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Treasury Management Systems

There are five basic activities in every corporate treasury department: processing and administration, transaction execution, decision making, strategic business initiatives and setting corporate treasury policy. Without significant systems automation and adoption of best practices in the corporate treasury department, the work and resources in the corporate treasury department are dominated by processing & administration, and transaction execution. But if the corporate treasury department is automated as far as possible and has straight through processing for all processes and uses best practices, it is theoretically possible to invert the pyramid so that time and resources can be freed up for the more important and highest impact activities as shown below.


Distribution of Time and Resources / Corporate Treasury Department Activity

Source: J&W Associates Copyright© 2011

This inverted pyramid work balance is the dream of every corporate treasurer and every corporate treasury system is designed to help them achieve this dream.

Nature and Types of Cash & Treasury Management System
There are several very different types of solutions for automating corporate treasury department processes and operations. The spreadsheet based systems and solutions which provide very advanced routines to carryout key processes in the corporate treasury department. There is a wide range of bank electronic banking (EB) cash management services and work stations covering the basic functions in cash management. The General Cash and Treasury Management (C&TM) systems range from quite simple functionality to some of the most advanced CTMS available today. The large Strategic Customised C&TM systems are for global companies and groups that require dedicated development and support to cover their complex operations world-wide. The final type of system is the Dedicated Systems and Services that provide advanced functionality in key functions in corporate treasury. These dedicated systems and services are used to complement and enhance the basic functionality of the general cash and treasury management systems as the figure shows.

Dedicated Systems & Services Provide Advanced Functionality in Key Areas

Source: J&W Associates Copyright© 2011

The suppliers of cash and treasury management systems either provide a software to be installed on the user's own computer system(s) (including in-house servers) based on a software license or as a Software-as-a-Service (SaaS) via the Internet, i.e. an Application Service Provider (ASP) solution. Some suppliers only provide SaaS based solutions and other just provide installed systems. Today around half of the new cash and treasury management system installed are SaaS based.

Functionality, Power and Customization
The C&TM systems' vary in the range and depth of functionality they provide, the power - the number of concurrent users the 'system' can handle, and the level of customisation of the 'system' allowed to meet clients' specific needs. Thedepth and range of functionality varies from spreadsheet applications with specific functions to the broad range of functionality in the strategic cash and treasury management 'systems'. Power is no longer a problem with most systems, it is just a matter of adding another server or a more powerful computer. The level of customization available in cash and treasury management systems is generally decreasing apart from in the strategic customised systems.

Ease of Use and Implementation
Ease of use for the key functions that are performed regularly is the most important factor is selecting CTMS and is far more important than ease of implementation. It is no good having advanced functionality if it is not easy to use. But ease implementation is important. There are sad examples of systems being purchased but never being implemented, because of the complexity and amount work required.

Increasing Scope of the Systems Providers
The larger treasury systems providers such as SunGard and Wall Street Systems have been adding new functionality and buying smaller companies to extend the depth and range of their systems and services, so that they provide much more than treasury systems. SunGard have set themselves a mission that goes way beyond treasury: 'To provide liquidity management systems and services to corporates and to enable greater efficiency across the commercial ecosystem.'

SunGard are also starting to provide a range of Software-as-a-Services that companies can use even though they do not use SunGard treasury systems. This is the beginning of the 'App Market' for the corporate treasury department department.

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