The corporate treasury department's mission, policies, objectives for organisation and operations are the starting point for developing a cash and treasury management systems strategy:
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The basic processes and questions in evaluating and selecting a general cash and treasury management system include:
- recording the current processes and systems operate
- determining what scale of treasury operation needs to be supported - low volume cash operations only,or full functionality treasury including in-house banking, payment factory and multi-lateral netting with medium transaction volumes, or a high volume treasury solution is a sub-ledger or a full general ledger accounting system needed
- deciding whether a single system or a mix of general and specialist systems is required
- choosing the balance between internal systems or ASP or SaaS based services, i.e. what has to be operated internally and what is acceptable to take from an ASP or SaaS provider
- evaluating what type of solution is acceptable - a standard turnkey solution, a preconfigured general treasury solution or a comprehensive, cross-asset class custom built solution
- deciding whether there are there preferred suppliers, if so which
- reviewing how will the corporate treasury department connect and communicate with the rest of the group and banks and other financial institutions.
These are just some of the areas that need to be covered to fully understand what is required and to prepare a Request For Proposal.
Evaluation and Selection Process
The selection process for cash and treasury management systems typically involves collecting information on the leading suppliers and their systems; a detailed demonstration of 2-3 hours to fully understand each system; choosing which 2-3 (maximum 4) systems/suppliers are worth analysing further and sending them a detailed RFP; running an evaluation workshop using the company's data with each supplier; and then making the choice of system/supplier and negotiating service level agreements and other contract details.
The evaluation and selection process is time and resource consuming and normally needs an internal project manager. It typically takes a minimum of two months and can take over a year, and often requires experienced consultancy support to ensure a sound and effective decision is taken in a timely manner.