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  • CFO Europe Magazine

The Gloves Are Off

Software vendors battle to win over treasurers.

A few years ago, when the treasury team at Deutsche Post World Net (DPWN), a €60.5 billion Bonn-based post and logistics firm, decided to start using their ERP system for in-house banking and payments, not many other treasurers would have wanted to follow in their footsteps. While SAP, Oracle and the other big ERP vendors had some treasury modules on offer, these paled in comparison with what treasurers could get from treasury management system (TMS) vendors. What’s more, most treasurers bristled at the thought of having to give up their specialist software in order to use relatively minor modules within the bigger ERP systems being managed by group IT.

But Daniel Robrechts, group treasurer of DPWN, says the business case to make the switch was strong. Since its IPO in 2000, DPWN had bold plans for growth, primarily via acquisitions. These included the takeover of DHL, which gave DPWN, among other things, an entrée into the US’s huge express-delivery market. It also meant that the volume activity in treasury exploded, and created a need for central treasury to be more integrated into the group’s growing global network of companies. “The platform [from SAP] enables us to manage the liquidity and cash for as many as 600 different companies, and we estimate that [the ERP] solution saves us €40m per year,” he reports. “The payback is definitely there.”

Since “the six-figure investment” to make the treasury-software transition, DPWN’s ERP system has expanded its reach to include internal hedging activities, and now Robrecht’s team is considering transferring risk management activities from the TMS to the ERP as well.

To many treasurers, DPWN’s treasury switch may no longer seem as daring as it once did. In a global survey this summer of treasury professionals by Eurofinance, a sister company of CFO Europe, nearly 25% of the 150 ERP-using respondents said they have implemented the treasury modules of those systems. A further 29% said they were considering doing so. Meanwhile, 20% of the 150 TMS users in the survey said they are also looking into the treasury modules of the ERP systems.

Power Sharing

One reason for the increasing interest in ERP is that the software vendors — notably SAP — have greatly improved their treasury technology in recent years. Another is that an ERP system, rather than a standalone TMS, can help move the treasury function closer to information that resides in other parts of the company. Such a switch can also help resource-strapped treasurers, who can piggy-back on existing ERP support provided by the IT department.

Beyond those reasons, however, there’s a tough fact of life for a growing number of treasurers: they might not have any choice in the matter. “If companies have a centralised IT strategy, it is very hard to argue against putting in a treasury module of an ERP. It will cover 95%-plus of a TMS,” claims Damien McMahon, Brussels-based director of finance and treasury solutions at PricewaterhouseCoopers.

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