Treasury Operating Model Review

Treasury Operating Model Review Useful Secrets

In leading treasury operating model reviews, we often get asked how we go about the initial phase of the review. The goal is to make sense of how a treasury operates now, looking at systems, structures, and people. What we look for are risks, whether from existing suppliers or systems, and what impact they might have.

In the early stages of a review, we interview a wide range of key people from which we gather an understanding of their current operating model with a standard set of questions. We want to understand many things including their:

  • organisational structure, accountability, service model
  • systems, cloud architecture and data capabilities
  • investment portfolio / products / public / private / regions / volumes and digital assets
  • supply chain internally and externally
  • supplier operating documents and contracts
  • governance model and existing roadmaps
  • company vision/mission statement
  • current 90/180/360-day commitments
  • budgets
  • interdependencies between systems and people internal and external

All this takes at least a month, out of which we create a separate service capability catalogue which we then review and replay with the key stakeholders. We validate the accuracy and scope of the early analysis and gaps are then put back into the review process to complete the catalogue.

Whilst this goes on, we listen to staff on their successes, challenges, and risks. Our aim is to find the strengths in the operating model, but also overlay this model with a weighted set of risks. For instance, any risk has a probability of occurring, and a scale of impact. A risk that is very likely to occur and has a big impact is something we will focus our attention on early.

Our risk catalogue captures all the risks both great and small and uses the probability and impact scores to weight and rank them. These then become another review point with our clients to validate each risk and scoring.

Once we have the risk catalogue, we link these back to the organisation and service structure to ensure accountability. We then start considering the opportunities these present for remedies whether big or small. We frame problem statements around technology, data, capabilities, and people which then link to the service capability catalogue. Yes, we use tech and AI to help facilitate charts and data taxonomy and other factors.

But our people, treasury and operating model knowhow is crucial at this stage.

We pride ourselves in conducting the treasury operating model review by people with long experience in the markets, with front to back treasury experience. You can’t build an accurate picture of a business without having seen first-hand how things work in the real world. We are independent of any system or service provider, meaning we have our own authentic history of knowledge and technology insights (Segue) on how providers perform and what to look for during a treasury operating review, traversing buy and sell side.

Reimagining the treasury operating model is the next phase of the process, 1) assessing capabilities of alternative systems and service solutions, and 2) providing optimizing current model for greater agility, depth, and cost.

We’re often faced with a deluge of ‘moans’ when you carry out a review, we distil and prioritize them into a defined set of business risks ’ to sift the major from the minor. The conversations can get quite challenging sometimes, our framework helps guide the process and keep it linked to the core stakeholder’s priorities.

We hope to avoid conflict during a review, but once you start lifting rocks, all sorts of things can creep out! We hope this helps give a flavour of what a treasury operating model review looks like.

Photo by Chase Clark on Unsplash