BIG DATA, in treasury

Today, there is a big data problem in treasury, too. We have to handle a large quantity of data coming to us from a whole host of sources and systems, often in bulk, without it necessarily being standardised, formatted, usable or consolidated. It is not a matter of producing data but rather of identifying it, of extracting it and importing it into tools specially designed to handle this reformatted data, to aggregate it and to consolidate it so that it can be used to produce a simple and easily understood dashboard. This dashboard would be made up of various key financial indicators, summaries, and financial and risk level reports, along with analyses and recommendations deriving from them. Ideally, we would like to be able to extract all this under-utilised data in one single tool to carry out reconciliations, internal controls and checks, and to produce IFRS disclosures and other reports in a more automated or fully automated manner (as far as possible). From this amalgam of disparate data, we dream of extracting its very essence. From this coordinated and amalgamated data, we could produce appropriate analyses to assess the situation, to evaluate (any) residual risks, and finally to produce recommendations to enable Board of Directors, Audit Committees or CFO’s to decide on and approve the measures to be taken. The treasurer's role is to do things, to display and demonstrate what he has done and from that, in aggregated and simplified format, to make recommendations on what to do next. We are talking about “Business Intelligence” (i.e. BI). I would speak more specifically of dashboarding, more simply and more unpretentiously. It is not enough to do the work of a treasurer, you also need to be able to demonstrate it and maximise the potential of management tools to help make the right decisions. IT applications and solutions, because they are so diverse and numerous, and because of the quantity of data produced, do not allow everything to be processed in one single wrapper. Transformation into one single language, into a common format and into an automated process will allow you to produce an aggregate consolidated position report, which can then be analysed.

This data synthesis and the analyses deriving from it are a crucial challenge. They enable you to make better decisions. Cash is king, as everyone keeps saying. Treasurers always need to do more, without increasing their staff or their costs. The challenge is all the trickier in a difficult and downbeat economic environment. When finances are tight, we need to take even smarter decisions, and therefore produce reports that help with quick and good decision-making. We're not even talking about compliance reports, which also have to be extracted, because nothing comes in "ready to go" form. The problem is not accessing the information, but rather doing something with it. It is a pity to have a racing car and not be able to use its potential speed because you can't control it. It is a matter of shifting up a gear on the vehicle. We can no longer content ourselves with being retrospective, we also need to be forward-looking and to spot risks through appropriate reports and indicators. We need to give ourselves a competitive advantage over our peers and competitors.

Thankfully, there are toolkits available on the market (e.g. Finmetrics, Intix, etc..). We need to put them in place and put together the IKEA cupboard. Nothing can be done in isolation and no "all in one" solution exists, unfortunately. Between the platforms, the software applications, the tools and web apps, treasurers should find what they are looking for. Technically, it is not easy; it is, however, feasible. In terms of resources, it is tricky, but doable. No one would dare to suggest that dashboards of this type were not vital. However, plenty of people admit on the quiet that they don't have the time or resources to build them.

In my view, this is the biggest challenge that treasurers currently face, their major target (or what ought to be their major target), the prerequisite for the necessary increase in productivity. Because, to do more with limited resources that cannot be expanded, everything that can be automated needs to be automated to free up time. Time, the resource that none of us have enough of. The treasurer's task – something between an ordeal, resolving a dilemma and squaring the circle – consists of investing the time and money (of which we are woefully short) in IT resources, to automate the consolidation of such data as can be consolidated to free up the time needed to analyse that data and derive from it the most appropriate conclusions possible. I think that this is at the top of the treasurer's list of priorities. Treasury management is still an art, for which the universal panacea and the all-in-one tool that does everything still does not exist, unfortunately. To reach best-in-class level, we need to equip ourselves with this type of toolkit, regardless of the effort or difficulty. We need to find the “Esperanto” tool which will deliver the analysis that the CFO wants in real-time or on demand. This is our mission and our duty. Let us never forget it!

François Masquelier, Chairman of ATEL