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good morning everyone and thank you for joining today's conversation on the advance corporate Treasury simplifying connectivity and centralizing payments my name is Kevin Ruiz and I'm a principal with Treasury strategies I please be joined this morning by Bill North who is the director of corporate solutions at a software who's also a sponsor of this event today we're going to be discussing the key challenges and opportunities that Treasury Department's are facing in achieving operational efficiency connectivity and optimized payments centralization and control as an aside for everyone who's registered for this session and a day or two we will be receiving a copy of this presentation as well as a link to this recording and also should you wish to ask any questions you can do so in the question box in the bottom right hand corner of your screen and we're going to be handling those questions at the end of this conversation today and before I begin bill I guess you'd like to introduce yourself to the audience as well I would thanks Kevin and pleasure to be here today with my role as director of corporate solutions at Ace I get to work with corporate Treasury folks around the world in analyzing evaluating and implementing technology to help them specifically in the areas that we're going to talk about today Kevin which are connectivity and centralization so excited to be here and looking forward to our conversation great thank you Bill so we're going to talk about today is really three things one we're going to talk about the evolving needs of the business and therefore what that means for the Treasury function second we're going to talk about what's driving those needs and so bill and I are going to have a conversation talking about some of the solutions and some of the strategies that our clients have looked at to achieve meeting the needs of the organization so first let's talk about the evolving needs of the business for a lot of you on this call today you're familiar with Treasury strategies obviously but you are probably familiar with our annual State of the Treasury profession survey and webinar that we do to discuss the results of that survey we're in our ninth year of that survey and every year we hear things that are perennial issues for for corporate treasurers such as access to credit you know getting all the blocking and tackling in place but this year we have some unique issues around the following areas exposure and management of financial risk questions around centralized and Treasury functions the need for greater operational efficiency bank relationship management and really Bank relationship optimization greater visibility to cash and the ability of forecast cash better more consistent more accurate and timely reporting and then cyber risk is also a issue that we heard about this year but before I move on I want to ask you is this kind of the same themes that you're hearing from your clients they are Kevin and I will add that you know these are topics in my 15 years of working with corporate corporate Treasury folks these are topics that have been consistent a year over year which also tell me that these challenges aren't going away anytime soon great thank you bill so let's talk about what's driving this needed and don't I'm going to ask you some questions about this I want to get your thoughts you know when I think about these top issues that things that are top of mind of our clients and the people that responded to a two-hour annual survey I think about these these main issues in three real categories one I think about this in terms of connectivity to I think about this in terms of centralization and in three I think about things are exogenous that external to the Treasury function the different drivers that are also feeding into this area so so bill first I want to ask you something what's what's driving this need in in terms of connectivity so Kevin what what I see across the treasurer landscape regarding connectivity is just you know the growing number and the proliferation of different communication channels and and those could be external right commonly a lot of my customers talk about you know connecting to their external service providers their banks and whatnot but also internal connecting to internal systems or connecting to data sources within the organization they depend on on a daily basis and sometimes can be quite challenging you know regarding regarding the the banking channels and just the proliferation of those you know each one to each bank portal typically requires you know it's oaken right for security well I've come across treasure organizations that have a big bag of tokens so that's something that's a challenge I'd like to I like to help these guys get away from yeah also the data sources are changing right that you have to work with so you might have a lot of your piece but you know your IT guy could could walk down the hall and tell you hey we're upgrading the IT system or or you know we're changing ERP platforms as an organization and and those are systems that you depend on so you know they're always changing always evolving so that that need really never goes away and then emerging standards and formats so you know Kevin last month I sat through a conference and I heard about the emerging payment format is same-day ACH which kind of built on the iso 20 or 22 format I think it'll bring a lot of value to the treasury community but again it's just an additional format that that you have to interact with and have to manage and and those I don't think as we standardize that will be great but you talk about around the world you're still going to have to deal with a lot of standards and a lot of formats yeah bill that's really interesting because you know we always think about complexity not just the different standards and platforms and systems but we don't tend to think about is you know it's not just the external connections with you know banks and other partners and vendors but it's also the internal connections within systems and across platforms so bill let's move on and talk about some of the things that are driving this need for greater centralization help me help me think about that a little bit well a lot of corporate treasurers folks are telling me that you know they need the visibility into what's going on around the business into the end of the flows and into the points of risk but they also want to increase control and reduce a risk where possible and in one area could be you know an organization that has business units and sending payments to the banks that might be a point of risk where if you have less folks initiating payments and sending payments to the banks across the organization if that's being managed centrally there could be some reduced risk there and in a recurring theme Kevin is data right getting the right data to the right people at the right time and I think that's a consistent theme and we're going to talk about that throughout start a conversation but that is something that almost everyone is telling me and then uh you know the third topic on this is greater coordination with the business units right the folks that are out there doing business every day Treasury wants to support them and want to work with them right and the flow of data is important to that but also centralized visibility again is also very important to that great great thanks go it's it's interesting that you say that you know we talked about the greater coordination within across the business but really you're right it is about getting that right information to the right people at the right time one more thing I want to talk about is these external drivers things that are external to the Treasury function that are impacting it maybe maybe we could spend a minute here talking about some of the other needs that that's are driving these changes bill could you help talk about a little bit sure Kevin and these drivers are are consistent whether it's a connectivity project or a centralization project or any other project right these are just consistent drivers across what what we hear from corporate Treasury folks and that is you know just lack of resources you know the next Treasury person that tells me that they have ample IT resources and you know they never have a problem getting access to those resources it's probably going to be the first to be honest Kevin um and then the processes and procedures worldwide right they're there sometimes it can be undocumented very inefficient one of the one of the processes I can think of is you know a lot of organizations still rekey data into spreadsheets and sometimes it happens throughout the organization or even if it happens you know just a few times a day there's still that opportunity for errors for you know mistakes and just be very inefficient it's not automated so sure I come across a lot of manual processes still and then Kevin you know the final point on the external drivers is Treasury folks know Treasury write their subject matter experts on treasure what they're not subject matter experts in and I don't think we could expect them to be are all the difference for example technical standards right so you know connecting with this Bank in this encryption mode or or connecting to that service provider connecting to your ERP system in this mode they're just they're just not not enough knowledge and sufficient skills in the Treasury organization so again you find yourself depending on a resource that sometimes is very very scarce yeah yeah billing and these these external drivers these are common not just to the Treasury function but across most businesses I think we'd all like to have an endless amount of resources in terms of people and in terms of dollars unfortunately I don't have that magic wand so bill as we as we move to page six how many things what are some of the solutions and some of the strategies that you've seen clients select to I guess to help increase functionality and increase value to the organization but I guess really to provide you know greater connectivity and greater more robust centralization and greater control so Kevin what we've seen the organizations that we've worked with do is is really tackle it in a phased approach right so the the building block for this approach and the foundation of it is managing your connectivity better again internal connectivity and external I can't reiterate that enough that the external connectivity you know there's there's a lot of providers and networks out there that will that can provide a single point to service providers but what where they fall short is internal right on all those ERP systems and all those data sources that you need to connect to and really you know data needs to flow to be able to move on this kind of maturity scale we'll call it data needs to floo in a single single channel in an automated secure and agnostic fashion right so you need to be able to adopt new technologies or new banking relationships or say you want to you know connect to a new network you should be able to do that but not be limited by that and then if we look at so now you've got your connectivity managed right now we're going to move on to centralization and really centralization we think about in three different ways the first kind of phase of functional centralization is what we call a payment hub and that that's going to turn that's been around for a number of years and really what a payment hub does Kevin is it will help you centralize all your payments and/or collections across your enterprise right the second stage of this maturity scale under centralization would be going the next stage to payment factory and utilizing a payment on behalf structure so this structure so payment on behalf structure would be where central treasury makes all the enterprise payments on behalf of their business units so you know maybe an organization has allowed business units to keep local bank accounts across the globe and they can make payments locally there here you're reducing those bank accounts and you're you basically have to have just a single bank account for every currency that you have so we think there's a lot of value there and then and then the third bit of centralization is really the one that you're delivering to your business units because right if you go through the payment on behalf of stage you're taking away their bank accounts right but they still need that transactional data to do their business right the payments and collections and balances with that in-house bank so the third phase is really delivering that back to them via kind of an internal banking portal where they have a single view of their data fantastic so so bill really what it sounds like to me is I think you use this phrase it's really a maturity scale or maturity spectrum right where clients are taking what you would you characterize as a phase to achieving greater performance right and again you know that's really our vision as well it's a treasury strategy division as well that that the Treasury function is not a cost Center it's not profit Center but it's really a value creation center so that that really makes sense to me so bill as we move to page seven let's do a little deeper dive here and think about connectivity first you know some of the challenges that I've heard with with with my clients is you know there's this this challenge around having these unique novel external connections and different formats for each bank each partner in each payment type right there's a dependence on those banks specific channels which creates a high cost of potentially changing banks if that is something that has to be done and then you know as you mentioned before there's that need in that lack of critical IT resources that are required to not just build but manage the connections to your ERP system your TMS system your GL what have you so so we'll help you think about what are some of the solutions that you've seen clients adopt to address connectivity so what our clients have done is if they've been able to consolidate all their connections onto a single platform what that gives them from a solution perspective is a platform that can help you manage and connect to virtually any payment form an out there right so one maybe it's not even invented yet or or is in a region of the world that you're not doing business and yet but but all of a sudden you make an acquisition and now you have to deal with it so apart from that that will help you handle all those payment formats and then again is agnostic to the bank to the any specific technology and to the channel or the network you need to be able to be independent and and the benefits are getting are pretty impressive and you know those payments that are flowing through this platform you're able to validate those payments so so before the payment ever goes to the bank you're able to make sure that that is in the right format it's got all the right data feeds the data fields in it and make sure it's going to go straight through and if it's if it doesn't have in it this platform should be able to repair talking about the internal connectivity Kevin you know people think about going down this journey and and they go man there's a there's a lot of work in changing say the ERP system or how we work with a source of data well this box room should be able to do it for you right you should there should be minimal impact on those ERP systems which would then again reduce their dependency on those very scarce resources and then and then a lot of our customers are able to reduce their bank fees particularly because they're bringing in their safe transaction reporting in one place across the organization so as opposed to you know various people pulling reports from overbank portals across the world they're able to bring in that reporting centrally and then disseminate it throughout the organization fantastic so as I hear you and I think about the solution really the benefits the benefit is is really the important part to me and really to my clients and hopefully to everybody on this call it you know it's really about less complexity greater control yeah I would add reduce potential for air and then obviously reduce cost and it goes back to something that you mentioned earlier it's about getting that right information to the right people at the right time so go as we move on to page 8 let's let's talk about the challenges here as we move along what you had termed as the maturity scale around centralization as we talked about greater functionality and greater value again you know you mentioned it's a phased approach you know when we talk to clients around about the questions regarding centralization they they talk about their challenges of you know the increased cost of payments and really the increased cost of their operations right again we're talking about the lack of critical IT resources required to help manage these kinds of changes but then also when you look at centralization there's a myriad of challenges around different workflows not just domestically but around the globe for our multinational clients so again Phil help me think about some of the solutions and and potential benefits as you start to address this basic level of central so Kevin getting a little bit more detail about you know what we call the payment and collection hub is again a single platform where all your payments flow right the the the platform will give you a single view into any payment across the organization so in in one screen you'll be able to track down any payment across the organization who it was initiated by who it was approved by all the supporting documentation you know you no longer do you have to go to multiple sources to go find that information in a single screen you can get all that it also enables you to standardized global formats so again reducing complexity as a theme that we've talked about a couple of times right and and this will help you reduce the complexity of the multiple global formats and then you know the workflow piece governor I want to talk a little bit about that because building on what you said you know I've sat down with corporate Treasury folks and they said listen we're global organization you know we have business units around the world and you know they tell me that they have to say for payment workflow for example they have to have a workflow that's a little bit different than ours and that's okay but central Treasury still requires the administration in control and visibility into that workflow and making sure that that workload being followed so so the platform and the potential payment hub would allow you to do that that have different workflows around the globe but maintain that central visibility and control and the benefits our customers are really saying here is is first and foremost reduce costs and specifically around payments you know there's there's really two cost sources for payments there's the external cost right so the fee that you pay the bank or the payment provider but there's also like we talked about the internal cost of you know hooking into those systems making sure the data flows say you know what happens if you send a payment to a bank and it gets rejected there's a cost and time that you have to go through to investigate the problem to set to resend it right and and you know hopefully you didn't miss that payment and when it was due but that could have been a possibility - reiterating the the reduced dependency on the resources IT and others the payment hub will deliver to you and then again about the workflows that consolidated centralized view interesting interesting in a bill as we move towards this more advanced controlled level of sales centralization you know we have organizations that grow not just in terms of revenue or in terms of headcount but they also grow geographically and globally and that means greater exposure to things like cross-border FX payments and different activity in multiple jurisdictions with you know different legal requirements right and you know again it is about this lack of visibility in control this this need for increased view of the cross-border payments and the fees associated with those the frustration with having global accounts that are being opened and closed and manipulated for deposits and collections but but really you know it's more than just about the treasury function it's also about the business right because the business units being affected by these kinds of changes are you know they're they're going to be concerned that is greater centralization occurs the units they lose that critical data they need to make informed decisions that drive performance so again they'll help me think through like some of the solutions that you've seen your clients adopt and what those benefits have been that have come from those solutions yeah absolutely Kevin and I'd actually like to build on what you that third challenge that you just mentioned and that's the business units getting the information that they need as I said I've been in the Treasury space for for quite a while and you know payments factories and the payment on behalf structure it's not a new concept you know I was reading articles back in you know early 2000 that you know primarily in Europe a lot of folks you know went through a process of implementing a payment factoring and what they found was they reached varying degrees of success because the value for that payment Factory or the payment on behalf of was really focused on Central Treasury okay the business unit kind of felt hey you're taking my checkbook away but you're not delivering back what I need which is you know the daily transactional data visibility into the flows etc so really that challenge really you know can't be overstated but the good news is their solutions out there and and the foundation for kind of going to this third step of the advanced centralization would be leveraging an in-house bank structure so you know that formal relationship between corporate Treasury and the business units where you can have a financial relationship and and and flows can go back and forth and then you know you keep up you keep accounting of that and then leveraging that in-house banks structure you know let's talk about payment on behalf of again you're taking the accounts away but really what you're getting is you're getting two you know centralized control and you're making all the payments for those pensioners and in an important point is that all that data that needs to go with that payment you know romanian remittance information or you know information about that visit unit to make sure that the supplier knows who's getting paid that will all flow through it okay and then giving the business units that single view of all the transactions that they need to see so the benefits to this you know as you move down the maturity scale it gets you know there's a little bit more work involved but there's also the benefits is really there's there's a can be much much greater and and really focusing in two areas again reduced FX and bank fees because if you're you know potentially making payments for your business units and closing those bank accounts or saving money but you're also you know probably getting better rates on your on your foreign currency for those cross-border payments and so we're you're reducing costs there and you know get can't overstate given the business units the data that they need reducing the risk right so less people across the organization making payments but also allowing central Treasury to have that visibility and control that they need that's fantastic you know that's inept something that everyone's looking for the greater control and really the ability to audit these kinds of processes right but also greater visibility into organizational payment activity reduce potential for error again reduce overall cost but you know this goes back to the point that we're making greater value to the business and I think that's critical so bill as we as we move on to page 9 we just went over you know all the the challenges the solutions and the benefits for the corporate Treasury function in terms of connectivity and centralization I guess my question is what what kinds of client feedback have you received as you supported clients in this transition and really a dis charity to greater connectivity and greater advanced controlled centralization Kevin one of the one of the absolute best parts of my job in working with corporate Treasury folks in helping them through this journey as you call it which that's a good name for it is you know after the project is complete and we kind of sit down take a breath and go okay you know let's let's look at the benefits that were achieved were they the same were they greater than what we originally planned and and here's a couple of a couple of quotes that have been shared with me by some of our customers so the first one here on slide 9 is a global advertising and media agency and you know they had gone down the journey and and as they implement the payment on behalf structure they were able to gain a full two days of working capital visibility by going through the to the to the povo structure and in this organization specifically Kevin they have about sixty billion dollars that flow through that organization on a yearly basis so I think we could all you know do that do the math there and look at the benefits on two full days of visibility another working capital in you know the reduction in the cost of funds and the value in that visibility the second one was by one of our financial services clients and and their challenge was that they just didn't have the IT folks that they used to right didn't have the resources and they felt that their cocked up image was probably a little higher than it should have been so they went through the they went through the centralization phase and they came back and told me you know that that reduce dependency on IT resources yeah that absolutely came into fruition and then our cost of payments went down and what's interesting is the external cost went down but their internal cost actually went down dramatically because you know there were less payments that were being returned all the payment that were going through the bank were flowing straight through so they were really happy you know one of the customers that is in an industry that acquires companies quite often right that's a unique challenge because now you're dealing with new bank accounts new bank relationships and you know they want it they want visibility into those accounts and possibly make payments through those accounts very quickly and prior to going through this journey it was taking months to do that and with the platform being agnostic to the bank agnostic to the network for the channel now they're able to bring in a new partner bank within weeks so that's you know that's a clear value to them and being able to go to management say hey we can get these banks up and running in weeks not months and then an interesting conversation I had kevin with with a treasurer recently that we've worked with you know he shared with me that you know he is now you know his goal is to support the business right while while reducing risk and increase visibility and and and control and now with a platform he's really able to do that confidently right he's able to give those visitors the data that they need at the right time right the right data at the right time in the right place while of course maintaining an increasing visibility and keeping that documented process so fantastic hey Bill thank you so much for that I'm going to put our mug shots up here once again you know before before I let you go I want to ask a few questions that we've received during our conversation here I'm reading through these here first and this is something I'm thinking about what types of organizations do you typically see taking on an initiative like this so Kevin as I think about the organizations that we've worked with because the approach is a phased approach right it's not a Big Bang approach it's not you have to do everything or nothing you know some of our organizations again have tackled a kind of the first connectivity phase and and may or may not move on to the other phases and but because it is faced I think fortunately any organization and I hope you know almost anybody that that's listening to us today could benefit from this from the space approach and again whether it be just an activity or or you want to go down the full path to payment on behalf of and you know delivering value to the business units so I think Kevin in my opinion almost anybody could benefit from it great great thank you I'm reading this the second question here I think the questioner is asking that there's a level of I guess technical maturity that a client needs before before they can take on this kind of initiative bill is there is there a level of technical maturity that client needs to meet before they can take on this kind of this kind of initiative well Kevin I in fact I don't think there is and we've worked with organizations that I guess you would consider very technically mature they have a lot of systems out there and they have you know standard ERPs across the organization and they have a lot of technology there and then we worked with organizations that don't have that right maybe don't have as many systems and I think what's interesting from my perspective is that whether you're more complex with a lot of different systems there's definite value than we've talked about that right there's definitely value you could get out in this journey because you've got all those data sources that you have to hook into but if you're less technically mature I think there's value there too because now you know this platform can can replace kind of those old legacy technology or or lack of of data sources out there and be your kind of single view into the world of of your cash flows payments collections and balances gotcha that's another question this actually is my question bill I I grew up in the RISC space so my question is you know what kind of concerns or risks to your clients face when when they're taking on this kind of initiative yeah Kevin I that's that's a very common question I get when we first sit down with a lot of organizations right is what do we need to worry about as we go down this journey and and really we share three kind of areas that need to be managed the first one is communication you know as a treasurer you need to communicate what you're trying to achieve early and often making sure that the business units understand and executive leadership understands what you're doing the second is proper change management so as you go through the journey making sure the changes are controlled that keep the project on track right because it would any project is a chance of getting off the rail so you know making sure there's proper change management in place and then the third would be getting the proper buy-in from both executive leadership and the business units right because if they they're stakeholders and if they have skin in the game then they're going to be rolling in the same direction of trying to achieve the same things that you guys are trying to achieve or corporate treasurers trying to achieve so really that buy-in is really key great so communication I hear you on communication right as well as the change management and I think we tell our clients regardless what the initiative is to get that mandate from on high to really drive a sustainable change across the organization so there's another question here and and this actually might be related to the first question what kind of time frame are your clients look typically looking at and let me let me adjust this question a little bit because I want to think about in two different ways what kind of time frame of your clients looking at in terms of a baseline connectivity and then be the timeframe to achieve what you would consider a mature organization to be in terms of advanced controlled centralization so Kevin I think that that answer is a little bit of it depends okay but I'll go ahead and answer kinda more in a general sense right so so the organization's that we've worked with in going down this journey for connectivity you know there's the the it depends part is based on you know third-party providers that you need to work with will that be banks or or other third-party providers that you know are required to get data from and descent data to but I as we sit down with organizations I tell them you know this should be in the kind of the one to two months timeframe right it shouldn't go any longer than that I mean you're talking about setting up connections and yeah there's some work there but I think the platform and the solution provider should be able to do that rather quickly in a couple of months the second part of your question pertains to you know going further down this maturity scale and tackling kind of the bigger challenges of centralization and again I'm going to say it depends because there's so many requirements from other business from business units and and there are some acquires from your IT right and the folks that own those systems although they are minimal you still have to get on their radar and and make time and make sure that you're a priority for them but I think what we've seen is kind of the range from six months to maybe a year for the folks that kind of tackled up the the entire approach so you know six months kind of at the shorter end when you're doing maybe what we would call the kind of basic centralization and then going into advanced centralization kind of payment on behalf of structure I think you know generally you're looking at up to year I mean again could take longer because of other you know dependencies and everything but I think as you look at this journey and as you at Treasury folks on a look in the mirror go are we ready for this do we want to go down this path and and and get this value you know I think that's kind of the timeframe generally that they could look at and of course I'd be happy to feel into more details if anyone had any further questions on that but I think that's generally did that answer the question Kevin sure yeah I think it did yeah and actually you know bill we do have some more questions but they look like they're going to be a little more client specific and I would ask that you address those directly with the questioners which we're recording all the questions again I want to remind everyone in a day or two all the attendees are going to receive a copy of the presentation and I'll link to the recording but Bill's also going to answer your questions directly that that we've received that are specific to your situation bill thank you so much and and really thank you to everyone on this call today for taking the time out of what I know is a busy day to to attend this conversation we thank you very much and and I hope you have a fantastic day thank you