The Future of Corporate Treasury

12 Treasury and Trade Solutions Future Landscape — Tomorrow and Beyond The future is in the cloud. Technology applications keep advancing at a stronger pace, changing the way businesses are run. The emergence of new technologies is bringing the treasury profession to the next maturity level of a Smart Treasury, which is benefiting from data analytics, algorithms, and self-improving processes. Figure 6: How cloud hosting implantation takes place Cloud Solutions SaaS Real-time Payments Enterprise Blockchain Independence from local IT resources Transfers settled in real time Transparency of execution status and charges paid 2 Further reading on this topic can be found via https://www.itworld.com/article/3264435/cloud-computing/sap-settles-licensing-dispute-with-ab-inbev.html One of the main developments with which can be observed with regards to hosting, is the shift from on-premise to cloud-hosted solutions. According to Cisco’s Global Cloud Index, Software-as-a-service (SaaS) will become the most popular and adopted services model for public and private clouds by the end of 2019. Cloud-based solutions have less entry- level barriers and are flexible, scalable solutions, which can adjust toward the needs of a corporate, depending on its size, treasury complexity and functional requirements. As mentioned earlier, this cloud development is changing the traditional location-based concept of centralization toward a concept of virtualization. While previously treasury teams and the software servers were put in the same location, local or regional treasury teams are now working together globally despite being in different regions and time zones. Cloud-based solutions will be priced differently. This migration toward cloud-based platforms is also driving technology vendors to reevaluate their pricing models. Traditional pricing was based on which treasury software or modules a corporate would buy, which would result in a one-off investment and a periodic cost of maintenance and upgrading (“license and maintenance model”). Cloud-based solutions will be priced differently, in most cases subscription- based dependent on the usage of certain transactions, functionality, modules or data (“usage model”). With this change in pricing models, there are already examples of disputes between large ERP technology vendors and their clients, which is about a potential breach of the software license agreement by directly and indirectly accessing the core system and data without appropriate licenses. 2 This typically involves the interfacing of a core ERP system with third-party cloud-based applications or add-ons, where, in the opinion of the technology vendor, an increased volume of data usage should result in a higher pricing of the solution to the client. For this reason, some large corporates are already considering implementing a diversification strategy to work with various technology vendors to prevent a “lock-in effect.” The future will most likely not only be in the cloud. As a kind of contradiction to our earlier statement, the future state will most likely not be a “cloud-only” one but rather a hybrid combination of on-premise installations at a central location with a continuous link to a cloud-based solution, similar to cloud storage solutions such as Google Drive, Dropbox and OneDrive today. This will allow corporate treasuries to benefit from working locally and to continue working in the cloud remotely in function of where and how they are working with the same user experience.