The future or a gimmick?
In recent weeks, COVID-19 has made homeworking and decentralised collaboration the norm. The challenges of working together digitally in this situation are quickly becoming clear. One area affected by this is treasury reporting.
Treasury reporting today offers many possibilities at the touch of a button. This could be creating real-time financial statuses, company-wide liquidity reports with budget/actual comparisons or integrated simulations of risk scenarios. A variety of different approaches can be followed to do this. Many companies use the reporting solutions integrated in their treasury management system (TMS). This can provide an integrated solution, albeit one with limited functions. Exploring beyond the range of existing reports isn't always easy, but it's definitely worth it. Some companies go even further and integrate a business intelligence tool into their system landscape, thereby overcoming the problem of elaborate coordination between different systems and data sources. Other companies are still in the discovery phase when using treasury data and insights and use an Excel solution developed over time alongside their TMS reporting. Irrespective of the tools and level of configuration involved, most treasurers and CFOs see treasury analytics as gaining constantly in importance, and something that must be further expanded in the near future.
But companies are faced with several challenges in realising a targeted system of treasury reporting. Often, both requirements and available data and their source are not adequately defined or known. Many reports and figures rely on different data sources, meaning that it often takes more time to accumulate and adjust data, and data cleansing and consolidation can be prone to error. It is not uncommon for this lack of automation in the 'last mile in reporting' to result in a company falling back on Excel-based reporting.
Cloud-based analytics solutions would appear to be something of a breakthrough. Analytics as a service tools, such as SAP Analytics Cloud or Microsoft Power BI, provide a wide range of analytics and reporting functionalities. Beyond that, they also allow a uniform platform for company-wide dialogue based on uniform data and can often be superbly integrated into the systems used.
The analytics as a service approach must be distinguished from the approach of a reporting factory. A reporting factory is a specialised unit that is responsible for sometimes manual preparation of reports and which submits these reports to the decision makers. By using analytics as a service instruments, this function can be dispensed with.
One advantage of the SAP Analytics Cloud is that it can be integrated seamlessly into the SAP ERP system landscape already existing. If SAP Treasury potential is already being exploited, less work is required to set up an up-to-date treasury reporting solution.
Many companies are already familiar with the software as a service concept within the scope of the TMS. Analytics as a service refers to a cloud-based BI solution in which the users can apply all steps as a service according to their needs, from data collection to report preparation to the analysis of complex data. The software provides all functionalities and the necessary IT infrastructure as a 'service'. This means that, in just a few clicks, users can access a wide spectrum of analytics functionalities through a web interface, from data collection to the best practice reporting solution and a number of ad hoc analysis possibilities.
But it's not just the standardisation of reporting processes and the wide range of functions that make cloud-based BI solutions attractive. A SaaS solution also offers advantages for companies from an IT infrastructure perspective. For instance, many companies benefit from a reduction in investment risk concerning servers, licences and project resources; a scalable, modular approach; as well as from a high degree of cost transparency, always having the latest software versions and a reduction in IT and process complexity.
SaaS-BI solutions also offer clear advantages in treasury and finance departments: it can often be found that the biggest need for support and automation within those departments concerns the preparation and analysis of figures and reports. These often present the biggest challenges for many process interfaces and contacts across different departments. Different to monolithic systems or on-premises BI solutions, where external access or consolidating different data sources is often combined with a lot of time and effort, a SaaS solution offers all stakeholders flexibility of access, in all places at all times, and is therefore the perfect platform for collaboration and teamwork.
The overriding objective of analytics should always be the preparation of relevant information as a tool for making decisions. In this regard, modern cloud-based BI solutions in treasury reporting provide support through simplified and harmonised data collection, strong analytical functionalities and computing power on demand.
Many of the leading providers of cloud-based BI solutions are focusing increasingly on using artificial intelligence, besides conventional reporting tools, to identify complex interrelationships or to manage large, apparently rather unstructured masses of data. This makes data transformation and data analysis user-friendly and easy to execute. Statistical procedures allow unexpected insights to be gained into volumes of data. For example, macro or microeconomic market signals and sector information from international markets can today be applied to liquidity developments, allowing a company to react to sudden market swings.
But function-based workflows, from data entry to the ready-made template dashboard, do not mean lengthy preparation cycles. Tools such as SAP Analytics Cloud, combined with the related Treasury Executive Dashboard, allow treasury reporting to be automated to a considerable extent. Productive data from SAP Treasury, such as Cash and Liquidity Management, Treasury and Risk Management as well as Financial Accounting, are read without data replication and presented in the most suitable way using many Best Practice Analysis Diagrams. This means that insights can be gained in real time into treasury processes, to get uniform overviews of traditional KPIs on liquidity, cash position and external financing volumes. For example, it would then be possible to analyse a deviation between the expected interest income and the actual interest income incorporating interest instruments.
Another possibility is to use standard extractors provided by other analytics platform providers, such as Microsoft, Google or Tableau, to export the relevant data for the treasury department and to prepare it for reporting.
In addition to the standard plug and play solution, the self-service reporting is presented in a very user-friendly manner. By applying all the classic BI functions such as drag & drop of dimensions and figures as well as recommended diagrams based on the existing data relation, the user can prepare an ad hoc analysis with minimal fuss. This analysis can then be provided directly to the recipients via the web-based platforms, and analysed and discussed across the company in a uniform manner. Thereby, the providers are closing the information gap in the dialogue between decision makers and are offering a consistent platform for making decisions based on figures.
More and more companies are facing the challenge of taking new steps towards developing their treasury reporting, to meet the increasing information requirements of global companies while providing the necessary agility.
Cloud-based reporting solutions are thus at the forefront of the treasury of the future, the intelligent treasury. These solutions promise to simplify the resource-heavy undertaking of data collection and also to provide considerable knowledge gains thanks to the use of the latest tools and technologies.
However, with all visions of an automated and fully integrated reporting landscape, it remains necessary to define treasury reporting requirements in such a way that the technology can be supported based on needs and tailored to a company's specific circumstances. In selecting from among providers, therefore, a company should not principally be asking 'What is the best tool?' but rather 'Which tool fits best to us?'
Source: KPMG Corporate Treasury News, Edition 100, April 2020
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