Treasurers who understand how the cloud - and software as a service in particular - is changing the world around them will be those leading their companies forward and the treasury industry-at-large towards its own digital revolution.
Consumer activities and business functions are increasingly digitised and connected, made possible by the cloud and more pervasive by the Internet of Things (IoT).
From device agnostic applications to data-sharing capabilities, cloud-based technology that finds its way into the hands of the consumer is also giving life to solutions that deliver value to business. For treasury, the ease with which teams can see, collect, share and analyse data is key to intelligence-based decision-making. Without it, treasuries that seek to minimise costs, mitigate risks and maximise investments will have an increasingly difficult time outperforming companies that have connected their treasury and risk management workflow on a common platform in the cloud.
Why not treasury?
Multinationals such as General Electric and Microsoft have built innovative business models around the digital ubiquity of the cloud, enabling users to capitalise on the intelligence gathered from connected products and applications. Business functi
ons such as sales and marketing have long tapped into the power of the cloud to put data and intelligence at the fingertips of their diverse field teams. Why should treasury be left behind, just to spend its time piecing together data that is dead on arrival?
Year after year, cash flow forecasting tops the list of industry surveys, yet many treasury organisations are not connected in a way that enables them to access and analyse data from their subsidiaries in real time or from all of their bank accounts around the world. Without understanding what is possible in treasury with cloud-based technology, these professionals will be trapped in the status quo – until something goes horribly wrong.
First get the data, then harness it
Financial professionals create thousands of transactions every day. In order for treasurers to make use of that information, they first have to be able to capture it in one place. Treasury teams globally need to be working from the same system. Doing so in the cloud will give treasuries the ability to evolve and scale their operations easily, over time, as the business grows. They will be able to accommodate newly-acquired entities or bank accounts in new markets, just by switching on additional functionality from an application’s modular design.
With their entire treasury organisation working off the same platform, treasurers will standardise their processes, put controls in place and gain visibility into their global cash position and exposures.
With the tactical process of data collection happening automatically in the background, treasury professionals can feel confident that their data are accurate and up-to-date, and that they are basing their decisions on a single version of the truth. This leaves treasuries with time to visualise the data, dig deeper to find correlations among exposures and adjust strategies and policies as necessary. With actionable intelligence in hand, financial professionals can move the needle on business value and demonstrate treasury’s own value to the chief financial officer (CFO).
Why spreadsheets and legacy systems are old news
This type of progress cannot be achieved by using spreadsheets and disparate legacy systems. Spreadsheets have existed for a long time and are still pervasive throughout the business. However, some treasuries have taken spreadsheets from their intended function and turned them into systems. This situation creates huge problems for companies from a security, reliability and intellectual property perspective. Essentially, these treasuries have created a long-term loss for their companies for a short-term gain.
Organisations that have grown increasingly dependent on spreadsheets as work-arounds for the legacy systems that have failed to meet their evolving needs, are realising that they have reached a dead-end. This status is not sustainable for treasuries of growing businesses. Legacy technology itself is not sustainable – because it is not built for change or growth. It is not designed to be open like cloud technology, which easily integrates with other web technologies. It cannot accept and share data with the same flexibility and scalability offered by cloud-based technology.
Cloud is the great equaliser
The advantage today with the cloud is that treasurers can get access to state-of-the-art technology that is easy to deploy. This is particularly useful for mid-market companies with small IT shops, which lack the time or resources for a long implementation or to maintain the hardware, software and security necessary for a treasury and risk management system.
Software-as-a-service (SaaS) applications are the great equaliser for mid-market companies that want access to some of the same capabilities that larger organisations use. For all companies, multi-tenant SaaS solutions make continuous innovation and improvement available to their entire community of users, who together drive the application forward.
Changing tech habits
Embracing the cloud and understanding the benefits and possibilities that it affords treasury requires a change of mind-set. Treasurers that maintain the status quo with a ‘if it ain’t broken, don’t change it’ mentality are bypassing the benefits of technology that connects treasury to its global organisation, to industry best practices and to the progress happening in the world around them.