4 Tips for a Successful Treasury Transformation

  • By AFP Staff
  • Published: 3/25/2024
4 Tips Transformation Article Header

Managing a treasury transformation project across multiple jurisdictions is complex because of the major differences in the financial environment and the regulatory landscape between the different countries.

It means that there is no “one size fits all” solution that can be used to manage cash and liquidity across the region. Instead, treasurers will need to develop customized solutions to maximize the efficiency of any new treasury or cash management process, both initially and on an ongoing basis.

There are four key points to consider in a successful treasury transformation:

1. Identify your objectives for the project and consult with experts.

Because of the complexities, no solution is straightforward. Fortunately, there are plenty of sources of advice available to treasurers seeking to upgrade their departments. Banks tend to be close to the regulators in all the countries in which they have a presence and understand the market best practices, so they should have good advice on what companies can do from a cash management perspective while offering a regional and/or global view. Other treasurers are always a good source of advice, too, and they will often be able to alert you to any specific details that have caused them headaches in the past.

Looking for insights on treasury transformation in the Middle East and Africa? Read the whitepaper “Treasury Transformation: Insights from the Middle East and Africa (MEA),” underwritten by Standard Chartered.

Looking for insights on treasury transformation in the Asia-Pacific? Read the whitepaper “Treasury Transformation: Insights from Asia-Pacific (APAC),” underwritten by Standard Chartered.

2. Meaningful evaluation of a project is difficult.

It should be possible to forecast the costs of a transformation project with a reasonable degree of accuracy by combining factors such as the time taken, the costs of a new system and consultants’ fees. Itemizing the potential benefits is much harder, as many will be in the form of efficiency improvements and the reduced risk of error and fraud, so spending time with executive management and auditors to explain the qualitative benefits may help win support for the project.

3. Consider the most effective use of technology.

The treasury technology landscape is changing rapidly, with new solutions being developed based on varieties of artificial intelligence all the time. It can be easy to focus on these new developments, yet it is also important to remember that the major treasury management systems have very powerful functionality that supports the full range of treasury operations. Look at how technology can improve operational efficiency through its output. How does it help treasury and senior management make better decisions?

Map out new operating procedures, processes and workflows, especially if they are to be embedded in a new technology solution. Simply automating an inefficient process will not solve any problems.

4. Remember staff training and development.

Although treasury transformation projects are generally built around technology, the treasury team still needs to set up and oversee the processes. Focus on how the team’s skill set will need to change as a result of the transformation as treasury pivots toward more data analysis and interpretation. Identify any skill gaps and take action to prepare the team in advance. Keep in mind that the team will still need the skills to be able to take action when manual authorizations are needed or any exceptions arise. Recognize they may be nervous about their own future roles and explain the purpose of the project and the vision for the future.

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