Three considerations when implementing a treasury management system

Treasury management systems (TMS) offer many benefits, but implementation may be demanding. These best practices may help you prepare for TMS adoption and mitigate its challenges.

Treasury management systems (TMS) have been around for about four decades. Yet companies are still beginning to realize the benefits of a TMS such as cash forecasting, fraud and risk management, streamlined payables and receivables, and accounting and reconciliation.

Historically, these systems – also known as treasury workstations – have been utilized by larger companies and global multi-national corporations. However, the tide is changing as adoption is increasing across companies of all sizes and segments who can also benefit.

Transitioning to these types of projects can be extremely complex, expensive, and take several months, if not years, to complete. It’s more comparable to preparing, training for, and running a marathon or ultra-marathon rather than a quick sprint. This is additionally challenging for companies who have never implemented or used a treasury workstation.
Although each company, each system, and each implementation will have a different and unique experience, there are some common best practices to consider for this kind of event:

  1. You’re gonna need some serious process. A TMS implementation is definitely a project on steroids. It requires a strong and organized approach using common project management methodology. Some deliverables include as-is workflows and processes, system integration, testing and training. According to a recent article from The Global Treasurer, some important questions to ask during the initial project stage are: “What are my current processes?”, “How can I translate requirements into the system?” and “How do I define priorities?” The key is to have a dedicated project manager assigned who can work with personnel across the company to answer these questions and drive deliverables and timelines. Formal reporting and frequent updates to senior management and stakeholders are also important.  
  2. Innovate – don’t just replicate. It is absolutely critical to identify and document all existing processes and workflows during the requirements phase of the project. This includes controls, reports, data hand-offs and any other tools required to complete tasks. However, don’t get hung up on how things are currently done and who is doing them. Being open to doing things differently will help you maximize the new system. Implementing a new TMS allows your entire organization the opportunity to maximize efficiencies and reduce excess waste, so think of it as designing the future state of your treasury management operation. Avoid common pitfalls by including all impacted departments in the process and don’t limit the transformational power a TMS can offer to just daily cash management functions.  
  3. Embrace change at all levels. Implementing a TMS cannot be done in a vacuum. A TMS implementation includes all levels of the company which means change will happen at all levels of the company. In “Five Critical Factors for Enabling Successful Change,” Insigniam Quarterly reviews how resistance to change could hinder a company’s ability to make necessary changes to the business model and core operations. And that resistance isn’t just at the staff level, but also the top of the house. Most organizations are not competent in embracing change or fluent in understanding change readiness. Companies need to consider how important change management is and look to appoint change leaders or change masters. These change agents are accountable for addressing company-wide impacts like data conversion, training, and audit and compliance requirements.

Implementing a TMS is definitely a journey. Like I mentioned earlier, it’s more like running a marathon or ultramarathon, but there are best practices to help you succeed. It takes a solid project plan and project manager to help ensure you cover all the bases and document tasks throughout your run. You need to identify opportunities to tweak your existing training schedule to make sure you have enough fuel and endurance for the long haul. And since change is inevitable, be aware of all the things that need to change to make sure you cross the finish line in one piece.