Modernizing Treasury: The Hidden Costs of Sticking with Legacy Tools 

Legacy Treasury Tools get the job done … for the most part. What does it take to get there and what are you missing out on? Is there enough value in modern tools to motivate early adoption?

The Long Road of Legacy Technology

 

Legacy treasury tools are built to be flexible, but that flexibility comes at a cost. Setting up a new treasury management system (TMS) involves a long road of blueprinting, designing, gathering requirements, and implementation.

The flexibility offered by most legacy systems is powered by blood, sweat, some tears, and often comes at a significant cost. This process also takes numerous months or even years to complete, depending on the scope. For far too long, this has been the norm.

DALL·E 2024-06-25 12.54.49 - An illustration of a treasury professional at a desk, working on a computer with spreadsheets displayed on a large screen.

The Cost of Implementing a Treasury Management System

 

There are two primary costs typically associated with setting up a TMS:

  • The cost of an implementation team to work with you to design and implement the system. This is often a huge barrier to entry due to its cost.
  • Time from treasury and other teams within finance in addition to their daily job dedicated to the implementation for months and months.

These costs are critical. With the length of these implementations, estimates are rarely fixed bids and often run long and go over budget. Asking for and justifying the incremental cost is always a challenge.

This happens because legacy TMS providers have various departments and teams with differing motivations. Their sales teams are motivated to sell the product and often get compensated on the recurring license, while the implementation team is measured by billable hours and utilization. These motivations usually only align when the implementation team has an existing backlog, which is rarely the case.

Beyond the costs, implementing a TMS results in a significant toll on the internal treasury team. Doing both their daily work and project work often leads to burnout and multi-phase projects being halted due to the stress or cost of the project. This, combined with the reality that users only begin deriving value from the project after multiple phases of testing and completion, can cause a significant amount of stress. Doubling the amount of work for your treasury team can also lead to delays or cancellation of future phases — often for functionality that you have already licensed but can’t use without further implementations.

 

T4 timeline

A Refreshing Approach with Modern Treasury Tools

 

With modern tools, this road is clearer. With banks, there is always some level of uncertainty, as their motivation often depends on who the client is. This deviation, however, is single digit weeks rather than multiple months as seen with legacy platforms. Key relationship banks are often the first to get connected and at the end of the day, these are the banks that bring the greatest value.

This means that while the integrations are in progress, treasurers can begin using a modern treasury management system immediately and start getting value. Most users even find that using the new system alongside their legacy processes for the week or two of transition to be interesting and informative as they can clearly see the improvement.

Reporting in these modern tools is flexible, allowing for real use of these modern platforms. This flexibility empowers users to embrace modern reporting tools, automating numerous manual processes that used to require periodic downloads and manual manipulation via spreadsheets even with a legacy treasury platform.

Furthermore, these modern tools allow for custom reporting owned by treasury users without input from IT, so the business can action adjustments to standard reports and make necessary tweaks to truly embrace these systems and maximize value.

Modern treasury tools vary with what functions are live for customers. Often, FX, debt and investment offerings are provided later. Given that these new platforms are typically built to integrate, this information can be integrated from various sources, including ERP, accounting, or treasury systems to provide a complete picture of cash even when source data comes from various sources.

Choosing to implement a modern TMS is not an easy decision for many who have dealt with manual processes and numerous spreadsheets to perform treasury operations, particularly those who have been burnt by aggressive timelines and missed milestones with other technologies.

Embracing modern technology, growing with the provider as they build out their platform, and being a trailblazer is a leap of faith in many ways. When treasury teams take the leap, however, they can reap the following benefits:

  • Early adopter pricing
  • Input on new products and participation in key user groups
  • Nearly immediate time to value for your new solution
  • No more paying for things you can’t use or haven’t set up
  • Tools built for better decision making and the modern banking world

About Treasury4

 

Evaluating established legacy tools against new treasury platforms can be challenging. Treasury4’s founders, who are former practitioners, have created both a platform and licensing model to enable easy decision-making and risk reduction. Treasury4’s modern TMS provides near immediate adoption of the system for operations.

The platform was built with treasury and finance needs in mind. Our customers are involved in discussions on roadmap and functionality, and have the flexibility to adopt the system with unlimited users and the ability to activate and try new modules — as well as the option to cancel or re-activate at any time.

All this combined with a world-class support team that provides white glove service to guide teams through setup and maximize their use of the system.

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