Innovation of Treasury Systems

Why don’t treasury systems vendors knock it out of the park with innovation?

Twenty years ago, Asea Brown Boveri (ABB) was formed by a merger between ASEA of Sweden and Brown, Boveri & Cie of Switzerland, forming a  global multinational operating in robotics, power and automation technology areas.  In order to support the global corporation, ABB formed a treasury organisation with a large number of treasury centers across the world, focusing on providing corporate treasury services to the company´s business units and subsidiaries.

The new organisation was set up as an internal bank in a truly innovative way. A new cash flow based corporate treasury system was developed by the vendor Trema (currently Wall Street Systems) to support the treasury organisation with systems. The leap in functionality of this system was disruptive to existing competitors.  Therein lies the rub, benchmarking against your peers does not knock it out of the park.  You would have to go back a further 15 years to remember Swallow Business Systems and the MicroTreasurer product that was launched on treasurers in the early 80’s.  That was  an innovative product that took the treasury market by storm and set the system standard.

If you were to review the last ten years to look for new innovation at vendors of corporate treasury systems, I think you could conclude that there has been some significant innovation.

Could you argue that any of the corporate treasury software vendors have hit it out of the park consistently, I would have to say no. Do not get me wrong, there has definitely been innovation, but it does not impact the market the way Apple has done with iTunes, IPhone and IPad. Apple is not the only one, Dell, Facebook and Linkedin are other examples.

Innovation at Dell on delivery: Dells mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve.  So they stopped selling in retail stores and sold online, but the interesting part is the innovation of building your own dell computer, making it personal to every customer, what an experience.  So much better than sitting next to competitive products at discount prices turning the computers into commodities and only competing on price.  You can immediately see the alignment of the business strategy and the innovation strategy working together for the company.

Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings. This mission statement has clearly worked with the employees at Apple as there is no doubt that they build innovative offerings to the market.

So what innovation has taken place in the treasury vendor space over the last 10 years that would knock it out of the park?  I can’t name them all but two that stand out to me that add value, but lack the final touch are:

1. The migration form perpetual license to a subscription model.[1]

2. The migration from installed based to cloud based delivery.[2]

To complete the innovation beyond the vendor company to the customer would be to create innovation on implementation and usability to the same extent that Apple, Dell, Facebook or Linkedin have done to become truly innovative and to hit the ball right out of the park.

Does anyone think that systems vendors do enough innovation?  Is there room for improvement or are they good to go?  Ask yourself this question, if Apple where to build a treasury system, would it look and feel like any product today?  Would love to hear back.

[1] From a customer perspective the shared risk of delivery outweighs the long term cost of the software as the higher dollar settlements post live date enables the customer to influence the development of the product. From the vendor perspective a long term predictable revenue stream means they can match their cost base to deliver more and better product as well as increase the value of the company.

[2] The customers reduce the total cost of ownership with a cloud based model where no upgrade and maintenance costs are incurred, while the additional security risk can be mitigated with strong security and admin tools.