Takeaways from NeuGroup’s TMS working group featuring discussion of automation, consolidation of ERPs and more.
Straight-through processing (STP) that involves several systems, including payments and bank connectivity, sounds great. But members at a recent NeuGroup TMS Tuesday working group session agreed that efforts to accelerate STP first require a more detailed plan for the overall technology end state of treasury infrastructure.
- For example, one member said his company is still unsure if it would be best to further integrate all payment processes into the ERP, or create a payment factory, which may sound like a nuance but requires technology process decisions.
Consolidation of ERPs. Members also discussed whether it is worthwhile to migrate all ERPs to one point, or to leverage the TMS to bridge several different ERPs. Conglomerates and serial acquirers usually end up with more ERPs than they want; but consolidating many into fewer or just one can be a slog.
- A self-described “portfolio of companies” is leveraging its Kyriba implementation to connect multiple ERPs to it to enable all its vendor payments.
Data lakes and one source of truth. For some very large companies in the NeuGroup Network, the number of ERPs and the enormous volume of payment transactions expose the vulnerabilities of a file-based process underpinning their payment execution.
- More and more companies are driving initiatives to centralize all the data in a repository—a data lake—that can be the “source of truth” for a variety of systems tools supporting treasury processes like payments, rather than having data sent around in files.
Automating payments and compliance. Payment automation is a big challenge, but another is regulatory compliance, a job nobody gets a kick out of but that can cause problems in a complex world.
- Managing bank account signers, FBAR reporting and KYC-related processes is high on the list of desired automation for members. Both FIS and ION have built bank account management tools; two members mentioned ION and said they were pleased with IBAM, its tool.
You have to start somewhere. With systems like FXall for FX trading and a TMS, the key is that all systems work together seamlessly.
- Does that mean that the FX trading process, for example, needs to always start in one place for it to work? Not necessarily.
- One member noted that the process can start either in FXall or in Reval, their TMS, and it will work either way. Other members concurred that both 360T and FXall have worked out the integration processes well.
With APIs, the key word is consolidator. APIs remain a hot topic, but MNCs with a large number of banking partners cannot have one API for each one. Similar to the service bureau concept, members agreed that they would not move from a direct connection like SWIFT unless there were some consolidator as a service-type vendor to reduce the APIs.
- Separately, adopting APIs is something most members assume they will eventually do as part of another transformation or implementation, not as a standalone project.
