Read this ebook to learn the steps to prevent the implementation fatigue caused while implementing new treasury solutions.
Treasury is the backbone of any business due to its contribution in managing liquidity and funding requirements, which is crucial for long-term sustenance. To complement these roles, there is a need to improve accountability, visibility, and transparency of operations. And that can only be achieved with the use of emerging technologies.
Source: PWC | 2019 Global Treasury Benchmarking Survey
The above survey states that technologies such as Artificial Intelligence and AI will be quite relevant in recent times.
The following diagram shows the evolution of treasury systems over the past few decades:
The 2021 Citi Treasury Diagnostics survey found that 74 percent of treasurers are not yet in a position to fully embrace the digital treasury management systems (TMS). The same survey also showed that 54 percent of treasury professionals were using application programming interfaces (APIs) to assist with their treasury functions.
Although treasurers are expressing willingness to adopt treasury technologies, there is a certain degree of resistance associated with the prior grunt work required during implementation. During tech implementation, treasury project teams sometimes have to encounter several challenges for a long duration that lead to implementation fatigue.
Treasury system implementation projects can take months or even years to complete and somewhere in that timeframe the implementation team might tend to reach their peak stress level as timelines are pushed out and costs rise. This leads to implementation fatigue. As a result, the team focuses on the bare minimum to get the project over the line.
Timing and resourcing are frequently the most challenging issues. Too many companies cut corners on the time it takes to plan and implement projects. Even the best-planned and best-resourced projects experience bumps in the road and a degree of implementation fatigue. Hence, it is advisable to be prepared for it and plan everything accordingly.
For the treasury departments, implementing Artificial Intelligence in treasury management is a project that, when done well, yields tremendous benefits. The key areas for a successful implementation are to:
The three biggest issues that the treasury faces are:
Managing cash is most vital to the treasury, but in light of recent events, it has become challenging. The first area where most people struggle is ensuring timely visibility into cash balances across local, regional, and global entities and this is due to decentralized systems and spreadsheet-driven processes.
Spreadsheets and legacy systems lack scalability and flexibility, which prevents modifications to the system during M&As. Technology enables in establishing standardized processes that can simply be replicated by other organizations.
Treasury needs a framework to track operational risks associated with treasury activities and make extensive use of KPIs that are explicit, measurable, achievable, relevant and time-phased. But, delayed reporting due to obsolete systems leads to poor risk management.
The priority of treasury is to ensure the business has the money it needs to manage its day-to-day business obligations, while also helping develop its long-term financial strategy and policies.
Before engaging with vendors, a treasury department should review everything it performs daily to see where it can improve. The purpose of this assessment is to identify where technology can drive improvements.
Technologies that are transforming treasury are:
AI-enabled treasury solutions are now being implemented into treasury processes for the following reasons:
The first step is to have a clear understanding of all current processes of the treasury function. Typical processes include those surrounding cash forecasting, liquidity management, treasury payment execution, and risk management hedging. Other processes to consider include banking structure, risk management compliance, financial reporting, and bank account and cash reconciliation.
During the time of implementation, the project team should collect all the information, such as:
The analysis should extend to all branches of the company and participation in the process redesign initiative should not be limited to members of the treasury function, but should include each internal group that provides input to a specific treasury process.
The implementation of a new treasury system requires a number of steps to create a well-defined roadmap that measures progress and ensures the organization maintains focus.
They need to think of a preplanned roadmap for the successful deployment of AI, and the roadmap should take into account- its priority, impact on the organizations, and the level of effort required to complete it.
If the company has not taken any precautionary measures in advance, then it is difficult to prepare a realistic timeline and resource requirements. In such situations, it is necessary to reach out to the internal technical teams to provide accurate input at the right time.
Additionally, all stakeholders in the project including functions outside treasury should be engaged in planning the project roadmap. The project will need the support of these groups throughout its lifecycle to obtain the input.
An implementation plan is a project management tool that simplifies the execution of a project by breaking it down into smaller parts, outlining the timetable, and identifying the resources required. The strategy may be created in collaboration with the chosen vendor, as they are the most knowledgeable about their product.
Treasurers can significantly improve the timeliness, consistency, and completeness of cash-flow forecasting information by using application program interfaces (APIs) to access both bank and internal systems, especially when combined with robotic process automation (RPA) and artificial intelligence (AI). According to a Euromoney survey, 57% of corporate treasurers expect to use APIs to help their cash forecasting and cash concentration operations across various banking partners. Here are some outcomes of increasing efficiency:
Schedule a demo to learn more on how to ensure a win-win for both clients and vendors while implementing treasury solutions for your company.
The HighRadius™ Treasury Management Applications consist of AI-powered Cash Forecasting Cloud and Cash Management Cloud designed to support treasury teams from companies of all sizes and industries. Delivered as SaaS, our solutions seamlessly integrate with multiple systems including ERPs, TMS, accounting systems, and banks using sFTP or API. They help treasuries around the world achieve end-to-end automation in their forecasting and cash management processes to deliver accurate and insightful results with lesser manual effort.