BLOG
Insight to All Things Currency and Treasury Management

As currency volatility continues to intensify in early 2015 multinational corporations from around the world are looking for help to better understand and manage their currency risk. These multinational corporations come from a broad range of industries and all sizes of annual revenue. Regardless of their industry SIC Code or if their annual revenues are $500,000,000 or $50,000,000,000 from time to time we talk to treasurers who are in the process of building their own system (spreadsheet based, Access database or greater programming requirements) or some who have already tried tackling their FX problem from every direction and can’t figure it out. If your treasury team is in either of these situations you should consider the following hidden and real opportunity costs involved in building your own FX management system.

Buy vs Build: 8 Important Points to Consider

1. What’s your FX experience level? Does your treasury team have over 130 years combined experience and expertise in FX and treasury? Has your treasury team deployed more FX Management Systems for both SAP and Oracle than any other company in the world? Experience matters, when you work with FiREapps it’s not a “learn as you go” project, it’s working in a Best Practices application right from the start.

Buy vs Build

2. Treasury Experts are not IT Experts and IT Experts are not Treasury Experts. You don’t need another project to manage, but the reality of that is the communication gap can be immense and it’s going to take considerable resources from the treasury team to manage it. It often times turns out that the results are no where close to the original vision. It’s not the fault of either organization, it’s just the reality of how inter-department communication often turns out. At FiREapps our developers and FX experts have worked together over the span of hundreds of projects, nearly a decade and know each others thoughts without even talking (ok, that’s an exaggeration, but it’s close).

Buy vs Build

3. Cost of Expertise. When you build your own FX Management System you absorb the entire cost, this includes both monetary and human capital cost. At FiREapps we we have a combined 130 years of experience building the application and spread the costs of development and expertise over thousands of users. This equates to a better application, at a lower cost, for all users.

Buy vs Build

4. If you do build your own FX Management System how are you going to keep it current? Not only do we work in an ever changing foreign currency environment but businesses change through growth and attrition too. What will you do if your company makes an acquisition and expands to more locations in more countries? Often times “updates” can turn out to be as big as the original project. Are you prepared for that possibility? Having a FiREapps subscription means you can access the application from anywhere in the world and scale the number of users to meet your needs. We also go through major release updates annually with minor updates throughout the year. At no additional cost to you.

Buy vs Build

5. How long will it take you to build your FX Management System? With volatility rates today millions of dollars can be lost while waiting for your home grown system to be finished and tested. We recently had a client tell us they first talked to FiREapps in 2007 but for various reasons didn’t purchase. After a recent acquisition in Europe caused major FX losses they had no visibility to prevent, they realized the amount of the loss was greater than if they had purchased FiREapps in 2007 and maintained their subscription all the way through 2014! Another client told us FiREapps gave them the visibility to make one trade that saved them a loss valued at more than 100 years of paying for FiREapps. In today’s volatile currency markets do you really have time to design and build your own system?

Buy vs Build

6. Build Your Own – Build it Alone. We know your treasury team is smart, but two heads are better than one and joining the FiREapps Family gives you access to not only 130+ years of FX and treasury experience on our client services team but you also gain access to hundreds of members in our FiREapps Community for as long as you are a FiREapps customer.

Buy vs Build

7. What happens if you get hit by a bus? On the surface it sounds like a ridiculous question but home grown systems almost always rely on the expertise of one person who knows how to get around the potential self-inflicted wounds it can create. What happens to the organization if that person is no longer there? Relying on the existence of a single person (or a small few) to never leave the organization is unrealistic for any savvy CEO or CFO to consider.

Buy vs Build

8. Are you creating another process to manage or are you building the starting point for your FX program like you should? To do that your home grown FX Management System needs to integrate with current or future TWS, TMS or Trading platforms. The FiREapps platform is ready-made to integrate with the leading Trading Platforms and Treasury Management systems. Whether you are interested in automating trade feeds to single bank platforms or multi-bank platforms such as FXall, 360T and Bloomberg, FiREapps extensible workflows can create and send pre-formatted trade files to facilitate your straight through process.

Buy vs Build

Call for Action

If you’re thinking of building your own FX Management System or have tried and still not getting the results you hoped for give us a call. Our FiREapps product experts can explain just how easy it can be to get up and running on FiREapps so you can spend your time analyzing your data instead of managing a project.

Contact a FiREapps Product Expert