From rapidly shifting geopolitical and economic activity to ever-tightening regulations and increasing risk, corporate treasury functions face constant change.
The past six months alone have brought a series of shake-ups as the United Kingdom continues its plans to leave the European Union, tax reforms and trade negotiations reshape industries, and new mandates strengthen markets in China, India, and Indonesia.
Confronted by unrelenting uncertainty and complexity, treasury teams are beginning to think differently about their organizational models and processes. According to the 2018-2019 joint study, “Journeys to Treasury,” from BNP Paribas, the European Association of Corporate Treasuries, PwC, and SAP, “Treasury resources are limited, while increasing scale and complexity mean that it becomes impossible to process information and transactions without the help of technology.”
In essence, corporate treasurers are approaching a critical flashpoint as they head into 2019, where digitalization is the rule, not a discretionary option.
Intelligent Treasury: No Longer a Futurists’ Dream
Many corporate treasury leaders make digital investments through a carefully orchestrated journey of sifting through a barrage of technology innovations, business trends, and cosmetic interfaces. They rely on business experts, both internal and external, to learn which disruptions lie ahead, what changes can prove transformational, and how their decision can bring the most significant impact. Most importantly, treasury executives seek new ways to improve how the entire business gets work done, maximizes performance, and delivers groundbreaking, competitive advantage.
Enhancing data quality and use are still critical capabilities for treasury to deliver better analysis and insights. However, automation is increasingly being adopted to handle time-consuming, error-sensitive tasks while staffing in most treasury departments becomes leaner, and they take on more strategic roles. And this is only one step in a long line of evolution for the treasury organization.
The joint study, for example, predicts that treasury departments will likely advance their digital capabilities to include machine learning. Doing so can help them augment, process, and reconcile data in real time; elevate the precision of predictive analysis; and accelerate decision-making that considers multiple perspectives of a problem. Over time, treasury management will then implement more intelligent innovations – such as blockchain, digital assistants, instant payments, and robotics – and integrate them into existing processes, from regulatory compliance and reporting to payment and settlement processing.
Change in the Core Foundation is the First Challenge
The more intelligent technologies mature and grow more powerful, the pace of change will continue to accelerate. To keep up, corporate treasury organizations should establish a foundational digital core to ensure that their technology investments deliver on their promises and full potential.
Serving as the nerve center of the entire business, the digital core — typically an intelligent, next-generation ERP suite — consolidates internal and external elements into a single, living structure that goes beyond traditional ERP systems. It connects all processes, provides live information and insights, and seamlessly integrates the entire business into a single, coordinated, and agile network.
By combining the core capabilities of all data, processes, and intelligent technologies into a single centralized source, treasury organizations can go beyond traditional transactions. Besides gaining a common view of cash flow and budgets and automating processing, they enable every line of business to evaluate financial implications with the accuracy necessary to make sound strategic choices quickly.
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Ido Shamgar is senior director of Global Product Marketing for SAP S/4HANA at SAP.