A Spate of Software for Treasury Management

The global recession is on the wane, but hopefully CFOs will not forget one hard lesson forcibly brought home to them during the crisis: the need to have a 360-degree view of all available funds to be able to leverage internal cash and minimise reliance on external cash.

That lesson may be sticking. In a recent survey of global CFOs, enterprise software maker Oracle found that 82% of respondents consider as their top priority the improvement of financial visibility and provision of better decision-making support to the business.
That’s not news to Michael Fullmer, senior vice president responsible for strategic vision and business for Asia at SunGard, another financial software company. “When it comes to getting cash visibility and managing bank accounts across several countries, Asia’s companies have already moved well ahead in those areas,” he says. 
However, Fullmer adds, many are “still handling their processes manually, on spreadsheets and on disparate bank systems.” Indeed, a SunGard survey discovered that 33% of the region’s biggest companies still have paper-based systems. The proportion is likely higher among the smaller enterprises.   
Automated Solutions
It’s no surprise, then, that vendors of treasury management software (TMS) are coming up with new offerings. “Recent environmental drivers are increasing the demands on, and visibility of, treasury – making it impossible for treasury departments to function at an optimal level without the visibility, controls and analytics only available in an automated environment,” says Elizabeth St-Onge, Managing Director of Treasury Strategies and leader of the firm’s corporate technology consulting practice.
TMS is defined as a real-time software that streamlines complex financial systems to improve interaction between a company, its subsidiaries and suppliers. These interactions might include import or export trade transactions, straight through processing of treasury transactions and information via Internet messaging.
“Because technology has evolved with the markets, in the new financial landscape, survivors will be those who invest in fully integrated systems, spanning cash management, risk management, hedging and accounting, that will help them reduce risks and maximize the value of scarce liquidity,” says Sean McDermott, Calypso Technology’s general manager for Asia Pacific.
Listing the traits of an ideal treasury management software, McDermott says that a treasury software must be deployable in a short span of time; is responsive to changes; and is capable of real-time risk management. The solution should also enable treasurers to monitor and manage cash flows, and to have an optimal visibility of liquidity across their whole organization in multiple geographic locations, in real-time.
According to Deloitte LLP, a structured approach to treasury technology selection and implementation is a key contributor to success.
“Both treasury departments and vendors have struggled with long and costly TMS implementations. As with any major system implementation, there are many potential challenges. These include: finding a solution with the best fit of needs to standard functionality; software quality' availability of vendor resources; internal conflict of priorities; scope creep; functional gaps; budget constraints; and training internal resources for reduced vendor reliance,” write Melissa Cameron a principal in the San Francisco office of Deloitte LLP and Niklas Bergentoft, a senior manager in the firm's New York office.
Integrated Platforms
Software vendors have been investing in the expansion and deepening of the treasury functionalities of their products to take advantage of the increasing demand for more efficient treasury management software. These solutions include integrated platforms, enterprise resource planning (ERP) software, Web-based portals and, more recently, software-as-a-service (SaaS), a component of cloud computing.
Oracle has its own Oracle Treasury Solutions, a module of its ERP system, as well as PeopleSoft Financials, the treasury module of the PeopleSoft ERP system.
SAP, the world’s largest ERP company, has an integrated treasury and risk management module with somewhat mixed reviews against pure treasury workstations but has excellent working capital/cash forecasting capabilities. It is also Web-enabled.

According to Deloitte’s Cameron and Bergentoft, solution providers that have historically focused on companies' cash and liquidity-management needs are investing to become integrated TMS providers by expanding into areas such as foreign exchange, debt, investments and financial-risk management. A cash-management solution is often adopted as a means to provide a cost efficient and standardized reporting of bank data, cash positions, cash forecasting and settlement of treasury payments.

One vendor that offers an integrated platform is Calypso Technology. The Calypso Cash and Treasury Management Solution enable Corporate Treasurers and CFOs to meet their key objectives on a single integrated, easy-to-use, and cost-effective platform.
Calypso provides consolidated class cash and treasury management; enterprise-wide cash visibility, forecasting and reporting; in-house bank functionality and payments factory; real-time risk management; FX, interest rate and commodity trading and hedging; and supports SWIFT.
Another vendor, Treasury Software offers software that automatically collect or disburse payments, create and transmit check files, and automate the bank reconciliation process.
According to Greenwich Treasury Advisors, which provides a list of major treasury software vendors, JP Morgan’s Insight is the best-known and most popular bank cash management workstation.
Web-based Treasury
The advent of web-based treasury management systems has been one the most significant events to take place in the world of treasury management. The Internet has allowed treasury departments to conduct their day-to-day operations with a high level of ease and efficiency.
Surya Software SystemsCorpTreasury is a web-based Treasury Management System that can be integrated with the corporate intranet. This allows for quick deployment and availability from any location.
The system enables determination of investment and funding strategies by providing Asset Liability Management (ALM) tools; management and measurement of investment portfolio performance; and increase in transparency by maintaining the relationship between hedges and underlying exposures.
The system also enables management of trade finance operations; management of debts; management of bank relationship; centralization of funds mobilization and tracking; and centralization of credit facilities and sanctions.
Bellin Treasury also provides a web-based treasury system that is module-based and multililngual.
Another product, Infinax from CS Lucas is a web-based collaborative corporate treasury platform suitable for shared service treasury centers across multiple time zones.  
In the Cloud
According to Sujith Nair and Ravi Pande of Treasury Sciences, treasury management systems that operate as a software-as-a-service (SaaS) application are gaining in popularity among companies of all sizes.
A SaaS application enables corporations to utilise hosted web-based business applications instead of the typical deployment models that were based on the applications deployed by an internal IT department within a customer’s in-house computing environment.
The primary benefit an organisation can derive from SaaS treasury management system (TMS) is reduced cost in terms of hardware, software, IT personnel, and training.
“Pay-as-you-use models can provide an immediate return on investment whereas typical in-house licensed implementations can require upfront costs of several million dollars over a period of several years before a corporation can attempt to least recoup their investments via benefits provided by an in-house solution system,” write Nair and Pande.
One example of a SaaS-based treasury management software is the online service being provided by Wallstreet Systems. The WallStreet Treasury Software is a hosted corporate treasury solution that costs at least US$800 per user per month.
Under Wallstreet’s SaaS model, clients will be able to add to the core Wallstreet Treasury solution by choosing options from Wallstreet’s closely integrated partner network, therefore only paying for exactly the services they need for each user whilst ensuring all aspects of their treasury requirements are met through one supplier. 
Wallstreet Treasury clients that have selected the subscription service include National Express Group plc, adidas, Mazda and Six Continents.
Another software is Treasura, which is being offered by Thomson Reuters as a Software-as-a-Service and ASP model. Treasura delivers full treasury workstation functionality and is integrated with other Thomson Reuters' treasury solutions including their online trading portals and market data platforms. 
While connectivity in today’s increasingly globalised environment is inevitable, JP Morgan stresses that heavy reliance on Internet-based technologies simply changes the nature of operational risk rather than eliminates it. “Yes, you can access balance and transaction data from around the world via a browser-based application, but only if all the links in the infrastructure chain that supports it are stable,” says the company.
About the Author
Melba-Jean Bernad is a contributing editor at CFO Innovation.

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