Technology considerations to provide operational resilience

Economic crises pose a real threat to organizations, the systems they rely upon and the people they serve, regardless of whether they are caused by natural disasters, political turmoil, or the changing economic climate. While there are many preventative measures to deploy, including well-known disaster recovery and crisis scenario-planning methods, it is important to understand that technology, next to being at risk, can also help to mitigate the risks, accelerate change, and expand access to critical systems and resources.

What has become more prevalent compared to past disrupting events is that working from home has become the ‘new normal’. Although this working model is likely to continue to feature to some extent in the future, it adds additional complexity to daily business operations as organizations try to understand and mitigate the potential technology risks it introduces. These risks include key technology elements such as infrastructure, devices, communications, and security.

A considerable amount of preparation and planning is required to ensure operational resilience in terms of treasury technology. With this in mind, we will now discuss some key technology considerations to help you to understand the options at your disposal.

Support Model

Does your treasury function have a robust support model in place to ensure key activities and operations do not suffer in the case of an unforeseen event?

Ensure there are functional and technical experts in place to provide support for critical business processes and systems functionality, with agreed SLA’s guaranteeing quick and dynamic response times.

Consider a flexible resourcing model, that is agile enough to allow seamless scalability to changing business needs and have sufficient back-up resources in place. Another thing to consider is a recurring (monthly), service-based pricing model, which offers a more predictable cost.

Treasury Technology Support in practice: Inmarsat

Christopher Killick, ERP Functional Consultant at Inmarsat, has offered us a testimonial for our Treasury Technology Support services:

“In the autumn of 2019, Inmarsat was preparing for takeover by private equity. At the same time, our specialized treasury resources were stretched. Fortunately, Zanders stepped in to ensure that the myriad of complex changes required were in place on time.

  • Make a number of general configuration improvements to our treasury management and in-house cash setup.
  • Educate us on deal management and business partner maintenance.
  • Update and vastly improve our Treasury Management User Guide.
  • Run a series of educational and analytical workshops.
  • Map out several future improvements that would be of great benefit to Inmarsat – some of which have now been implemented.

·Without this support it is likely that Inmarsat would no longer be using SAP TRM. Inmarsat’s relationship with Zanders has continued through a Treasury Technology Support Contract that is administered with the utmost professionalism and care. In the past six months or so, a large number of changes have been implemented. Most of these have been highly complex requiring real expertise. On top of that, a number of production issues have been resolved effectively, as we realise the real benefit that Zanders Treasury Technology Support delivers.”

Infrastructure

How scalable is your IT infrastructure and does it have the physical capacity to enable a fully remote workforce at short notice?

In most cases, your organization’s technological landscape (on-premises vs. hosted vs. cloud) will define the recovery strategy. However, does it consider the possible requirement to upgrade your network infrastructure to support increased cloud and mobile usage, to support home-based working? Perhaps now is the time to evaluate and leverage virtual environments to accelerate device deployment.

Disaster Recovery

The old age saying that ‘time is money’ has never been more relevant in this context. Are you in a position to provide continuous and effective operations during a crisis, that will minimize the financial impact to your organization in the event of a disaster?

During the current crisis, we have witnessed companies scrambling to invoke their Business Continuity or Disaster Recovery plans. In the past, this would involve making sure data has been backed up and restored or replicated, firewall rules updated, user accounts migrated and users being able to switch over to backup servers. In reality, this is a stressful and time-consuming activity.

Currently, for those companies where most of their core infrastructure and hardware is hosted and data is stored in the cloud, a less complex strategy is in place and there is a good possibility that there will be a reduction in downtime, thus minimizing business impact.

Key Person Risk

Is your business or business unit heavily reliant on a key individual(s)?

Our advice is to provide for the short-term while developing new capabilities and ways of working that will last. One of the best ways to prepare for any future challenge is to develop a flexible ‘digital workforce' - an expandable workplace environment that allows you to rapidly scale, deploy and adapt to changing business needs.

Your subject matter experts will have the deep domain knowledge required to work in treasury (compared to other transactional finance activities) and the possibility of losing them could jeopardize internal controls and Segregation of Duties.

Be aware of your key-person-dependency risk and introduce measures to help address this by maximizing team collaboration through cross-training, documentation and continuous review of key activities and succession planning.

Training and Skillsets

Does your team have the specialized skill sets and expertise to continue to operate as normal with a reduced workforce?

Running multiple specialist software programs increases training requirements, however a lack of training leads to individuals using software platforms without sufficient knowledge and establishes an environment prone to error.

Specific training programs can encompass instruction on both up- and downstream processes, establishing an environment that encourages collaboration between departments.

Vendor Risk

Do your providers of key treasury platforms (e.g. treasury management systems) have the capacity to support you remotely, as well as provide the appropriate safeguards to manage information security risks?

A key part of business continuity planning is evaluating your vendors’ ability to meet contractual obligations during a crisis - whether you have outsourced software, technology, or professional services, it is important to take responsibility for checking the security, reliability and business resilience of the vendors you depend on.

Systems Controls and Audit

Are there appropriate procedures and system controls in place to meet compliance of your operations during times of crisis?

Identify your critical activities and processes to manage your day-to-day business obligations, such as daily cash positions, settlements and headroom covenants reporting.

Consider latest financial market trends & legislation changes such as the IBOR Reform and the OECD guidance on Transfer Pricing.

Finally, secure remote connections to ensure data security and create awareness around malicious activities. Leverage exception-based processing and automate endpoint messaging delivery and responses.

Data Quality

Do you have confidence to make business critical decisions based on the quality and timely delivery of your data?

Having access to an accurate, consolidated representation of business data should be a top priority for any corporate. Key data quality dimensions include accuracy, completeness, consistency, timeliness, validity and uniqueness.

Final thoughts

Being prepared has proven crucial for keeping organizations and employees safe, effectively providing operational resilience in times of crisis. As more companies have been forced to adapt to the ‘new normal’ of working from home, many are realizing the importance of a digital strategy, even in ordinary circumstances. By default, the workforce is becoming increasingly remote. However, it appears many organizations have been slow to adapt their operating policies to reflect these growing trends.

At Zanders, we continue to evolve our preparations for times of crisis. We have made sure our employees are connected and have ensured our own core business process are protected by adoption of our own operational resilience policies.

Contact

Want to know more about how technology can help to mitigate financial and operational treasury risks? Then contact Warren Epstein on +44 20 3997 3449 or visit our Treasury Technology Support page.

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