This article is authored by C M Grover, Executive Director, IBSFINtech and published in CIO Magazine, October 2015 issue. Read complete article here:
Globalization has been the driving force for evolution of today’s business environment such that the world is growing smaller and closer, the markets are becoming turbulent and businesses are becoming smarter! This volatile business environment has coerced the need of efficient treasury department. With this evolving business environment, treasury department has evolved into a strategic division as opposed to a functional one.
As per latest Survey & Report by Bloomberg, 74% of global organizations with revenues less than $250 million “DO NOT” leverage a TMS for treasury management. While 86% of global organizations that are not using a TMS are depending for cash forecasting on spreadsheets. That means, there is a dire need of an efficient Treasury Management Solution!
These numbers point us towards the underlying challenges of selecting an efficient Treasury Management System:
There is “NO” Treasury Management Solution available in the market which addresses all the requirements of today’s new age corporate treasurer. Their demands go beyond the traditional cash and liquidity management; to perform risk management and hedging, managing complex derivative accounting, alongwith adhering to the evolving industry regulations.
A Treasury Management System is a waste of organizational resources unless it seamlessly integrates with the existing third party systems such as ERP systems already installed in the organization. This is one of the major hiccups for an organization to transition over to a TMS.
Next bottleneck is, Cost!
All the established solution providers in this domain offer solutions which are highly priced and only affordable by companies with revenue value greater than $10 Billion USD. What about the rest of the organizations? They are either struggling with half-baked versions of TMS or managing it in-house with existing ERP systems or somehow surviving on the archaic management tools such as spreadsheets!
Another major concern within an organization is the transition, how much time it will take, what kind of training it would require, will our resources be enough to understand a tool of this complexity and so on! An ideal TMS should be easy to understand and implement. Though it should be capable of managing complex processes, yet it should be simple enough for the organization to adapt to it.
Adherence to compliances and industry regulations is a primary requirement for a corporate treasurer. Infact, most of the available solutions claim this, but it is important to understand that since the industry is evolving, the regulations and compliances evolve too. So regular updates to such regulatory adherence is important for a robust TMS.
It is definite that treasury management systems available in the market today are highly inadequate to suffice the requirements of new age corporate treasurers. This leaves a huge gap in the industry for an integrated and holistic treasury management system.
Is there a solution available in the market to fulfil this huge gap?
Are you also searching for a robust TMS and find yourself struggling with one or more than one of the above situations?