Implementing a TMS On Time and On Budget

By Ben Poole | 13 November 2014

What steps should you take to ensure that you can successfully integrate a new treasury management system (TMS) into your treasury department without wasting time and money?

Implementing a TMS is a big project for corporates. The process does not just affect the treasury department, but also IT and any business unit with connection to treasury. It is therefore vital that the implementation can stick as close to the budget as possible, and the 'project creep' is avoided.

Start As You Mean To Go On

For a successful implementation to occur, it is first important to take the time to ensure that the selection process has been gone through properly. "There are not that many systems out there, so corporates can tend to put together a list of the five that are most suitable for them and then stick a dart in the dartboard to decide which one they will pick," says Damien McMahon, partner at PricewaterhouseCoopers (PwC). "Many corporates believe that all the systems do what they want to do. The problem that can occur at implementation is that the system may do what you want to do, but the right scope hasn't been agreed with the vendor, or the right people may not be on the implementation team."

When defining what the scope of the project is going to be and choosing which vendor to go with, corporates also get to select the people within the vendor that they want to work with. However, this may not be as straightforward as you may imagine. "One of the large TMS vendors always tell us that they have 400 trained implementation consultants that can go on these projects, and yet whenever we are working on an implementation with them it is always the same four staff," says PwC's McMahon. "As we are working on multiple implementations, we know that these four staff are already busy on two or three other projects. This could delay the project."

In this situation, if the scope of the implementation project has not been set out in detail during the selection, the implementation consultant could be likely to implement something that is similar to the work on their other projects, as this will take the least amount of time and effort for them. "To get an implementation project to run on time, it is vital to spend time on selection," advises PwC's McMahon. "This is where you agree who is going to work on your project, you agree the scope, you agree the pricing, and you agree how important you are to that particular vendor."

A Clear Vision

Ensuring that a TMS implementation comes in on time and on budget also depends on your expectations at the start of the project. It is important that these are realistic, otherwise you may already be setting yourself up for disappointment. "It is important to have very specific and clear expectations about what you intend to leverage out of your investment," says Paul Bramwell, SVP of treasury solutions at SunGard. "This includes a clear definition of why you are buying the system, what you intend to get out of it, and a clear and measurable expectation of when the project is finished and you can declare it to be a success or not. This point does not have to be when you are 100% live, it could be based on an achievement, such as you have been able to stop using spreadsheets, or you have turned off the old system, for example."

Just as expectations over the duration of a project need to be thought through clearly at the start of an implementation, the same is true of the price. "The treasurer should always aim to go for a fixed price offer from both vendor and implementer," says Carsten Jäkel, partner, finance & treasury management at KPMG. "This is possible. It may sound difficult and require more effort at the beginning of a project, but once you have defined your functional requirements and processes and you know exactly what you want, then the vendor and implementer knows exactly what they have to deliver. At this point they should be able to offer a fixed price."

While achieving a fixed price may be more difficult for highly complex processes that go across the whole group - such as centralised payment processes or reporting on a group-wide level - for core functionality and processes it should be possible.

The final part of the jigsaw before starting an implementation project is to ensure that the right project manager is in place. The strength of the project manager is often critical to a successful implementation. "In a TMS implementation you typically have three different parties involved - the vendor, the client, and usually other third party systems that need to be implemented into the TMS," says Robert Pierson, VP professional services, North America for Kyriba. "Treasury has traditionally been rather disparate and has many systems - Excel, their ERP, connectivity to other parts of the business. Now that these are being moved into one system, it is key that the project manager understands how the data integration has to work and be presented in the dashboard to the treasurer."

The Implementation Phases

Once the pre-implementation planning has been completed, the project can begin in earnest. When the project begins, it is important that all participants are aligned to their roles, responsibilities and milestones for success. "Many times people do not spend sufficient time evaluating the implementation plan as part of the buying process. It is almost considered as an afterthought, but it actually is one of the most important parts of selecting a treasury partner," says Justin Brimfield, chief marketing officer at Reval. "Implementation plan review tends to come at the end of the selection process, but that is when selection fatigue can set in, compromising the right amount of time necessary to clarify vision and scope." 

The key phases of an implementation project are the design, build, and testing stages before going live with the new system. "It is important to spend a good amount of time on the design stage," says PwC's McMahon. "You need to be very clear on what your scope is, and then document it. Nobody likes doing documentation, but the fact that you have documented it really forces you to think through the details. We even get clients to document all of the options that were considered and the ones that were rejected." Carrying out this level of documentation avoids people changing their minds midway through an implementation and questioning why the project is not being done another way - vital if you want to avoid repeat work and therefore a longer project.

By being very specific about the scope of the TMS during the design phase, the build phase of the implementation project should be relatively simple. "If you have been thorough in the scoping and design stage, the building stage should not actually require any thinking," says PwC's McMahon. "This has all been done upfront and should be in the design blueprint. All you have to do when it comes to the build is literally just type this in."

The final part of the implementation process is the testing phase. "Vendors and some corporates are inclined to cut the testing stage short as they don't see the value," says PwC's McMahon. "However, we think that you need to test every eventuality. Normally we would have three iterations of testing - the first unit testing and then two cycles of user testing. There is always something new that comes up, even on the third cycle."

It is better to find these bugs during extensive testing than after the go-live. This avoids the budget creep that occurs when you attempt to fix faults once you are live on the new TMS.

By Ben Poole, bobsguide Contributing Editor

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