothly without alignment from stakeholders within the company. And where problems emerge, it is often because there was a lack of clarity and alignment on exactly why the technology solution was being implemented in the first place.

So from the internal perspective, getting what you need from your TMS depends on detailed mapping and common goals. But what about the external perspective? There is often a lot of work to be done with partners, whether they are TMS providers, fund network providers like Calastone or suppliers of financial services, to achieve the end-to-end automation and real-time data treasurers need.

Whatever solution is required from an external partner – processes for cash management, solutions for short-term investments or integration with banking portals, for example – this is where system implementation becomes about easy integration with existing technology. And many of the treasury leaders we speak to say that the quality of partnerships is critical.

Calastone’s own Jim Griffin, Head of US Money Market Services, recently commented on this in a webinar. “Partnership is key,” he said. “If you want to integrate as fast as possible and get everything up and running, then you need strong partners – partners with the backend technical support that can really communicate with any treasury management system, who become a real strategic part of the corporate treasury team. It is the lack of that which probably explains some of the long and costly TMS implementation projects we have seen in the past.”

So here are two critical issues that determine the success of TMS implementations: internal alignment and external partnerships. It is interesting to note that they are not primarily technology issues. They are also about people, and whether they share common goals.

Calastone’s mission is about extending the capability of treasury technology by streamlining the processing of funds and creating simple single-click solutions to complex investment challenges. But we never forget that building out these solutions fast and efficiently is as much about people as it is about technology.

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