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Over the past decades, banks significantly increased their efforts to implement adequate frameworks for managing interest rate risk in the banking book (IRRBB). These efforts typically focus
Find out moreHow should corporate treasury business stakeholders and project owners deal with the transitions of SAP Treasury as their treasury management system (TMS) and its surrounding treasury interfaces and solutions?
Over the past 14 years, my colleagues and I have dealt with five types of SAP Treasury transitions:
Any type of transition has its own specific focus points during the project’s design phase. Almost every project’s primary goal is to enhance the TMS functionality; improve the user experience using a better level of business process automation and improve the security level of TMS.
Often Corporate Treasury requires support and expertise in designing the future business process and how the SAP Treasury system and architecture can meet business needs. One of the biggest challenges here is to find a trade-off between the different business requirements and the standard capabilities of SAP and its interfaces.
One of the main drivers of the custom requirements is hidden in the existing user experience. The end users/stakeholders got used to the old TMS functionality and behaviour, which is not the same in the new SAP system.
An experienced and independent consultant would first recommend leveraging the TMS standard functionality and proposing solutions to meet the business requirements with minimum custom functionality. In this case, the consultants often run TMS DEMO sessions in the new SAP Treasury; pre-configure the TMS and provide proof-of–concept solutions to provide evidence of certain complex functionality that can be aligned with standards.
There are six reasons why we think the standard functionality is so important:
Nevertheless, it is quite hard to drop custom bespoke solutions; sometimes it must be applied in the design and implemented for the clients.
There are some reasons to implement custom solutions in a treasury system’s architecture:
If a custom solution is inevitable, we have a couple of best practices.
Firstly, avoid the hardcoding of multiple conditions in the ABAP code. Instead, move the maintenance of the conditions to either custom or standard tables which can be supported by functional SAP support personnel or even by business users. Once a minor change in the conditions is needed there will be no need for a developer.
Secondly, leverage the use of SAP functional modules, programs, BAPIs and BADI etc. This makes the custom code more stable and leaves it less exposed to regression risks during the next system upgrade.
Also, avoid replacing significant pieces of the standard functionality with custom-developed ones which do not bring significant improvements. Supporting such SAP TMS becomes complex and expensive.
We recommend that you minimize the volume of the custom solutions during TMS systems implementation. A good balance should be found between business requirements versus SAP standard functionality.
SAP continuously improves its solutions in response to customer feedback, changes in financial standards, regulatory requirements, technology trends, etc. Therefore, it is important to conduct the TMS audit from time to time to see if old and custom functionality can be scrapped since there is standard functionality already available.
If you need an audit of your treasury systems, have challenges with custom solutions or need help with the system design, please feel free to approach us. We have extensive experience in enhancing treasury technology and improving treasury functions.
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