Tools for Change: Identifying Treasury Transformation Opportunities
Treasury is no stranger to change, having to constantly adjust and account for policy changes, market fluctuation, and organizational expansion. However, most organizations are still falling short when it comes to keeping up with their growth and the advancements in treasury technology. They are either working with outdated software and programs or are facing internal disorganization that is impeding efficiency. If the events of the pandemic have shown anything, it’s that the world can change on a dime and if organizations want to ensure their survival, they need to be ready on all fronts, including treasury. One of the best ways to do this is by being able to identify treasury transformation opportunities, and by being ready to implement these changes.
To do this, and before any changes can be made or identified, it is critical for organizations to know everything there is to know about their existing treasury operations. A current state analysis helps organizations do this by mapping and analyzing all their treasury processes and technology. It will break down each process into steps and then identify process attributes and key personnel/resources that are aligned with each step. A thorough analysis of the collected information will prompt any potential disconnects, or pain points, within each process that hinder it.
After identifying the disconnects, processes can be broken down even further by assessing their maturity. This involves looking at the structure of the process itself, who is involved and how it operates. There are five critical enablers that drive each process performance:
For every treasury process, organizations must first look towards these five enablers and baseline them against industry-leading best practices by prioritizing questions like: Is there a clear owner for the treasury process and does that owner have specific authority set in place? Are the people executing the treasury activities subject matter experts, and do they have a positive attitude while performing them? How are processes measured and what KPIs allow you to truly measure their improvements? Answering questions like these for each enabler will help organizations measure their processes and better understand how the enablers play a role in their treasury and potential transformation.
After identifying and analyzing critical process enablers, organizations can then measure them using a process maturity scale. This scale ranks processes and enablers from informal, or unorganized with chaotic results, to leading, where they extend outside the company and yield world-class results. Opportunities for change stem from knowing where processes and enablers lie on this scale. If the performance enabler for a process is informal, organizations are able to identify the need for change and work towards pushing the maturity of it through performer training or even adding a new team member. This must be done for each treasury process and each critical enabler within that process, in order for positive and progressive change to occur.
Though treasury technology is constantly evolving, and the latest and greatest systems that vendors offer are appealing, it’s important for organizations to comprehensively map out their transformation. Knowing how their existing treasury processes and technology function on a deeper level, will help pinpoint specific problem areas to be fixed. This could save money and hedge against future pain points in the long run. It may seem like a daunting task, but tools like current state and process maturity analysis can help ease the burden.
For more information on Treasury Process Improvements, Treasury Best Practices, and Treasury Technology, check out our library of session recordings and content from the 2020 Elire Treasury Experience. Access to session recordings is password protected. To request access, please reach out to [email protected]. In the meantime, check out this post on Treasury Process Maturity which includes details on the five levels of process maturity.