STEP 5 - IDENTIFY TREASURY MANAGEMENT SYSTEM VENDORS

Step 5- Identify Treasury Management System Vendors

At last count there were over 40 Treasury Management System vendors.  The vendor choice is critical as they will be a crucial business partner going forward. The choice of vendors is as important as the choice of Treasury Management System. Questions like corporate strategy, office locations, plans to expand, market preference, and system architecture are important.  One of the most critical questions to ascertain is the financial stability of the vendor.  What happens if the vendor merges or goes bankrupt?  Will there be support for your new system?  Below are some key factors to look for in identifying a vendor:

           

1-     System Features – Obviously the vendor must provide you with the features you require.  You  will find that there is a wide variety of functionality offered.  Here is where you must look into the future.  You must select a vendor who can meet your needs now as well as anticipate your future functional requirements. 

2-     Years in Service - The number of years in production is generally a good indicator of how well the system is performing and how stable it is.  You do not want to be the beta tester.  

3-     Number of Clients – In addition to a long history, a large client base is generally an indication that the vendor has matured past all the growing pains that come with a new product or service.

4-     SAS 70 – SAS 70 is an internationally recognized auditing standard developed by the American Institute of Certified Public Accountants on service organizations.  This standard represents that a service organization has been through an in-depth audit of its control activities, which generally include controls over information technology and related processes.  Without this recognition you should be wary of the vendor and dig deeper.

5-     Hosting Center – It is critical to understand the availability, security, and location of the hosting center.  Is the vendor's Hosting Center outside its local office’s computer room?  This may be cheaper but also negates the vendor's capacity to obtain the SAS 70 compliance recognition.  Does the Hosting Center have power backup, automatic fail over?  Is it highly controlled?  Is there a disaster recovery plan?  These are questions that need to be understood before a selection is made.

6-     Service Level Agreements – When reviewing a vendor you must understand system up time, data security, issue resolution procedures, the frequency of upgrades, and the hour that support is offered.  It is important to remember that your SOX compliance could be jeopardized by the vendor’s low level of service.

7-     Technical Support – The vendor must provide enough people to ensure all functional and technical needs are managed.  This is even more critical should you choose an ASP (application service provider) as you are dependent on the vendor.

8-     Pricing – Vendors offer a range of pricing and services.  Typically there is a combination of system maintenance fees, monthly maintenance fees, per user fees, flat fees, licensing fees and/or contractual pricing.  Make sure to understand what is best for your company.  Negotiate everything.