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Why choice of technology matters when selecting a treasury management system

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This webinar featured insights from leading technology analyst, Albert Pang from Apps Run The World, distinguished treasury influencer and 25-year industry veteran, Ari Morris from Global Treasury Partners, and Bob Stark, Kyriba’s vice president of strategy. Topics this webinar covered include: the technology landscape in treasury management, the relevance of cloud and SaaS for treasurers, how to decipher what’s relevant to your technology decision making, and key takeaways to help make the right TMS decision.

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Why choice of technology matters when selecting a treasury management system

  1. 1. Albert Pang, president, Apps Run The World Ari Morris, founding partner, Global Treasury Partners Moderated by Tim Wheatcroft, Kyriba Why choice of technology matters when selecting a TMS
  2. 2. © 2015 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 2 Today’s presenters Albert Pang President, Apps Run The World apang@appsruntheworld.com Ari Morris, MBA, CPA, CMA Founding Partner, Global Treasury Partner ari.morris@globaltreasurypartners.com
  3. 3. The treasury technology landscape
  4. 4. TMS Market Dynamics Installations are defined as a TMS implementation attached to a unique organization. Deals cover TMS replacements, add-ons, and net new customer wins. Global TMS Implementations By Vertical
  5. 5. Cloud vs On-Premise Software • Market consolidation heightens competition among Cloud TMS apps vendors. • Vendors are bolstering their Cloud subscription revenues for the first time starting in 2015. • TMS market growth will hinge on enterprise customers, not financial services companies. • Heterogeneous environment made up of TMS, ERP systems continues to pervade large enterprises. • In Europe, up to 90% of top corporations now prefer commercial off the shelf TMS apps. In USA, it’s 76%. • Number of new TMS implementations continued to rise in 2014. $M Cloud TMS Sales Could Eclipse On-Premise Software Licenses By 2017
  6. 6. Top 10 TMS Market Trends 1. Volatility is the new normal 2. Holistic approach to TMS prevails 3. TMS centralization gains ground 4. Cloud drives business value 5. Analytics lead transformation 6. Big data spur TMS collaboration 7. Machine learning eases compliance 8. Currency war scenarios loom 9. Users favor best of breed TMS apps 10. Treasury As A Service wears many hats
  7. 7. 1. Volatility is the new normal • Market volatility will continue as era of cheap money may soon end. • 2015 M&A mania, big share buybacks, and increased capital repatriation portend significant treasury and risk management implications. • Process excellence, accurate forecasting are needed to withstand future shocks.
  8. 8. 2. Holistic approach to TMS • In the midst of uncertainty, the best defense may well be a well-orchestrated attack. • A holistic approach combines big-picture thinking, risk mitigation, and preventive measures. • Time to retire legacy TMS systems before they outlive their purposes.
  9. 9. 3. TMS centralization • Centralization helps set standard, ensure scalability, speed decision-making. • Planning and forecasting done on single system yields better results than that of multiple ones. • Implementing a standard system one module after another is like scaling out a buffet line to meet different needs of many constituents.
  10. 10. 4. Cloud optimizes business value • Cost and agility are secondary to the intrinsic business value cloud applications can bring to help strengthen a company’s top and bottom lines. • BBC realizes tangible value by running cloud apps to manage 550 bank accounts globally, while finding a functional fit to meet specific BAM requirements. • Continuous cloud updates aim to sustain those benefits by aligning product plans with treasury objectives. Dedicated Hosting Hybrid Cloud Private Cloud Public Cloud
  11. 11. 5. Analytics as the transformer • BI, Database, OLAP may have become commodity, but analytics offer considerable value propositions. • New use cases of predictive analytics, adaptive planning, pixel-perfect visualization are transforming finance and treasury functions. • Intuitive TMS analytics will boost utilization among casual and power users, providing them with early warning, insight and context, as opposed to information overload.
  12. 12. 6. Big data spur collaboration • Collaboration is the lifeblood of any fast-growing business and treasury could serve as the main artery. • Successful task completion requires enterprise- wide collaboration by harnessing domain expertise, market trends, and unstructured data. • Treasury function will be shaped by how it leverages Big Data and team collaboration to generate the single version of the truth that determines, defines a company’s fiscal health.
  13. 13. 7. Machine learning eases compliance • Machine learning keeps tabs on noncompliance, spots anomaly, and recommends remedies. • Widespread use of machine learning algorithms from platform vendors like Amazon, Google could improve internal controls, combat fraud, and reduce compliance risks. • Obstacles remain with information and system silos across the enterprise, especially those that underinvest in TMS.
  14. 14. 8. Currency war scenarios • Devaluation of Yuan and its effects on China’s foreign reserves will have serious ramifications for US companies, and the treasury community at large. • No one is immune from a looming currency war and companies need to develop contingency plans when such volatility persists. • TMS system standardization and a robust risk management strategy are keys to reduce one’s FX exposure.
  15. 15. 9. Best of breed TMS vs suite • Applications are becoming more modular with single-purpose function more prevalent than ever, TMS apps are no different. • Rising popularity of cloud applications, which cover tens of thousands of point solutions, makes it impractical to rely on a tent-like software suite. • Best of breed TMS apps and software suites will co-exist as users embrace hybrid cloud deployment, API integration.
  16. 16. 10. Treasury As A Service • It’s the services economy, stupid. • Treasury professionals build corporate mandate and business case in advance of key initiatives such as in-house bank, finance and risk management command center, and cloud shared services. • Pitching these projects to elicit corporate support requires key stakeholders wearing multiple hats, polishing up new skills and perhaps redefining the role of a treasurer.
  17. 17. Key Takeaways • Volatility means disruption • Spend less, but expect more from Cloud TMS • More data with context, insight to connect the dots proactively • Don’t fault for failures, just for bad decisions
  18. 18. Choosing a TMS – Technology Considerations
  19. 19. TMS Functionality Back Office Middle Office Front Office Cash and Liquidity Management • Cash Mgmt • Cash Fcst • Payments • Trade Capture • Pricing • Position Mgmt • Position Mgmt • Limit Mgmt • Valuation • Settlement • Accounting TMS allow users to automate processes in a controlled environment and facilitate value-added functions Banks General Ledger Trading Systems Confirmation Services Payments Trade Data Market Data Provider Confirmations Rates Accounting Entries Integration Required TMS Functional Scope Bank Stmts
  20. 20. Drivers of Adoption Treasuries adopt technology solutions for a variety of reasons Corporate Change Sudden changes to the organization can create a sudden need to examine and invest in treasury technology Complexity Changing business requirements from new business exposures can stretch current resources and require a look at technology. Operational Risk Risks identified by auditors or through internal process reviews can highlight material deficiencies in existing processes System Obsolescence External changes can render existing platforms obsolete and require examination into new tools. Strategy The desire to increase the capabilities of a treasury department and overall contribution to the organization requires the right tools. Often a combination of the above are required for a company to take action LevelofUrgencyAssociatedwithDriver  Acquisitions  Mergers  Divestitures  New markets and regions  New policies, procedures  Increase in volumes  Audit findings  Board issues  Lack of visibility  Unsupported platform(s)  New regulations  New services  Automation of processes  Resource optimization  Innovation Description Examples
  21. 21. Success Characteristics Companies that realize the most benefits from TMS have a few common characteristics: Not all characteristics are required to realize benefits, any one can create a compelling business case. Geographic Breadth  Companies with multiple locations/global ops X Companies in a single location Banking Complexity  Multiple bank relationships in multiple countries;  Advanced services (pooling, netting etc.) X Single domestic bank relationship Trading Volume  High trading volume in multiple asset classes X Low trading volume, no derivatives Risk Management  Multiple asset classes  Hedge accounting X No active RM program/no activity Organization Support  Active support from IT, accounting, operations etc. X Siloed “Treasury only” approach
  22. 22. Specific Technology Considerations Engage stakeholders early to determine IT strategy in the following areas These decisions will have wide implications on degree of benefits achieved and strategic importance to the organization Deployment Options* • Installed (On-premises) • Hosted • Cloud (SaaS) Operational Oversight • Centralized • Decentralized Statement Retrieval and Reconciliation • SWIFT vs. Direct Host-to-Host • Centralized through Treasury or Accounting? Payments • Treasury as central release point for all payments • Shared between Treasury and AP
  23. 23. Deployment Options Installed (On-premises) Hosted Cloud (SaaS) IT involvement • Security, servers, database, business continuity, integration, IT standards • Servers, database, integration, IT standards • IT Standards Functionality • Upgrades required • Customizable • Upgrades required • Customizable • No upgrades • Configurable Bank Connectivity • Separate managed service (internal or service provider) • Separate managed service (internal or service provider) • Part of SaaS offering Cost Components • Software license • Servers & DB • Annual maintenance • Implementation and upgrades • Internal IT • Software rental • Server & DB rental • Annual maintenance • Implementation and upgrades • Software subscription • Implementation
  24. 24. Taking Action • Begin building the business case • Obtain organizational buy-in – IT, Accounting, Finance, Business Operations • Examine existing processes – Look at making key policy changes prior to, or in conjunction with, implementation • Budget Now you have identified a need or want to realize the benefits, what next?
  25. 25. Resources Required • Functional team structure: – Treasury (Cash, Risk, Back Office) – Accounting • IT resources • Software budget • Services budget (banking, SWIFT etc.) • Implementation budget
  26. 26. Conclusion • Choice of technology is not a secondary consideration and should be evaluated in conjunction with functional and strategic requirements • Deployment options are highly related to individual characteristics of an organization • Ensure you gain a full understanding of the differences between installed (on-premises), hosted and cloud (SaaS) • There are wide differences in implications for IT from implementation through the life of the system
  27. 27. © 2015 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 27 Further reading Top 10 Treasury Management Market Trends Download at: kyri.ba/TMS-trends SaaS and Cloud: Beware the Wolf in Sheep’s Clothing Download at: kyri.ba/SaaS-cloud
  28. 28. © 2015 Kyriba Corp. All rights reserved. PROPRIETARY & CONFIDENTIAL. 28 Thanks for attending facebook.com/kyribacorp twitter.com/kyribacorp linkedin.com/company/kyriba-corporation youtube.com/kyribacorp slideshare.com/kyriba kyriba.com/blog
  • JunkoIzawa

    May. 25, 2016

This webinar featured insights from leading technology analyst, Albert Pang from Apps Run The World, distinguished treasury influencer and 25-year industry veteran, Ari Morris from Global Treasury Partners, and Bob Stark, Kyriba’s vice president of strategy. Topics this webinar covered include: the technology landscape in treasury management, the relevance of cloud and SaaS for treasurers, how to decipher what’s relevant to your technology decision making, and key takeaways to help make the right TMS decision.

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