5 steps to treasury excellence

While each treasurer’s functional responsibilities may vary, every treasurer is looking for new ways to add value to their organisation. Some seek to do so by achieving greater operational efficiency or cost-effectiveness. Others try to optimise liquidity and risk management strategies. Many need to scale their activities to support new business needs resulting from international growth, diversification or M&A.

These aims are both organisational and personal. Treasury needs to be at the top table to inform and influence decisions that impact on cash, liquidity and risk; and as individuals, treasurers need to boost their personal visibility and authority.

DBS Treasury Prism is an award-winning tool that has been successfully helping treasurers do this. Treasury Prism is a highly intuitive, standalone simulation platform which complements existing treasury technology. Using Treasury Prism, treasurers can support their organisations through change by testing techniques, modelling solutions, and devising new ways to add value.

 

Step 1: Recognise the challenge but look for potential

As companies of all sizes expand into new territories, it becomes more difficult to harmonise cash management processes and liquidity structures. Regulatory, market, currency and cultural conditions frequently differ, and liquidity, risk and operational issues may become more complex. At the same time, treasury is playing a more strategic role as the wider organisation matures and expands. Consequently, many treasurers are focused on how it can add more value to the business. By understanding what is possible in each country, and how regulations, business and consumer culture are changing, treasurers can harmonise their operational processes and controls whilst taking into account regional variations, and develop integrated, scalable liquidity and risk management strategies.

Treasury Prism gives treasurers access to comprehensive, authoritative data on regulatory and market conditions in 24 countries across Asia and beyond to build knowledge, insight and confidence in navigating complexity, and identifying opportunities.

 

Step 2: Leverage data and intelligence

Access to ‘raw’ reference data is not enough. To deliver operational efficiencies, effective liquidity and risk solutions, or scalability across new and existing markets, treasurers need to be able to analyse data and develop insights. The volumes of data involved can be vast, and with regulatory, market conditions changing quickly in many countries, knowledge can quickly become out of date. Many of our clients report that it takes so much time and preparation to define, let alone implement, an optimal cash, liquidity or risk management solution, and the fear of non-compliance is so great, that they may postpone or cancel these initiatives entirely.

To develop meaningful, actionable insights, treasurers need to be able to combine complex reference data from different sources into a single platform. This includes data such as average balance and transaction volume data from banking systems, together with accounts payable, accounts receivable and treasury data.

Treasury Prism then overlays this consolidated banking and account data with intelligence such as permitted techniques and market and regulatory practices in each country. Treasurers can therefore see where the opportunities are to optimise cash and liquidity management, whether domestically, regionally or globally, and identify exceptions.

"Managing money across the Asia region is not easy due to regulations — this platform makes it easy to see what’s possible, with regulatory insights, through a drag and drop interface. It’s something not readily available in other treasury platforms."

Group Treasurer, Kerry Logistics

 

Step 3: Find the optimal

The next step is to move beyond identifying what treasurers could do to what they should do. Most treasurers base their plans on solutions presented to them by their current or potential banking partners. By modelling scenarios and benefits in Treasury Prism, treasury can look beyond solutions offered by individual banks and identify solutions that offer the greatest benefit.

"Treasurers tell us that it is often difficult to compare alternative solutions and approaches in an objective way. As a result, they have found the pragmatic approach of Treasury Prism extremely useful when putting together and presenting recommendations to the treasury committee or Board. In Treasury Prism, the results of different scenarios are presented instantly, showing the relative advantages and disadvantages, and markets that can or cannot be included, allowing treasurers to make informed, confident recommendations."

Aniruddha (Andy) Joshi, Product Owner of Treasury Prism, IBG Digital at DBS

 

Step 4: Show proof

With resources and budgets stretched across the enterprise, treasury is often jostling for budgets and resources, so it is essential to be able to demonstrate value clearly to senior management. Many treasurers find it difficult to quantify the cost and productivity benefits of a potential cash or liquidity management solution, which is a major obstacle when trying to develop a compelling business case.

Treasury Prism automatically calculates the financial impact of each potential solution and presents the results in an easily digestible way. This helps treasurers to compare and prioritise treasury initiatives and drive forward a treasury agenda that centres on benefits to the organisation. Clear, quantitative data also helps to mitigate implementation risk. Implementing a new cash management solution, even with an existing bank, is a high-risk project for corporate treasurers, and given the critical nature of their activities, such projects are often subject to significant internal scrutiny. Consequently, they may be sceptical about implementing new cash management solutions unless they have assessed, and are fully assured of the benefits of doing so, particularly given resourcing pressures.

"What takes a week today can be done in two minutes with Treasury Prism. This is the most innovative solution for corporate treasury I’ve seen this year."

Goh Seng Ti, General Manager (Treasury & Accounting), Isuzu Motors Asia

 

Step 5: Educate and inspire

Treasury does not operate in a vacuum and needs to engage proactively with a wide range of stakeholders across the business, including central functions such as legal, tax and other finance teams, as well as operating units. Treasury’s success in meeting its efficiency, liquidity and scalability objectives, and finding new ways to add value, depends on the support of these stakeholders as much as the technical feasibility of a proposed solution.

Treasury management can be opaque and difficult to understand for non-specialists; similarly, it can be difficult to communicate and inspire new employees, managers and remote teams with a single treasury vision.

Treasury Prism enables treasury teams to learn, collaborate and share knowledge easily in terms that are easily understood. This includes dynamic illustrations of account, cash and liquidity structures to demonstrate the benefit and seek support and consensus.

"It’s the first time I have seen a bank making such a system for their clients. It’s very comprehensive. With the search function, knowledge centre, glossary – it really covers all that a corporate treasurer needs in such a tool. We can use it to educate our internal and external stakeholders on cash management, saving time for us."

Henry Ma, Regional Treasurer, Emerson Electric Asia Pacific

 

Treasurers are hard-pressed to keep up to date with both the growing pressures placed on them by the business, and the regulatory, market and cultural conditions in which they operate.

 

Turning ideas into value

Treasury Prism provides a very easy way to create, compare, evaluate and present actionable scenarios quickly and in a visually compelling way to colleagues, stakeholders and senior management. By doing so, treasurers can turn ideas into projects and realise potential value. This is a vital way for treasurers to demonstrate value in quantifiable terms, boosting their profile, authority and career opportunities for the future.

 

Discover a spectrum of opportunities

Explore DBS Treasury Prism today to start building your own cash management simulations and discover opportunities that can shape your treasury strategy. 

 

 

The information herein is published by DBS Bank Ltd. (“DBS Bank”) and is for information only.

The information is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

DBS Bank Ltd. All rights reserved. All services are subject to applicable laws and regulations and service terms. Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by DBS Bank Ltd and/or its affiliates/subsidiaries.

 

Last updated on 01 Oct 2018