Cash Management

Internet Will Have Big Impact on Treasury, Say Finance Execs

Despite dot-com debacle, survey reveals corporates keen on conducting cash management and forex over the Net.
Stephen TaubOctober 19, 2001

Despite the collapse of scores of Internet companies, 70 percent of CFOs, controllers, and money managers say their companies’ commitment to B2B E-commerce is as strong today as it was a year ago. This, according to a survey from the Association for Financial Professionals (AFP), J.P. Morgan Treasury Services, and Ernst & Young.

More than 80 percent of the respondents think the Internet will ultimately have a major impact on payments, collections, and investments, while 70 percent expect a major impact on borrowing and foreign exchange practices. (For more on how virtual foreign exchange may revolutionize cash management, see “Online Forex: Promises, Promises.”)

“The survey’s participants do not believe their organizations’ commitment to the Internet has lessened with the widely publicized fall of many dot-coms. Very few respondents believed that their companies’ pursuit of Web-based activities has lessened in the past year,” according to the survey’s executive summary.

On the other hand, less than one-third of the survey’s respondents feel that E-commerce and the Internet had an “extremely” or “very important” impact on their treasury in the past 12 months. However, they list improved workflow efficiencies, including more “real time” information, sharing access to data, and working from multiple locations, as the most significant impact of the Net on their corporate treasury operations.

More than two-thirds of the respondents expect the Internet will play a key role in accomplishing their goal of centralizing all corporate treasury functions by 2003.

Other key findings of the survey:

  • More than three-quarters of respondents cite “access to more real- time or updated information” as the Internet benefit that has had the biggest impact on treasury.
  • Seventy percent of respondents believe that the Internet makes data integration easier for treasury. Smaller majorities also believe the Internet is saving treasury money and that major financial service providers have taken care of security issues.
  • Treasury departments are currently more likely to have a role in decisions relating to presenting and receiving invoices than those relating to purchasing or selling via an E-marketplace.

“We have been monitoring Internet usage by financial professionals for three years and while some adaptation has taken longer than originally predicted, we firmly believe that Internet strategies will advance the field and the role of the corporate financial professional within the organization,” said Jim Kaitz, AFP’s president and CEO, in the survey press release.

The survey included 1,000 professionals representing a broad range of industry segments. More than half have worked in the treasury profession for 10 or more years. About one-fifth were senior-level practitioners with titles including treasurer, controller, and CFO or president, while just slightly over half were middle-level practitioners.

You can read the complete survey results “The Internet’s Impact on Treasury” on the AFP Web site (Adobe Acrobat Reader required).