Four Things to Know Before Asking the CFO to Fund Your Treasury Technology Initiative

The spotlight has been shining brightly on treasurers as their role continues to expand without the proportional funding. Well, to quote the do-good animated sailor, “That’s all I can stands! I can’t stands n’more!” While in Popeye’s case this quote was generally followed by squeezing a can of spinach and gobbling down the green stuff to gain strength, some treasurers are having a more difficult time squeezing the green stuff needed from the CFO to fund treasury technology investments.

Technology investments are being propelled by the need to deliver meaningful and actionable information to the CFO, but this requires using advanced tools and analytics and technology that enables broad business process optimization across the global enterprise. A tech initiative that has this kind of impact, that can help treasury deliver real business value to the organization, deserves attention – and funding – from the CFO.
Before treasurers make their case to the CFO, they may want to consider the following:

1. How will the new technology impact your organization broadly?

While automation is a compelling argument, it may not be enough to convince the CFO to loosen the purse strings. If the technology you are evaluating is leading, next generation treasury technology, then it will be important to demonstrate how this technology is transformational. How will this technology implementation allow you (the treasurer) and the CFO to make more informed decisions? The impactful trends driving transformation treasury projects include a more complete view of exposures, treasury centralization, mitigating commodity price volatility and enhanced board reporting.

2. Is the technology broad enough to grow and scale in the future?

Consider whether the system you are evaluating can take your vision well into the future. For example, can the new technology reach across the enterprise with a workflow that enables global teams to collaborate effectively, without the heavy upfront investment in IT (hardware, software, data, security, etc.) and will it scale easily as you expand into other markets, or grow through acquisition?

3. Have you assessed the costs associated with keeping things the same?

Well here is where it gets interesting . . . do you know the costs that you currently have in supporting the systems or tools that you have in place today? Some of these numbers are easy but others might be well out of sight.

    • Recurring payment for existing treasury system
    • Anticipated upgrades associated over coming 3-5 years
    • Production and backup (DR) hardware required (either onsite or in your vendor’s ASP hosting facility) to run the current system
    • IT resources (same as above, your people or the ASP’s people)
    • Market data necessary to fuel the treasury system, including rates and bank data

When painting the picture to determine the costs of keeping the status quo, evaluate your current operations by placing a value on quantifiable savings in key risk areas:

    • Global financial market risk
    • Global cash and liquidity risk
    • Regulatory compliance risk
    • Operational risk

Work with your vendor for help in quantifying the details. Reval, for example, has an ROI model that can help with this process.

4. Have you brought key stakeholders around the table for input?

Gather requirements and information from others internally, including accounting, procurement, regional treasury operations, and investor relations, so you will be able to communicate needs, scope, support teams, etc., with the vendor and other key stakeholders throughout the organization.

The above touch on just some of the points to consider when evaluating a transformational treasury technology investment. Understanding how the investment will improve the organization more broadly will help make a stronger business case to the CFO. To read more about the process click here.

1 Comment

  1. david k waltz on December 3, 2013 at 12:50 pm

    This is can be a difficult struggle – the benefits always seem to be more intangible than the costs. For example, if reducing risk is a benefit, ‘long tail’ risks can really move the needle if we move just one decimal point – say from 0.001% to 0.01%. Yet, at this level such precision is almost purely subjective.