STEP 3 - DEFINE THE PROJECT REQUIREMENTS

Step 3 – Define the Project Requirements  (Build Your Wish List!)

Correctly defining the Project Requirements is critical to the project's success.  This can take anywhere from a week to a few months to complete depending on the complexities involved.  It is important to draw up the requirements before any vendor presentations are given.  This way you will stick to defining the core features needed by your company and not get caught up in the bells and whistles of the vendor presentations.  Also, through defining your requirements in this manner, you may find that all you need is an additional module or change in process rather than a new Treasury Management System. This process will also help you highlight the weaknesses in the existing system in relation to the required core functionality.  Properly documented requirements facilitate the creation of a benchmark by which a comparison to proposed solutions may be evaluated.  This document must describe in sufficient detail the treasury features and the environment in which it will operate.  There are many ways to obtain the requirements but I suggest the following steps:

1-     Capture What You Know.  This step must be provided by the users of the system.  Review your current system and detail each feature you use.  Define the weaknesses if any.  Note the functionality and features you want to retain from your old system as well as the required improvements from the new system.  Add this to your list.

2-     Automation.  Analyze the treasury processes.  Break them down into step-by-step tasks to identify where a new system could improve efficiency through automation.  Add this to your list of requirements.

3-     Dependencies and Integrations.  In detail, list out how your old system integrates with other systems, i.e., banking, general ledger, reporting and market data.  What dependencies do you have and what is the timing of those dependencies?  Are there other departments that utilize your old system for balances or transaction information?  Does investor reporting utilize the BAI download for transaction information that you were not aware of?  Add this to your list of requirements.

4-     What Is The Plan.  Understand your company’s strategic plan.  The selection of your Treasury Management System must be in harmony with the plans of the company.  Is your company going from a decentralized to a centralized treasury group next year?  Is there significant growth planned for the future?  Is your company diversifying into other product categories?  This will help you in the selection process as to whether you need a moduler (scalable, flexible, deployable) solution or a canned solution (one that will not change over time). 

5-     Your Wish List.  List all the treasury features you would have in a perfect world.  In addition to balance reporting, cash positioning, and payment processing this may include:

a.       Real-time information consolidation

b.      Elimination of multiple banking cash management systems

c.       Fraud detection

d.      Bank Fee Analysis

e.       Market updates

f.        System interface with A/R, G/L, A/P

g.       Intracompany

h.       FAS 133 compliance

i.        Timely and accurate exposure identification and reporting

j.        SOX Compliance

k.    Forecasting

l.    Remote Access

By correctly defining the project requirements you will be able to quickly appraise the value of the future vendor presentations.  If nothing else, you have defined the core features that are required by your treasury group, created a wish list, eliminated any inefficiencies, and understood the true need (or lack thereof) for a Treasury Management System. 

STEP 5 - IDENTIFY TREASURY MANAGEMENT SYSTEM VENDORS

Step 5- Identify Treasury Management System Vendors

At last count there were over 40 Treasury Management System vendors.  The vendor choice is critical as they will be a crucial business partner going forward. The choice of vendors is as important as the choice of Treasury Management System. Questions like corporate strategy, office locations, plans to expand, market preference, and system architecture are important.  One of the most critical questions to ascertain is the financial stability of the vendor.  What happens if the vendor merges or goes bankrupt?  Will there be support for your new system?  Below are some key factors to look for in identifying a vendor:

           

1-     System Features – Obviously the vendor must provide you with the features you require.  You  will find that there is a wide variety of functionality offered.  Here is where you must look into the future.  You must select a vendor who can meet your needs now as well as anticipate your future functional requirements. 

2-     Years in Service - The number of years in production is generally a good indicator of how well the system is performing and how stable it is.  You do not want to be the beta tester.  

3-     Number of Clients – In addition to a long history, a large client base is generally an indication that the vendor has matured past all the growing pains that come with a new product or service.

4-     SAS 70 – SAS 70 is an internationally recognized auditing standard developed by the American Institute of Certified Public Accountants on service organizations.  This standard represents that a service organization has been through an in-depth audit of its control activities, which generally include controls over information technology and related processes.  Without this recognition you should be wary of the vendor and dig deeper.

5-     Hosting Center – It is critical to understand the availability, security, and location of the hosting center.  Is the vendor's Hosting Center outside its local office’s computer room?  This may be cheaper but also negates the vendor's capacity to obtain the SAS 70 compliance recognition.  Does the Hosting Center have power backup, automatic fail over?  Is it highly controlled?  Is there a disaster recovery plan?  These are questions that need to be understood before a selection is made.

6-     Service Level Agreements – When reviewing a vendor you must understand system up time, data security, issue resolution procedures, the frequency of upgrades, and the hour that support is offered.  It is important to remember that your SOX compliance could be jeopardized by the vendor’s low level of service.

7-     Technical Support – The vendor must provide enough people to ensure all functional and technical needs are managed.  This is even more critical should you choose an ASP (application service provider) as you are dependent on the vendor.

8-     Pricing – Vendors offer a range of pricing and services.  Typically there is a combination of system maintenance fees, monthly maintenance fees, per user fees, flat fees, licensing fees and/or contractual pricing.  Make sure to understand what is best for your company.  Negotiate everything.