François Masquelier (ATEL): Group CIO, the dog in the manger?
Is the CIO the treasury's problem-solver? The CIO is often very orthodox and rightly tries to limit the number of IT solutions used by the company. This is understandable and justifiable. However, the end user, the treasurer, needs to be properly equipped with the right tools for the job. Denying them a tool on the pretext that it would be an add-on to a TMS, which the CIO naively thought would do everything in the treasury department, is a classic case. The trend towards full SAP4hana (for example) may be justified within a specific group strategy but is not applicable to all types of treasuries or company. There is no such thing as a 'one-fit-all' solution in treasury, and this can be seen in the complex architectures in place. Let's analyze the situation and ask ourselves the reasons for these differences of opinion to get round them.
Are CIOs the dogs in the manger?
Is the CIO the treasury's problem-solver? The CIO is often very orthodox and rightly tries to limit the number of IT solutions used by the company. This is understandable and justifiable. However, the end user, the treasurer, needs to be properly equipped with the right tools for the job. Denying them a tool on the pretext that it would be an add-on to a TMS, which the CIO naively thought would do everything in
the treasury department, is a classic case. The trend towards full SAP4hana (for example) may be justified within a specific group strategy but is not applicable to all types of treasuries or company. There is no such thing as a 'one-fit-all' solution in treasury, and this can be seen in the complex architectures in place. Let's analyze the situation and ask ourselves the reasons for these differences of opinion to get round them. The "Treasury Map" (see: www.treasurymap.com ) is intended to denounce the commonplace belief that only a TMS can do everything and meet all the needs of the treasury department. This is clearly not the case, and it's time to point this out to the CFO and, above all, the CIO. There is (generally) a lack of adequate communication, leading to misunderstandings on both sides, and above all to blockages on the IT side. In this article, we'd like to outline some of the keys to avoiding this type of clash, which is so common between departments. By understanding the CIO better, you can tackle an IT project with a greater chance of success.
What differentiate the CIO IT strategy regarding Treasury Management Systems from the treasurer's strategy?
The differentiation between the Chief Information Officer's (CIO) IT strategy and the treasurer's strategy regarding Treasury Management Systems (TMS) and other treasury solutions largely revolves around their primary focus areas and core responsibilities within an organization. The CIO focuses on the technological aspects of the TMS. This includes considerations related to system architecture, data security, integration capabilities with other IT systems, scalability, and overall IT infrastructure. The CIO's strategy is primarily concerned with how the TMS will fit into the broader technology landscape of the company, ensuring it aligns with the organization's IT policies and future technology roadmaps. Although the tool should be exclusively selected by the Treasurer (end-user), the CIO may have concerns, remarks, and issues to address. However, IT remains a service provider and not the department in charge of treasury management. Sometime, in some MNC’s we can have some doubts about who is deciding? The treasurer’s strategy is centered on the financial functionalities and operational needs that the TMS must fulfill. The choice of his/her tool is aimed at optimizing financial operations, improving accuracy in financial reporting, and supporting strategic financial decision-making. The treasurer doesn’t care about IT considerations providing tools respect minimum features and security levels.
Implementation and Cost Concerns
From the CIO's perspective, the emphasis is on the implementation process in terms of IT resources, compatibility with existing systems, and managing the changeover from old systems without disrupting ongoing operations. They are also deeply involved in vendor selection from a technical standpoint, ensuring the new system can be supported by the existing IT team. Conversely, the treasurer is more involved in the functional implementation, training finance staff to use the new system, and ensuring that the TMS meets the specific treasury needs of the organization. Their focus is on achieving a seamless transition that minimizes disruptions to financial operations and leverages the new system’s capabilities to achieve financial objectives. The CIO focus on IT risk management, which is crucial, focuses on data security, system reliability, and recovery solutions. The CIO must ensure that the system is secure against cyber threats and robust enough to handle system failures without losing critical financial data, while the treasurer focuses on financial risks, including compliance risks, liquidity risks, and operational risks associated with financial processes. They look at how the TMS can help manage these risks through better visibility into cash positions, automated compliance reports, and improved risk analysis tools. The cost considerations may be an issue. It includes not only the purchase and installation of the TMS but also long-term maintenance, upgrades, and IT staff training. The CIO must balance the budget against the expected lifecycle of the system and potential future technology shifts. On the other side, the treasurer evaluates the cost of the TMS in terms of return on investment (ROI), focusing on the potential financial benefits the system can bring through improved efficiency, reduced errors, and enhanced decision-making capabilities. Understanding these differences can help in aligning both the CIO’s and the treasurer’s strategies towards a common goal of implementing a TMS that is both technologically sound and financially beneficial. This alignment is crucial for the successful integration and utilization of a TMS within an organization.
Primary Focus and Expertise
CIOs are primarily focused on the technology itself—its integration with existing systems, data security, scalability, and the overall IT infrastructure. Their expertise is in information technology, so they prioritize aspects that ensure the system is technically sound, secure, and compatible with the broader IT strategy. They search the simplest IT architecture possible and ideally to reduce number of solutions. The treasurers, on the other hand, are concerned with the financial functionalities of the TMS. Their focus is on how the system can enhance financial operations, improve liquidity management, risk management, and ensure compliance with financial regulations. Their expertise in financial operations drives them to prioritize tools that directly impact financial efficiency and accuracy.
Strategic Objectives
CIOs often have a strategic objective to maintain a streamlined and efficient IT architecture that can support the organization’s long-term technology needs. This might lead them to prefer solutions that are more integrated and scalable over those that provide specific functionalities desired by the treasury department. Treasurers are strategically focused on optimizing financial processes and outcomes. Their objective is to ensure the TMS provides specific features that support these goals, even if it means requesting technologies that are specialized and potentially challenging to integrate.
Complexified IT environment in treasury makes life more difficult and sales of projects harder.
The treasury IT solutions environment has become extremely complex and a TMS is far from being able to do everything. When you 'sell' the purchase of a TMS, you must present the tool with its capabilities and the functionalities it does not cover. A TMS must be accompanied by accessories to enable full cash management. The treasurer is still the financier who uses the most IT solutions in the whole of finance. This simple fact makes the treasurer the CIO's most important customer. But the diversity of tools also complicates the life of the IT department. Often, the treasurer does not define his or her needs from the outset or leads the CFO to believe that a TMS is self-sufficient. But this is not the case. This erroneous initial assumption distorts the debate when other satellite solutions need to be added to complete the suite and enable full treasury and cash management. The divergence in views between CIOs and Treasurers can often be mitigated through clear communication, joint planning, and a shared understanding of both the technological and financial needs of the organization. Establishing a common framework for evaluating the benefits of a TMS from both IT and financial perspectives can help align their goals and ensure that the system meets the comprehensive needs of the organization.