Treasury Blogging STRATEGIC TREASURER

The Strategic Treasurer Book... Done

This post is being done for therapeutic purposes after writing a book for Treasurers. This book is for Treasurers, Board Members and those on the path to being a Treasurer. It is also intended for Bankers and Vendors who sell to Treasurers.  Today represented the last day of proof edits (and the upload of those edits) to the publisher.  Relief is a good word for the feeling - like a 100lb backpack being dropped off partway up an ascent...

On this blog we will share more information about the book in the future.  However, the image below is of the book that will be published and available later next month - June 2009.  I hope everyone enjoys reading it as much as I enjoyed interviewing people and having this project moved to the completed category.  Okay, parts were fun to write - but it takes a tremendous amount of time.

Scam - Money Transfer warning

The following scam, and ones just like it, targets individuals and not businesses. Nonetheless, one of Strategic Treasurer's employees was in the bank the other day overhearing (not intentionally mind you, the person was upset and quite loud) the complaint of someone scammed with a method similar to this one. They were trying to get their money back.  It is doubtful they will get their money back - unless the scammers had to attend a family emergency and forgot to clear everything out.

The basic process is:

• Sign people up to be a 'mystery shopper'
• Send them a fake check for, in this example, $3,400
• Have them deposit it
• Have them send $3,000 of real money right away...to find out if there are problems with the money transfer system
• Find out the check bounced
• Realize the $400 of easy money was really $3,000 of a real loss

Why would anyone trust an anonymous person with $3,400? Or pay them $400 for a rather simple task?

This clearly sounds too easy to be true. Unfortunately, this preys on many people in difficult situations.

We pass this on simply as a warning to friends and family.

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Text from a scam email. The last names have been altered in case they used someone's real name
---------------------------------------------------------------------------------------------------------------------

From: Annie Y******

To: undisclosed-recipients:;

Sent: May 5, 2009 7:53 AM

Subject: Attention!

 

FIRST ASSIGNMENT ON MYSTERY SHOPPER !!!

Shopper's Guide wants you to run a survey on two  prominent companies in

your area.

 

The 1st is a Western Union   Location

The 2nd a Restaurant

 

There have been reports about laps in the services of their Management and

some of their staffs, Their complains   are based on reports which

their customers forwarded anonymously and Phone  calls which were also made

to the head office.

 

The Western union location was reported for evaluation for the

following reasons:

I)    Customers have reported their money missing

ii) Slow services

iii)  Unbalanced transfer charges

 

The 2nd company was reported to be   rendering

(I) Poor services

(ii) Rudeness to customers

(iii) Excess charge

(iii) Late opening time and Closing before time.

 

Your Secret Evaluation would be

1) To make a transfer of funds from this western union location to our

Mystery shopper, And the funds would be picked up by another mystery shopper

at another location where a customer reported her funds missing.

 

2) You would have to record the time at which you go to the location and how

many minutes it took you to get service.

 

3) You would be sent a check/Money order which would cover your payment of

$3000 and also for the duty. As soon as you receive the check/money order,

you should cash in at your bank, and deduct your $400, and use the rest of

the money for the services.

 

4) Upon receiving the funds, the locations address would be forwarded to

you, and also the Name and address of whom the Mystery shoppers

transfer would be made to. You would have to keep a comprehensive report on

every activity you carry out.

 

5) You would also provide me with the name of the cashier that attended to

you. So if you think you can take these Job get back to Us

with these Full Information below .

 

First name...................Last name...................Address

Line...............City.........................State.......................

.Zip/Postal code..............

Age..........................Marital

Status...............Nationality..................Occupation................

.....Home phone...................Cell phone...................

ID or Reference ................Email Address  ...............

 

Please send me a reply so that the check/Money order sent out to you ASAP

 

Yours  Sincerely

 

Allens W***********

Stockton on Tees TS16 0RW

Is right now the right time for Treasury Technology? What is the right reason?

Right now is a pivotal time for Treasury.  Right now Treasury needs absolute clarity on where liquidity is and how fast it can be accessed.  Right now Treasury also needs to be able to explain the risks inherent with all banking partners, investment companies, debt profile, as well as foreign exchange requirements.  Right now Treasury needs thoughtful and rigorous analysis.  Furthermore, right now higher management is demanding answers, and asking tough questions.  It seems like right now is when everything in Treasury is happening.

 If that is true, what are the right reasons to make a technology change right now?Is right now the right time to evaluate and change the tools in the treasury technology toolbox? It may be, but treasury first needs to make an honest evaluation. 

 Seizing the opportunity.

 There are at least three very good reasons to evaluate treasury specific software right now.  The first is when your treasury software has been sunset and is no longer being supported vis-a-vis Treasury Manager- Thomson/Selkirk (expiring on 12/31/2009).  The second reason to evaluate your tool set is when the treasury tool bench has become stale or even obsolete.  The third is when treasury’s ability to do thoughtful and strategic analysis has been overcome by the day to day necessary tasks.

 No Longer Supported Systems. If you are working with a technology toolset that is being (or has been) sunset you have a great opportunity.  The vendor of your old technology has forced you to change.   Obviously your company has took the plunge by moving out of excel, or excel’s cousin access, and into treasury specific software.  Having taken the plunge is an advantage as you already made the business case for the need, and you are now in the position to change whether or not you welcome it right now.  You now have some control over your own future.  As a side effect of adopting treasury technology you have probably realized some control and time savings, it is also likely that you never quite achieved all of your goals for automation.  If this is the case you have a great opportunity to re-evaluate your needs, goals and capabilities and audition appropriate vendors.  The platform that your current vendor is changing to may or may not be the best fit for your needs.  Since they have forced you to change, force them to prove their worth by starting a fresh selection process based on your needs.

Antiquated Software. 

Secondly, you may have a system or multiple systems and processes that are still supported by the vendor, but are none the less very antiquated and need to be changed in total in order to gain real productivity and control gains.  The equivalent here is using a rotary phone.  It may be a great rotary phone, but no matter what you do it will not have caller ID.  Some questions that should be asked:  Is the vendor making upgrades that keep the system current with other technology that you are using?  Are repetitive tasks able to be automated?  How easily are reports generated and routed to the appropriate people at the right time or only when certain situations exist?  Is the vendor committed to adding features, functionality and usability?  Do the systems and processes seem cumbersome?  How well documented is your system?  The answers to these questions should tell you if you should be going back to the market place to look at what is currently available.   

 If on the other hand you have never had an adequate software tool set then perhaps the current climate works to your advantage.  No one wants to be in the position of having inadequate access to liquidity due to an excel spreadsheet copy/paste or vlookup error. It is never a good environment to say that the business has suffered a loss because of a lack of understanding of inherent risks.  Now more than ever before mechanical functioning of Treasury is insufficient, analysis is the answer.  Careful analysis requires interaction between manager and analyst that simply cannot occur if the overriding concern is “Is this equation right?  Do these numbers tie?  When did you pull this information?  Did all of the banks report today?”  Can the company afford loss due to inadequate analysis, loss of control or inadequate reconciliation?  If the answer is no then the conclusion of the business case is already filled out for you.

 To wrap it all up, if the goals of treasury include maintaining adequate liquidity and manage risks appropriately there is no better time than now to reconsider the automation and technology support that makes it possible.  IT budgets and projects are tight or nearly shut off, but the risks are greater and the need for visibility, insight and analysis has never been more imperative than it is right now.  The question is no longer “Why Now” the question is “What happens if I fail to act now?”

 -r

Try before you buy - Caveat Attempter - Vendor Pitfalls (part 2)

Vendor Pitfalls:

 

The vendor puts a lot on the line by offering a free trial/evaluation of their product.  The potential client is now interacting with the software in a manner that is alone and unafraid.  If, instead, the software vendor is providing much aid during the process, they are now essentially implementing the software for free.  Here is a list of the potential vendor pitfalls:

 

1. Loss of Interest - Probably the largest, and primary, danger is losing an interested client due to the initial setup work required to get up and running.  If there is a lot of initial setup required, or just larger than the client expected, then the potential client might be lost in the setup or just muck it up a bit.  There is no one to guide them and no one to provide the simple guidance of having run through the process before.

 

 

2.  No gee-whiz - When doing a live demonstration of the product a vendor is able to point out some of the best functions and explain where that may be helpful to a client.  In the TBYB case, the client must providentially stumble upon this feature or function.  Hope is not usually a good marketing plan.

 

 

3. No Dialogue - Effectively, the client has traded that conversation with the sales force for a conversation with the F1 online help.  Not a big problem with Adobe Acrobat, but for treasury software?

 

4. Inability to demonstrate complex functionality -  If the client has no complex needs, this isn’t a problem, but how does the vendor know the client’s needs when they haven’t had a chance to really interact with them and understand how the client intends to use the software?

 

5. No bank polling- Since most treasury software must be able to dialog in some fashion with incoming bank information, the potential customer still must do much of the data pulling/ bank polling manually during the trial period.  Since automating this function is one of the major reasons companies implement treasury software, one of the biggest selling points is lost.

 

The TBYB model can cause a rush to selection that eliminates the level of commitment necessary to fully leverage the software. Too many organizations only build out their software through phase one and then leave it. Building it out all the way requires a significant commitment level. One bad possibility is that the TBYB model may cause a firm to miss making the level of commitment needed to drive all the value out of the software they should.

 

In the end, this is a seemingly confident marketing approach by some vendors in this space saying, in effect, “Ours is so good you can do it on your own, or with limited help.”  However, we would caution any company looking for TWS software and that is contemplating using this approach to beware of falling into the trap of sinking too many hours into the trial.  For software vendors in this space we don’t see a lot of upside potential.  There is the potential of more targeted and stronger sales leads.  However, it is likely that the complexity and set up requirements will turn off many potential clients, or cause repeated work during an actual implementation.  Caveat Tryer and Caveat emptor.

Try before you buy –Caveat Attempter

TBYB is not a new type of soft serve yogurt.  Instead “Try Before You Buy,” or TBYB seems to be one of the current fads in the treasury software sales process.  TBYB in treasury software is currently specific to the genre of software known as ASP (Application Software Provider) or SaaS (Software as a Service), software with which the client uses a web-based application to manage a treasury function.  In an ASP environment, user data and other tools are housed, maintained, upgraded and managed by the software provider usually, for a monthly or annual fee.  In treasury workstation software, an ASP has been typically targeted at the client, with a low to moderate degree of treasury complexity, needing a product that primarily operates along the lines of Cash Management. The ASP world is changing, however, with some vendors offering additional modules such as debt, investment, bank account management, and reconciliation, with most of the major vendors adding services or modules rapidly.  As modules keep being added, the competition continues to heat up. 

 

As a result of the perceived similarity in services the marketing teams of the TWS providers have been working on a way to court clients and show distinction, leading to the introduction of TBYB.  So far TBYB has been limited to the ASP offerings has not been used with any installed or enterprise type systems.

 

So what’s good about TBYB?

TBYB as a sales tool has historically worked well with certain types of software that are somewhat intuitive, well documented, and simple.  The pitch generally goes like this:  “Try it free for 30 days, and if you like it, call us, and we can arrange for the full product.”  TBYB has seemed to work well with simple, easily configured and intuitive software across the data spectrum from Adobe Acrobat to WinZip and just about every app that you can add to your phone or PDA.  The question is, “Will this work for Treasury-oriented software that is typically not simple, quickly configured or intuitive?”   

 

This marketing tool may help some agile software vendors attract targets at the lower end of the complexity spectrum.  A prospect with little complexity in business structure, with one or two main bank relationships, and with simple viewing or reporting desires may be able to quickly configure and test the product using downloadable bank prior day files.  The rationale is that this method demonstrates the product’s ease of use, intuitive interface (or lack of the same), and the ability to implement a solution quickly.  It also is an easy way to demonstrate the productivity tools, standard reports and capabilities of the product without excess time spent customizing a demo or answering a RFP.

 

However, there are some pitfalls both for the potential client as well as for the vendor. 

 

Pitfalls for the prospective client:

 

To the client trying this TBYB approach, there are at least 3 major pitfalls:  sunk costs, implementation without information, and unintentional decision making.

1.      Sunk Costs.  Any treasury system takes some time to configure - even if it is just a basic mapping of the bank account to the correct BAI file account number (where things like leading zeros cause problems).  This time, once spent, is sunk.  A natural aversion to doing all the work two or three times will cause most folks just to accept the product, even if it doesn’t meet all the requirements.  Who wants to do all the grunt work all over again? 

2.      Implementation without information.  Often there is a lack of clear understanding during the implementation process of the implications of decisions made in account, corporate or accounting structures that may impact later reporting, display or later functionality of the software.  Without the aid of the professional services group, it may be easy to create a potential problem.  Examples of this type of problem could be issues with company structure and its impact on reporting, cash codes or general ledger mapping etc.

3.      Unintentional decision making.  The client has adopted software solely on the basis of the free trial (and has unnecessarily limited the field) possibility due to a lack of an intentional decision making process (needs, requirements, capabilities and references).  Realistically, how many products can a corporate treasury practitioner test drive at one time?  If a corporation is in the market for software, they most likely won’t be able to work on the setup of more than one or two systems at a time, due largely to their own availability and resource bandwidth.  They will unintentionally limit the field to the couple of products they are able to try.

 

The next post will cover pitfalls for Vendor.