A continuous theme when talking to treasuries throughout the world is that there is a genuine lack of trust in their data related to foreign exchange, and any tools that simply measure their existing data areas of no use or help.
This has been a common theme that I have known and studied almost since the Smithonian Agreement of the mid 1970s.What I find interesting is that I have never heard it with more frequency than in the past couple of years.Why is that?
I have a couple of not mutually exclusive theories but look forward to hearing your thoughts.
The core of the problem is that the world is becoming – as Thomas Friedman points out – flat and the management of corporations are looking for their ERPs to solve the problem that they were told the ERPs could solve.Better data!?!?We all know that ERPs have not really delivered on that promise and as such the ERPs are simply presenting and organizing existing data reflected in one or more systems.
The analysts are not comfortable with the data as the systems were not built for analytics but for organization of data.As foreign exchange is getting to be a larger and more exponential problem the tools provided by companies such as Oracle, SAP, Sungard, Hyperion and other treasury systems have simply been providing the service of combining and measuring existing data. So treasuries are still having to resort back to spreadsheets.The issue with the spreadsheets are that they were never intended for what at the end of the day is risk management and as PwC has pointed out 95% of all spreadsheets in use to solve for financial answers have 5% plus errors to the bottom line.
Treasuries are looking for the magic that really does not exist.Make my data better!There is no easy fix. The fix comes with tools that provide clear and intuitive analytic capabilities that make it easy to look at the existing data and highlight inconsistencies and errors and then take actions.The only way that I am aware of to fix the garbage in garbage out problem is to have tools that facilitate data checks and eventually commence more rigid processes that change the environment and as such raise the bar for the people providing the data in the first place.
What tools have you seen out there that allow for good and clear analytics to solve these financial problems in any area of treasury, finance, accounting and tax?
