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Treasury Technology

Avoiding Missteps on the Road to Treasury Automation

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April 18, 2019

A key risk is automating processes that are flawed or already outdated.

E-commerceTreasurers, like the rest of the business world, are racing to implement robotic process automation (RPA) and other technology that take repetitive, manual tasks out of the hands of humans. “It’s a huge focus area for us, and we’re allocating a lot of capital to it,” said the treasurer of a communications technology company at a recent meeting of NeuGroup’s Treasurers’ Group of Thirty (T30). The trick is knowing what to automate and what mistakes to avoid.

THINK THROUGH THE PROCESS. Before using RPA to automate treasury functions, processes must be analyzed to ensure they are optimal and up-to-date, to avoid perpetuating and perhaps accentuating faults. Anne Friberg, senior director of Peer Knowledge Exchange at NeuGroup, mentioned a warning that emerged from a recent NeuGroup meeting in Europe: Automating a process “just because it’s a pain in the neck” may result in upgrade issues down the road, not to mention potential governance issues (more on that below).

“That’s exactly what we’re finding; folks are trying to automate an existing process that’s really not the correct process to begin with,” one member said. One real-life example: A company already making payments via SWIFT from its SAP enterprise resource planning (ERP) system is confronting an operations initiative to automate cash application and bank reconciliation through a bank portal using tokens—which seems like a big step backward.

“Exactly, don’t automate a process the way a human would do it,” Ms. Friberg said, adding that companies should “make sure that as much as possible can be automated in existing systems or with a macro, and to put in a bot to perform the connecting steps between systems only if there isn’t complete machine-to-machine communication.”

GOVERNANCE RISK
. As one process after another gets automated, noted the treasurer of a major packaged food company, a problem with one of the lower building blocks could have broad ramifications. “Operations are going nuts with RPAs, but I don’t know whether at this point we have a robust enough governance process over this, and I fear something could blow up the next time we do an SAP upgrade or whatever,” another member chimed in.

MAINTAINING TREASURY INTELLIGENCE. What happens when the employee who applied RPA or otherwise automated a treasury process moves on to a different part of the company or a different company altogether? When new folks come in and they’re just using the automated function, and something goes awry, they may have no idea how to fix it. “I think that’s a huge risk,” said Ed Scott, senior executive advisor at NeuGroup and retired treasurer at Caterpillar. He recalled questioning a derivative-accounting number that appeared off, and the new employee in accounting said he thought it was correct, given he had plugged the necessary information into an existing spreadsheet designed to automate the process. “But the number was clearly wrong,” Mr. Scott said, adding that a solution may involve requiring employees to perform the processes manually for a time to understand where the numbers come from.

AUTOMATION APPLICATIONS. Treasury may not be on the company’s automation front burner, but NeuGroup members are considering or implementing a variety of applications. One mentioned simpler functions, such as investigations into travel and expense costs, enabling more proactive, upfront monitoring rather than relying on back-end audits. A goal of another member is to use RPA to automate confirming whether customers have in fact made recent changes to payment or address information, much like what Amazon and banks do today. Another uses RPA to sum up deductions on payments and match them to invoices, an otherwise “cruel and unusual punishment” to levy on treasury staff that’s much better handed off to a robot. A couple of members noted using Bectran technology to automate their credit systems.


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