I’m sure many treasurers will recognise what I say when I suggest that, historically, IT hasn’t always been the most supportive function when it comes to driving change.
But in my role at Ferguson that’s changed in recent times, thanks to both treasury and IT adopting a more enlightened and progressive approach to working together.
The change can be dated to the introduction and spread of cloud-based solutions. For treasury, it meant a shift away from a strong reliance on server-based IT maintenance. With cloud you might not need the same kind of support, and that’s because the focus shifted towards a more automated approach.
When I first encountered the cloud, I naively assumed we wouldn’t need IT support to implement it. And that was partly true, but I was off by some degree. In fact, we needed to adapt to a different way of working.
From my perspective as a treasurer it took me a while to engage meaningfully with IT. By that I mean I had to accept that we weren’t the most important department from a commercial perspective – clearly the branches come first. But at the same time we can’t be at the bottom of the pile given the facilities that we manage – in our case it was around £2bn.
We found IT were offering us common or garden support – they didn’t realise the unique position that treasury enjoys. We had to explain that if you lose access to the treasury management system (TMS) the business can really suffer.
Pre-cloud, it used to be that we were nowhere on IT’s radar, with the IT support function remote and distant. But as we developed our adoption of cloud, we eventually got a ‘service manager’ who acted as a translator between the two functions. And that marked the biggest change: the IT function sending someone to understand what our requirements were.
So collaboration is the keyword.
And we know that IT have to keep their integrity and to push back on ideas they don’t support. So there needs to be a process – I need to present a business case, and knowing IT as I do now, I understand what they need from me.
Now when I present to them we can have a productive meeting. We have to understand where they’re coming from. We need to think about it from their perspective: what about security, for instance? They won’t judge the output of the solution – that’s not their job, they rely on our judgement. But they will want to know about the tech vendor – are they reputable, do we need an escrow arrangement?
And I think attitudes about IT have changed. They are not just there in a compliance role – now they are our partners who are looking out for our best interests, which has to be a good thing.
Three quick wins:
This has to start with communication. You have to make the effort to engage with IT. And if you take the first step at a senior level then you can always delegate things further down the chain. So start at the top: the treasurer needs to speak to the head of IT and they can then get their key team members together.
And make it clear: treasury is not looking to put IT out of a job through automation. Instead they are working towards the same goal: getting what’s right for the company. That perspective can really help the conversation – everyone wants to make sure the systems we use provide 100% visibility of all our treasury transactions; are able to connect easily to current and evolving technologies; are secure; and ensure the processes we use are efficient and cost-effective. And technology can definitely help do that.
Once you’re talking and the dialogue is working, make sure you don’t just leave it there: that’s the fatal mistake. In my case that means keeping regular meetings in place every few months so that IT are aware of where we are in our journey. This may also involve active email updates to the IT contact on treasury’s technology roadmap, assuming that you are embarked on a treasury development plan! It is vital that the focus is on where you see your journey going. A lot of companies will say, “I just want IT to be there for us.” And that’s fine, but you’ll be missing out on 80% of what they could be doing for you.
At the bare minimum, your IT colleagues should be partnering with you to ensure that treasury is suitably protected against cyber fraud. Please note, this is only from a system/technology perspective. I see IT teams as the ‘gatekeepers’ for companies and should filter/fend off at least 80% of spam/unsolicited emails. The rest is down to treasury to manage by reviewing their processes and engaging with internal audit.
So look at it differently: you might need a new TMS or have a new plan that requires IT support. You should be going to them at the beginning and communicating your vision of where you want to get to ultimately, because they can help you signpost key areas and steps along the way. In our case that meant doing vital penetration (or pen) testing to make sure the system was robust and secure – and that provided them with the chance to give their advice.
It can be hard to put a number on the efficiencies you can achieve by working more closely with IT. But you can do it more easily if you look at the time savings you can achieve, because that’s what technology does: it makes things quicker and easier. We’ve worked out that it’s saved us 106 days since we started the project.
The next question is invariably, “Why has your headcount not reduced?” The reason is, as our business expanded (doubling in size), due to the technology in place we did not have to increase our headcount! I like to call this ‘future-proofing your treasury function’.
Finally, due to the significant investments made by our banking partners in technology, in particular one of our US banks, our chief information security officer has personally reached out to me to confirm his appreciation for being invited to participate in the bank’s innovative technology webinars on collaboration with fintechs.
Ultimately, for your treasury technology roadmap to be successful, there’s no substitute for clear communication.
Royston Da Costa is assistant group treasurer at Ferguson plc
