From the March 2009 issue of Treasury & Risk magazine

Really Selective Upgrades

The latest product release from SAP, called Business Suite 7, is touted as a new approach that can reduce future IT costs and make future upgrades easier to implement. As SAP explains it, managers can now choose to deploy only the functionalities needed, without having to upgrade the whole solution at once. For treasurers, this means that the treasury component of the suite can be deployed at will. Jim D'Addario, director of marketing for SAP ERP financials, says that the treasury suite is freestanding. It can also be added to a company's existing ERP suite (though it is optimized for SAP's Business Suite).

Going forward, D'Addario says SAP will have enhancement packs for different functionalities. "This means that rather than coming out with a major point release every two to three years, we can provide upgrades for different processes every nine months, keeping the baseline suite stable," he says.

The new treasury component of Business Suite 7 features what D'Addario calls a "payment factory," which allows physical or notional parking around the globe of a company's accounts. Typically, he says, a global company has a "jumble of bank accounts" in various countries, making it "difficult to know how much cash you have at a given moment." With the new system, treasurers can obtain an "instantaneous view" of total cash on hand, and invest it appropriately.

Paul Hamerman, an analyst with Forrester Research, says that because the new SAP product is part of SAP's ERP 6.0, the treasury module is integrated with that system's business intelligence capabilities, which makes reporting tasks more efficient.
Early reports from customers are positive. Martin Schlageter, treasurer of F. Hoffman-La Roche Ltd., says the new treasury capability in the suite will help advance his firm's efforts to establish an in-house bank. As he explains, "In the old days, any treasury deal would be confirmed by the bank and [our company]. These would be by two paper confirmations sent by mail or fax." Now the operation can be automated, with Roche sending a SWIFT message to confirm the deal and receiving a SWIFT message from the bank. "The SAP system will be able to match the two confirmations and show the status of the transaction on a monitor, making the whole middle and back office administration of treasury deals more efficient," he says.

SAP's D'Addario says the company's customers are reporting that with the automation of cash forecasting, treasury and risk management functions made possible by the new suite, they are seeing "an 80% reduction in labor that was involved in moving data around."

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