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Software & Systems

Handy Info for TMS Implementations

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July 30, 2019

Assistant treasurer insights into dealing with TMS-vendor implementations and trials (and tribulations).

electronic tradingSince treasury management system (TMS) vendors began consolidating several years ago, their customers have routinely complained about problematic implementations and deteriorating service. Members of NeuGroup’s Assistant Treasurers Leadership Group (ATLG) recently shared frustrations and insights:

Third-party help. One ATLG member said the big consultancies hire the TMS vendors’ implementation experts, and thus treasury using these consultant for implementing a new TMS system can provide a major benefit: “If it breaks, we know how to fix it and we don’t need to bring in [corporate] IT.”

However, another member pointed out, TMS vendors’ business models very much depend on the implementation hours they charge for, and so treasury must ensure that hiring a third-party consultant doesn’t result in paying double. A fixed-price agreement may resolve the dilemma of vendors dragging out the implementation process, to increase billable hours. But be very specific in the state-of-work (SOW) agreement, “Because [the vendor] will say you’re asking for something that’s not in the SOW” and charge you for it, he said.

Find and hold on to the best. The level of talent varies widely within the same TMS vendor company, “so depending on who you get to do the implementation, you’ll have a very different experience,” said another member, who recommended obtaining customer references for the vendor employee assigned to do the job.

NeuGroup founder Joseph NeuGroup told the group about another member who specified in the license agreement with the TMS vendor which employee the company wanted on the job.

Project management is key. The group agreed that TMS vendors’ project management skills tend to be lacking, so it is critical for a company to assign a project manager to hold vendors’ “feet to the fire.” Mr. Neu noted a study his firm completed a few years ago that revealed a key success driver was tapping a treasury team member to be that project manager, “almost as a second full-time job.”

Every problem is new. Whether onsite or in the cloud, implementing and upgrading TMSs still requires a lot of work by treasury staff, and many TMS vendors now seek to do upgrades every two years. Several members noted that when a question arises, even a seemingly obvious one, TMS vendors often suggest it is the first time they’ve encountered it. “[The vendors] are dealing with your peers, and you know your peers are asking essentially the same questions,” Mr. Neu said, adding that to avoid such situations treasury may be better off changing its processes to match what the TMS is designed to do, rather than customizing the TMS.

Nevertheless, Mr. Neu added, by this point in time, TMS vendors should have a report library that has most if not every report imaginable to answer questions and deal with problems.

It could be worse. An ATLG participant noted often being negative about TMSs systems and their vendors, “But I can’t imagine having to do this stuff in Excel,” she said. Added Mr. Neu, “Corporates have to consider how much they’re paying for the TMS relative to the value it delivers. From a vendor perspective, it’s a very tough market to be profitable in, otherwise there wouldn’t be so much consolidation.”

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