Corporate Treasury’s relationship with their IT department

“In every company, we all share the same objectives and work together to achieve them.”

This statement is obvious – but we all know that the reality is more complicated: apart from genuine – healthy – differences of opinion, the need to prioritise the use of scarce resources can generate heated debates which do not always end well.

The reality of corporate teamwork is especially challenging for treasurers. We rely on data and input from many sources, and we need IT systems to manage this process. But many treasurers are reluctant to be part of the corporate IT structure: it usually does not provide the functionality we need, treasury is often not a high priority for budgets and investment, and there is a strong feeling IT does not understand our needs. At the same time, as good corporate citizens, we should not be heading off in a separate direction.

So – how do treasurers manage this conundrum?

• Have a specialised IT team in treasury, or rely on central IT?
• Use the treasury module of the major ERP systems, or install a bespoke TMS?
• Download all the data manually and use spreadsheets?
• Where to get the budgets? Where does treasury stand in the pecking order?

There was a surprising consistency in the approach: 

• Whoever they actually report to, everyone felt a specialised IT team was needed
• Whether treasury runs its own IT team or not, treasury’s needs have to be addressed separately
• Most participants agreed treasury is not a top priority for the business or budgets. One took a very different view: using value at risk as an argument, they had obtained “gold standard” prioritisation.
• A different approach is to frame treasury business cases in terms of the benefits for the business, and not just for treasury (for example, improved customer experience).
• Most treasurers have preferred to install a bespoke TMS.
• The treasury modules in the ERP systems lacked functionality
• Many companies have multiple, incompatible, ERPs versions and even different systems
• However, this approach may be less valid with the latest generation ERPs.
• TMSs and many specific plug and play apps can be significantly cheaper than the treasury modules of ERPs – and the latest SAP releases are even more expensive.
• However, the need to occasionally revamp the TMS or install a major upgrade can become an event which re-opens the debate.
• In some cases, moving to the next generation ERP system, especially SAP’s S4HANA, involves a complete re-engineering of the company. It is difficult for treasury to not participate.
• In all cases, there is a concern that depending on central IT reduces flexibility and increases lead times when urgent updates are needed, for example, to handle a specific investment or hedging instrument.
• SLAs go some way to addressing this issue, but they are not perfect.
• Deciding to use a bespoke TMS can result in IT declining all responsibility, and leaving treasury to manage the system. One treasurer in this situation now requires 50% of new hires to have IT skills.
• IT have project management skills which treasury typically does not possess, so their involvement can add value.
• It is also important to be able to implement specific solutions: for example, matching credit card transactions and analysing card fees. Plug and play is important.
• There is a clear preference for cloud based solutions: these typically have to be vetted by central IT for security compliance, but have no hardware overhead.
• Even where the treasury IT team resides in IT, IT management is often happy to stay out of the technical specifics of treasury management.
• Communications and relationships with IT management can be difficult – it is essential to educate them, and to keep them in the business case process. One participant found their IT specialists acted as interpreters.
• In any case, at some point the TMS needs to interface to the ERP system: this is an unavoidable contact point.
• Payment factories were generally separate from a systems viewpoint.
• One participant has set up their own data warehouse, taking data from the ERP. This enables analyses for payments and FX hedging, for example.
• However, as systems move to Artificial Intelligence (AI), one participant is seeing a move towards a corporate standard approach.
• Skills: there is consensus that it is easier to take an IT specialist and teach them treasury, rather than the other way round. In a recent call on HR issues, all treasury participants agreed the one skill they all needed was IT.

Bottom line: As usual, there is no single right answer. Much depends on the company, its type of business, its culture. And, where communication is involved, personal relations are vital.

But there is an overwhelming message: treasurers cannot ignore IT. It is now very much a core skill, and treasury needs to get the skills, resources and the attention of the business. There are many ways of doing this – but failure is not an option.

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