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Treasury & Risk Management – Rapid Deployment Solution – An Overview

Over the past few days there has been lot of blogs around Rapid Deployment Solution and it is slowly beginning to get steam.  There has been an To Blueprint or not to Blueprint – that is the question. and a conversation going on in the blog about RDS by Mark. 

Over here I want to clarify or put my views on a really excellent solution Treasury and Risk Management (TRM) and its relevant RDS solution.  TRM is now a part of SAP Financial Supply Chain Management (FSCM) solution, part of ERP itself.  It has an array of solutions related to treasury management with cash and liquidity management which is of prime importance today and the Treasury and Risk Management solution.  At a high level, TRM consists of 2 components – Transaction Manager for managing the life cycle of financial instruments ranging from Deposits to loans to securities and Risk Analyzer for managing the financial risk which would be inherent in any organization.   

The Rapid Deployment Solution for TRM concentrates on the most widely used components of transaction manager which are deposits, loans, foreign exchange and interest rate swaps and the basic market and credit risk management in risk analyzer side.  The scope of a TRM RDS solution is pretty strong, though not huge.  Today most of the customers manage these through “managed through a very complex system known as Excel”, as 1 of our customer had put it. 

SAP TRM solution has long been neglected because the customers did not find the need/requirement for an integrated treasury solution.  They were managing through spreadsheets and they continued to do so.   But sooner or later they are going to outgrow the functionalities of excel and would need a stable and auditable system.  This is where I guess an RDS solution would really enable the much required push/incentive for the customer.  A Treasury solution in a traditional way of implementation would certainly take around 4 to 5 months of implementation while in a rapid way is going to take something less than 12 weeks time.  Though I feel that, the scope covered through TRM RDS solution might not fit all the requirements of a customer, it is an excellent and strong platform.  Depending on individual customer requirements and its variance from RDS scope, as long as the customer scope aligns with 80% of RDS scope, RDS way is excellent to start and build further.  Individual customer variances, if not big can be implemented in parallel to a RDS solution or after implementing RDS. 

TRM RDS scppe

We have had many customer queries about the RDS solution including the cash and liquidity management part, but to clarify, TRM RDS does not include cash and liquidity.  Cash management is a solution typically specific for customer and master data intensive and hence the time frame and cost for implementation would depend on individual customers.

TRM RDS solution can be implemented in multiple ways through Solution Manager or through Solution Builder or a fully manual implementation.  SAP Note number 1486804 speaks about the TRM RDS solution and the pre-requisites in detail.  However there is a major feature in TRM RDS which is the correspondence to the external partner through a correspondence framework available in SAP TRM solution from EH3 onwards.  One of the pre-requisite for implementing TRM RDS is the availability of Enhancement Pack 4 activated. 

To verify the feasibility of implementing the solution, we did an internal implementation and choose a fully manual implementation mode which logically should take the maximum time.  We were able to successfully implement the solution and do a functional testing in 3 weeks which when added with a scope verification stage initially and an integration and user acceptance testing phase along with training can be implemented in less than 10 weeks itself.  This included a small roadblock regarding the scope and the SAP team did verify and clarify on the scope of RDS within 2 days.  There were no major issues/show stoppers relating to the scope/functionalities.  For people who are used to implementing TRM component, it takes some time to get used to the nomenclatures for the product/transaction types (Everything here is in ‘Y’ namespace).

If the initial scoping phase with the customer is handled properly i.e. the solution is fully explained to them and the functionalities explained along with proper finalization of the requirements should enable the solution to be implemented well within the promised timelines of 12 weeks.  Proper care must be taken to ensure that the customer understands the solutions for which videos/demos of existing system would enable the customer to visualize the solution.  A demo system, if available, with the implemented components would go a long way in the customer understanding and appreciating the functionalities.  After all the bottom line of all this is that the customer should know how to use the functionality properly failing which the whole exercise is a colossal waste.

RDS solution has various accelerators like pre developed test cases which customers can also use during the user acceptance phase as well.  Unlike traditional model, in RDS everything is transparent and the customer knows upfront what he is getting.

Even though the TRM RDS solution mandates an EH4 system, customers who are on base ECC6 (which is a large number) and not activated any of the enhancement packs, can still implement treasury RDS with certain changes to scope like reduced correspondence features etc.  The whole solution would have to be implemented manually along with necessary changes to the configuration required in order to adjust for the older version.  We did this in our internal system and managed to implement within the same timeline of 3 weeks but with certain changes to configuration.  There will be certain reduced functionality which can always be added when the customer moves to the corresponding enhancement pack.  But to identify the differences in scope and the additional configuration required would warrant prior experience of implementing it.

In all, TRM RDS solution looks promising and the timeline of less than 12 weeks looks very much possible with proper care and planning.  TRM and FSCM combined together are growing and gaining more prominence and looking forward for a year of increased adoption from customers. 

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