The Future of Treasury
The proliferation of the cloud throughout the finance world has led to some exciting changes in the daily operations of corporate treasurers. What does this mean for you? Business applications are hosted offsite and accessed through a secure connection in your web browser; payments now take a matter of seconds, not days; and API’s connect our applications to our data in real-time. This has slowly become a reality in the corporate environment, with some companies adapting to the new way of business while others are still holding on to the old way. The millennial generation is technology natives, and as they grow into management roles, the technology will continue to penetrate the finance space.
One hot topic, which is unavoidable to discuss, is automation and how it is coming for our jobs. As a technology company who propagates using technology to automate processes, our goal isn’t to reduce full-time employee levels, but rather to have those FTE’s become more analytical and return value to company investors. Competitive advantage stems from analysis and improvement on your operational processes. As the saying goes, the definition of insanity is doing the same thing over and over and expecting a different result. In the treasury space, if you have to borrow money on a regular basis because your cash position is wrong, ask yourself why. If your forecast is consistently off, ask yourself why. Operationally, you can be doing everything the way you were taught, but if you haven’t stopped to ask yourself “how can I make this process more efficient and improve my results?” then you have the wrong mindset. Changing a mindset takes a massive, concentrated effort and is not easy by any means.
There is a generation of treasury managers that believe that changing the status is an existential threat and afraid to think outside the box. For example, take a look at the car business, Tesla is worth 25 times more than what Ford is worth, and they invented the automobile. Talk about changing the status and returning value to shareholders. The old way of thinking is failing, take a look at GM, they had a functional electric car in 1999 but choose to discontinue the technology further. History is littered with these stories of companies gave up on operational efficiencies to improve archaic metrics. Don’t get me wrong; metrics are important, but figuring out which ones matter take analysis and trial and error.
Technology is not a snake-oil-cure-all, efficiencies will go down before they go back up. Once they come back up though, they will go higher than you ever thought possible. This is going to take the financial side of your company to the next level, differentiating your operations from the competition. Your competition isn’t holding on to the old way, and every day they are gaining a slight advantage over you. Don’t let the competition gain the edge over you, be the future to treasury today.
May 23, 2018
