Choosing a treasury management system (TMS) goes beyond looking at product functions and features. Given the significant investment that goes into selecting and implementing a TMS, the software should support an organization’s needs for at least several years. But without the right partner to help maintain and optimize the system, even the most advanced technology can become a liability.

Below are three considerations to keep in mind when evaluating a TMS provider during the selection process.

1. Long-Term Viability

The organization should be able to trust that the TMS provider will be a reliable presence for the duration of their contract. Because critical data for decision-making is being entrusted to a third-party, it’s imperative to vet the TMS provider for stability and counterparty risk.

Particularly in times of volatility, a vendor experiencing financial uncertainty presents a danger of service disruption. One way to assess a vendor’s financial stability is to analyze its financial statements for any red flags regarding the company’s financial health.

Analyst reports and customer reviews can illustrate the vendor’s track record and serve as an indicator of its future performance. Vendors with expertise in an organization’s specific industry will likely have a better understanding of its unique requirements and challenges.

Client reference calls are a valuable step in the evaluation process because they can reveal specific insights about the vendor’s sales process, implementation experience and ongoing customer support. To gather the most relevant information, it’s important to request references from organizations that are similar in size and/or industry.

Beyond references provided by the vendor, seeking out treasury professionals who have experience with the TMS provider is a great way to get candid feedback. As Jeff Diorio, Managing Director at PMC Treasury, previously told AFP, “Talk to your peers because your peers will absolutely tell you what worked and what didn't work.”

Many AFP members turn to AFP Collaborate to ask questions about treasury practitioners’ real experiences with TMS vendors. Others expand their network through industry events like the annual AFP Conference.

2. Product Roadmap

Related to long-term viability is future-proofing — ensuring a TMS remains effective in the years to come. A TMS that does not receive regular enhancements will become obsolete over time, so it’s critical to check that the TMS provider has a clear roadmap and demonstrates a commitment to innovation.

When considering a new vendor, ask for its product roadmap for the next one to three years. A vendor’s product roadmap should go beyond a list of upcoming features to reflect strategic foresight into how emerging technologies will impact client needs. Ask not just about the features the vendor is building, but also why they are being built to understand the company’s strategic perspective.

Additionally, the vendor’s level of investment in research and development (R&D) is an important consideration, as it is an indicator of how quickly new functionalities can be developed in response to evolving client needs or market conditions.

Many TMS vendors are incorporating artificial intelligence (AI) and machine learning (ML) technology into their offerings. The success of an AI or ML application depends on the quality, availability and timeliness of the underlying data. As such, a vendor with a robust connectivity architecture is better positioned for long-term success with AI and ML than one running on a legacy architecture.

Application programming interfaces (APIs) are foundational to connecting disparate systems, such as the TMS, enterprise resource planning (ERP) system, banking platforms and fintech solutions. This makes the comprehensiveness, reliability and security of a vendor’s API offerings critical to a TMS’s ability to seamlessly communicate with other systems in real-time and unlock the potential of AI and ML tools.

3. Human Element

The human element, i.e., the way a vendor interacts with its client, although difficult to quantify as a score, is a critical predictor of a successful partnership. A key factor to consider is the vendor’s implementation methodology and team. The vendor should have a well-structured implementation process that has been proven across other projects. Be sure to ask about the expertise of the individuals who would be assigned to an implementation, as those with experience in a particular sector may bring specialized insights to the process.

The need for support doesn’t end once the implementation is complete. The vendor should have a model for providing specialized, responsive support. Ask about what the service level agreements (SLAs) are for response and resolution times, and whether the support would be provided by generalists or experts with treasury knowledge. Organizations with global operations will want to inquire if support is available 24/7.

Finally, organizations should assess cultural fit, as strong working relationships are built on trust and mutual respect. A vendor that is responsive, easy to work with and aligned with the organization on its objectives is more likely to be a strong long-term partner.

Preparing to start the request for proposal (RFP) process for a new TMS? Download AFP's TMS RFP template to help you select the most pertinent questions to ask.

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