From the March 2011 issue of Treasury & Risk magazine

Straight-Through Stars Drill Down

As the liquidity crisis fades, companies are leveraging the latest technology to push treasury's semi-automated processes to straight-through status.

Although spending was constrained in 2008 and 2009, corporate brass happily paid for anything that protected the bottom line and strengthened risk and liquidity management. Now the focus is on using automation to cut costs out of high-volume, work-intensive activities like accounts payable, accounts receivable and payments, reports Maggie Scarborough, managing director of FinServ Strategies in Baltimore. Companies want to streamline to the lowest cost possible. Subscribing to hosted or shared services has taken much of the cap out of capex, allowing automation without busting budgets, she notes.

The revolutionary move to software as a service is nearly complete, says Wolfgang Koester, CEO of Phoenix-based FiREapps. "It's always a factor in RFPs these days," he says. "Even fairly small companies can afford the best solutions. Implementations that used to take months occur in hours." Resistance has melted to third parties' hosting sensitive payments and cash management software. "It's become the preferred arrangement for virtually all treasury applications," says Jiro Okochi, CEO of Reval in New York City, which hosts hedging and hedge accounting software.

Google Searches for the Leading-Edge Best

It's not surprising that Google would have one of the most automated, technologically savvy treasuries in the world. The company is rich, dynamic and global, and has both the predisposition and resources to adopt the best technology and configure it for its own operations. Google also has a treasurer and vice president, Brent Callinicos, who was a treasury automation star when he held the same position at Microsoft from 2000 to 2004. In 2007, Callinicos grabbed the opportunity to move to Google and essentially invent a treasury technology infrastructure for the young upstart blazing trails in Internet search applications. When it comes to automating treasury processes, if Google can't do it, chances are that nobody can.

Microsoft Builds Big Automation

Given the size of Microsoft's global cash flows and its wealth of technological and financial resources, it would be surprising if the company were not a front-runner in treasury automation. And treasurer George Zinn and his 100-person worldwide team, which includes credit and collections, do not disappoint. They have long been something of a role model, of course, although Microsoft's distinctive software-centric approach to treasury remains somewhat unusual and is difficult to imitate.

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