Financial Information TechnologyGlobal LiquidityTechnology
Treasury ManagementTreasury TechnologyWorking Capital Management
A convergence of improved technology and vendor alliances is putting the prospect of a single view of all corporate cash and risk within reach
With a couple of clicks on the right buttons, Fred Schacknies and his treasury and finance colleagues at Lucent Technologies Inc. can see, real-time, all of Lucent's more than $4 billion in bank cash and cash investments. Well, almost all and almost real-time. Daily reports on more than 98% of Lucent's bank cash are available through the electronic polling done through Lucent's Trema treasury workstation. While the other 2% has to be updated manually from monthly paper statements, he concedes, it really is too small to have an impact on liquidity decisions and cash forecasts.
For these calculations, Lucent benefits from a high degree of integration between Trema and its ERP system from SAP, explains Schacknies, director of in-house banking. "We have very smooth, extensive information-sharing between Trema and SAP," he says. "We're still looking to expand the scope and functionality of those interfaces, but we're very close to where we need to be, especially where A/P and A/R are concerned."
Workstation-ERP integration is not unusual, although performance varies from case to case. But during the last few months, Lucent has been able to expand the data feed into its workstation—well beyond what the ERP can provide—by tapping into what Schacknies calls 'the sales funnel and sourcing channels.' "Trema is interfaced with those portals to get an updated view of expected revenue and expenses" before they show up as A/P and A/R, Schacknies says. "We have access to the same information the sales people use to make their sales forecasts."
The difference has been the flexibility of a 2004 installation of Trema's Finance Kit treasury workstation. Before, Lucent's treasury relied on local controller staffs to send business forecasting data in report form, which would be manually aggregated and keyed into the system. With Finance Kit, Lucent gets a sophisticated workstation that can link to other technologies, including its ERP. While IT departments still hate interfaces and push users to do as much as possible within the chosen ERP system, Trema claims its SAP interfaces are now so good that they mimic internal SAP interfaces. "We integrate with SAP just like their modules integrate with each other," boasts Joergen Jensen, head of product management for Trema.
The process is not perfectly seamless. "We still have a two-step process that requires some mapping and reformatting," Schacknies notes. "But considering the amount of data involved, it's remarkably automated." Most importantly, Schacknies adds, the configuration has morphed from a reporting tool to a solution integral to planning and management strategy.
Don't look now, but after years of solutions that fell short of promises, things are finally coming together in the world of financial technology. Vendors that haven't merged are collaborating to make their systems work together seamlessly. Technical standards that make it easier and cheaper to integrate disparate systems are gaining favor. More flexible technological infrastructure, often involving service-oriented architecture (SOA), is becoming de rigueur. Dashboards are at once getting simpler and more robust. While phrases like "seamless integration," "end-to-end solutions," "straight-through processing" and "no more information silos" still describe an ideal world of best practices, the gap between the real and the ideal is closing fast. It seems tantalizingly possible that by the end of the decade—only four short years away—finance staffs could have at their fingertips a single, real-time view of all cash and all risk, across an entire enterprise. Cut-and-paste may become as quaint as calligraphy.
THE TIPPING POINT
"We're at the dawn of the era of financial enterprise applications," insists Sanjay Srivastava, COO of Aceva Technologies, based in San Mateo, Calif. "That game is bringing disparate streams of critical information under one umbrella and presenting it in one view. It will bring consistency across all the information silos and cause data to cascade automatically to where it is needed. Bringing together all that information will let treasury and finance staffs optimize cash management, risk management and regulatory compliance. The concept has been talked about for years, but real progress has started to accelerate in 2006."
What's even more exciting, this latest functional ascent in finance technology is not likely to be limited—at least by price or necessary resources—to only the largest companies. Because of the willingness of tech vendors to form alliances, integrate systems and rely so heavily on open-access technologies like SOA, this single view of cash and risk will be attainable for the middle market without the kind of staggering investments of time and money typical of past advances. "The technology is there today and it's no longer prohibitively expensive," Trema's Jensen claims. "The question now is not, 'What can we do?' It's, 'What do we want to do?'"
How eager are vendors to work together? Consider the case of Srivastava's company, Aceva, and Los Angeles-based Vengroff Williams & Associates (VWA). Aceva makes systems that are used for collections, and VWA does collections work as an outsource provider. "Aceva came to us and said, 'We have quite a few clients in common. Let's work together to build the right infrastructure for them, with no restrictions on where we go with this.' So we did," reports Robert Sherman, VWA's vice president of marketing. "We looked for ways to create integration points and put data in a collaborative, standard format, and we have been able to standardize how the data moves between us." This is high-level vendor collaboration involving joint sales presentations, a single contract that covers service from both companies and even benchmarking using a combined database of client information.