Have you ever calculated how much money your company loses when you push back a development project?
Let me guess: the standard answer is something along the lines of having so many important development projects and only enough resources to undertake some of the projects. Does this sound familiar?
I actually use the exact same line when I cannot come up with any reasonable counter-argument to a salesperson who tries to sell some perfectly reasonable thing to me. But let me repeat the actual question:
Do you know how much money the postponement of a project costs your company? If you haven’t calculated that, how do you actually prioritize your projects?
Even though treasury is a support function, it is still definitely part of the business. And in a business, all initiatives should be guided by their bottom line impact — no matter what the so-called company values statement says. Consequently, the treasury needs to calculate the value of every initiative and prioritize them on that basis.
During the past several years, I have come across many a company where cash forecasting is one of the most important development projects. Nevertheless, the project is postponed year after year, as some “more important” project demands the full attention of the treasury. Typically these “more important” projects are wide-ranging cash management overhauls, that are used as a pretext to RFP/I/Q indistinguishable cash pools or something similar. A usual trait for these projects is that the effort spent vs. the monetary benefit is not even in the same league as in a cash forecasting development project.