Your TMS Business Case, Part 1

Your guide to a successful business case for a treasury management system

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Author: Wolfgang Frontzek
Posted on:
July 26, 2018


With efficient, secure and transparent processes generating added value for the entire organization, investing in a fully integrated TMS is always the right decision. You and many other treasurers are fully aware of that. But how can you convince the rest of your company including your CFO that a fully integrated system is the way forward? How can you create a compelling TMS business plan? Which details should be considered? Here is how to ensure a winning TMS business case.

Obstacles and helpers:
How to turn stakeholders into TMS advocates

A fully integrated TMS has an impact on the entire organization. This is why it is imperative to get all stakeholders on board and make them advocates for your cause: your financial department, the IT team, accounting, management and maybe even production and sales teams.

But a fully integrated TMS also concerns your external stakeholders: auditors, banks, suppliers, customers or investors. Whether internal or external, your stakeholders are a vital source of information. Not only will you find out how their processes can be made more efficient and secure with a TMS and how it generates added value for other departments. You will also pick up on specific phrases that might be best avoided in your business case or any other potential pitfalls.

How your TMS can add value:
Security, efficiency, accuracy, control and much more

A TMS has an impact on operational processes such as bank connections, reporting and payments, but also presents strategic potential, for example in connection with cash pooling, interest and FX management or IC business. Depending on where your company stands to benefit most, list the respective added value a TMS delivers.

Here is a general list to help you get started. A TMS will always add value by:

Universal benefits aside, the way your company is set up – for example whether or not you do business worldwide, have substantial intercompany trade, a complex banking landscape or if FX is a big topic for you – will to some extent determine how you approach both the introduction of a TMS and the writing of the TMS business case. Prioritize the topics that are of particular relevance to your company to produce a very accurate cost-benefit analysis.

Your starting point:
Analyzing the status quo: where do you stand right now?

You alone know just how essential your work is for the entire organization. Demonstrate the importance of the financial division for the company at this very moment in time and then point out – when listing objectives – which role it could play in the future. Pose the question: is the financial division accounting or controlling-driven or does it play a strategic role that influences the way other departments approach their work and guides them?

Your own department brings great knowledge to the table, and this know-how can be put to good use to generate value for others. You can provide relevant services along the entire value chain from purchase to managing receivables. What’s more, the finance department can contribute essential information, weighing in on the decision of whether or not a potential acquisition or spin-off makes sense and is worth pursuing.

But right now, your hands might be tied as you’re still caught in the manual data entry/maintenance trap.So put down in detail how many people spend how much time on purely operational processes: starting with data retrieval for cash management, to payments or even risk management. Because one of the issues companies like to turn a blind eye to is the amount of time that goes into these processes and the risks associated with them. Employees have often been working for the company for years and to them manual processes are like a force of habit. In many companies, this can be the reason why change is approached reluctantly. But even leaving aside the fact that it is very costly to pay people for doing something that could be achieved so much faster using technology, technology will also produce much more reliable results. Manual processes are error-prone: all it takes is a typo when entering numbers to trigger a lengthy – and therefore expensive – “error hunt.” In addition, increased efficiency creates an environment that enables you to meet ever increasing requirements in treasury and to grow as a company without having to hire additional staff.

Why should you have to put so much effort into analyzing weak points? Because the picture they paint is the exact opposite scenario to the one you’re proposing for the future. Don’t forget to analyze the quality of your data and ask the question of just how significant and reliable it really is. What conclusions can you actually draw from data that is not available in real time? What predictions and forecasts do you want to create if you cannot even rely on the accuracy of your tediously collected data? Do point out that all the work that goes into your planning and reporting is basically pointless if it has no sound foundation in the quality of the data. Don’t hold back: make the case that without a fully integrated TMS, your finance department will continue to rely on error-prone processes on one hand, and will hardly be able to add strategic value to the business on the other hand.

Your objective:
This is where you could be going: inspire strategic vision to shape your company

In stark contrast to this as-is scenario, just how bright could the future of your company be if it had a TMS at its disposal: accurate data in real time, efficient straight-through processing, transparent and secure processes, relevant reporting with one click, plenty of time and a sound data foundation for strategic finances!

Let’s take for example the quality and availability of data: in a fully integrated and web-based TMS, you only need to enter data once, and even this is often automated by way of interfaces to other departments, including HR. Once data is in the system, all authorized users have access to it, whether to create a liquidity plan, to make a payment, to generate a report, to perform an efficiency analysis for a specific entity or to make calculations in the expansion planning process etc.

The TMS provides you with a data foundation and is effectively a prerequisite for treasury operations that create added value, for example the settlement of intercompany receivables through netting. The TMS can also serve as your platform for group-wide payments that enables you to process all payments, backed by a permissions model that ensures secure authorization. Instead of tediously collecting account statements or having to go back and forth with banks on signatures, the TMS represents technology that takes care of these tasks securely, accurately and fast.

This way, you have the time to seize the opportunities the real-time data in your TMS presents to maximum effect. You are freed up to get started on the responsibilities that really define your department, to turn your knowledge and your expertise into quantifiable added value for your business – starting with finance supply chain-associated costs, to risk management or fraud prevention, as well as guidance for the strategic outlook of your company, including investments, the size and make-up of your services and products, or even the expansion into new markets. Because now you see what is really happening in your company, including which entity generates surplus funds or where these funds would be needed elsewhere. You are the one who will make your CFO the “Chief Future Officer” of your organization.

When are you getting started?

This article gives you tips and arguments to back up your business case. If you would like to know more, don’t hesitate to contact us on welcome@bellin.com. We’re here for you! And stay tuned for part two where we will be presenting some best practice solutions that can help you demonstrate where a TMS could be taking you. Just subscribe to our blog.

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