So, Bayer Business Services is the “global The latter have developed from straight- lems of offshoring to an SSC. Many com- in-house competence centre for business forward geographical wage arbitrageurs panies find that after offshoring, solutions and business support processes to sophisticated creators of value-added headcount actually increases in the SSC of the Bayer Group.” In fiscal 2016, it through analytics and digitalisation. compared to the legacy process, some- employed 5,560 people worldwide in 12 They are positioning themselves as both times by amounts significant enough to sites and achieved service volume of a source of efficiency and of transforma- negate much of the original business more than €1 billion. tion. And their increased sophistication case. Using RPA to optimise the SSC has been driven by specialisation: BPO may reduce this problem. It may also Standard Chartered Global Business offerings can be horizontal across a pro- mean that firms have a complex trade-off Services employs 13,000 people, servic- cess type or function – HR, finance, pro- between the RPA-enhanced onshore ing most of the 70 countries where the curement and so on – or specific to a model and the RPA-enhanced SSC. Standard Chartered Group has a foot- particular industry sector. print. It handles activities including Either way, regardless of function – HR, finance and accounting services, soft- The traditional treasury response to the procurement, treasury, whatever – the ware development and maintenance, idea that it is being subsumed or redistrib- only things that will be left outside the and providing compliance services uted into these offshore units is that while process hub will be high-level, strategic around Basel, anti-money laundering the processes outlined above do naturally and value-added. In the case of treasury and know your customer. lend themselves to outsourcing, the treas- it’s hard to see why those functions ury back office is different. Yes, it executes would not be carried out by the CFO The most sophisticated companies can largely transactional processes, but they and their team. end up creating a four-layered struc- require real treasury expertise to act as an ture: the corporate centre; the ‘centre of effective control. So offshoring them to Treasury reborn excellence’ or GBS; functions embed- unskilled staff is risky because it creates ded in the business and, lastly, SSCs. distance between the remote back office, When EuroFinance first pointed out, On this model the true GBS operates as the front office and the group treasury. some years ago, the benefits of a single a true centre of excellence, which Whether or not this is true is impossible enterprise-wide ERP, several treasurers attracts highly qualified staff undertak- to prove one way or the other, but it seems wrote in to say that the idea was impossi- ing tasks which are far from purely to fly in the face of the technological ble and unnecessary. transactional. In this model the GBS advancements of the last few years. Geo- acts as a talent pool for the rest of the graphical distance is not what matters. The rapid pace of digitalisation has over- finance organisation. Disconnection is what matters. taken that criticism. Deloitte can now ask Rise of the robots companies, “Do you have a single ERP W(h)ither treasury? platform, enhanced with process specific The rise of robotic process automation enabling technologies, robotic process The question for treasury starts off complicates matters further. RPA is the automation and cognitive technology? being how well their companies can use of software ‘robots’ to automate Have you eliminated the need for man- migrate treasury processes into these administrative processes by replicating ual intervention in transaction process- centres. But increasingly, if that migra- the actions of human operators of com- ing so that your colleagues can focus tion goes well, it ends up being what of puter systems. This is a new form of auto- solely on analytics and other value creat- treasury is left outside the SSC or GBS? mation that does not require traditional ing activities?” Does the outsourced entity end up run- Application Programming Interfaces ning treasury – or does it even end up (APIs). The software robot is ‘trained’ to The elimination of manual processes and being treasury? At Vodafone, for exam- execute the actions of a human operator, the seamless integration of financial pro- ple, the GBS unit includes the procure- rather than programmed, and it is this cesses across a business globally are no to-pay cycle, the reporting cycle, cash form of automation that is forecast to longer pie-in-the-sky. Treasurers will management and management account- remove the need for many low-skilled complete all these treasury centralisation ing in its portfolio. And indeed a small data-entry and similar jobs. and integration projects. And what then? number of multinationals avoid the What when the whole cash cycle, all the complexities of the question by offshor- This could have one of two effects on in- ERP feeds and all the basic data analyt- ing the entire treasury function. The house departments and SSCs. On the ics are done by a GBS unit (or in the case question then becomes whether the one hand, any outsourcing whose pri- of smaller companies, Cloud suppliers of treasurer is then too far away from the mary purpose is the offshoring of low- various kinds)? CFO and senior management. But these skilled jobs may find themselves made At that point either treasury has disap- are rare exceptions. obsolete by technology, since RPA peared, or it has been moved into a At some point, since most treasury activ- removes the need for humans alto- global process unit that now already ities are back-office processes in transi- gether. On this view, on-shore depart- claims to be less back-office resource tion from disconnected and/or manual ments become more efficient without and more strategic partner and value- to connected and digital, doesn’t treas- the need to outsource and companies creator in the business. Sound familiar? ury simply get broken up into a series of should conduct an evaluation of process Indeed, PwC, in its 2017 Global Treas- automated templates and data-deliver- optimisation, including considering the ury Benchmark Survey 2017, titled ies, and outsourced to the SSC/GBS? benefits of RPA. That evaluation may ‘The ‘virtual reality’ of treasury’, And if only highly-skilled, value-added increasingly prove that offshoring is expresses the view that treasury should activities are to remain with the business, unnecessary. be viewed not as a department but as an what is the difference between 100% On the other hand, perhaps SSCs them- enterprise-wide process. In some GBS owned SSC/GBS subsidiaries and true selves will adopt RPA technology, mak- models, each function or process like outsourcing to a BPO provider? (See ing the case for outsourcing to them even this has an ‘owner’. Perhaps the owners page 38 for more on the future of the job more compelling. In this scenario, RPA of the finance function could be called of treasury.) may also solve one of the perennial prob- Treasurer. Just a thought. www.eurofinance.com TREASURY PERSPECTIVES 2017/2018 // 37