CFO Tech Stack
Bottomline Acquires Treasury Xpress combining functions for CFOs
I was prompted to write about the CFO tech stack today as I saw that Bottomline acquired Treasury Xpress. The CFO Tech Stack has grown quite a bit in the last year. Is an acquisition like this driven by CFOs demanding to have only one vendor (aka One Ring to Rule them All). Or is the combining of the layers of the CFO stack more like the crazy looking building in the picture.
First let’s see what is getting combined in this acquisition.
B2B Payments: “are the transactions/payments made between two companies. These differ from other payment types that include P2P (person to person) and (B2C) business to customer. That’s because additional processes in place make them more complex.” (this is the key!) source: Tipalti
Treasury: ‘Their job is to create value by managing capital in a way that earns higher than expected risk- adjusted returns.’ source: CFI Website
A B2B payments company acquiring a Treasury company got me thinking about how separate these functions are and yet completely intertwined. Any treasurer would certainly know about payments and the impact on the organization’s current cash position and what funds are available for investment.
I always like to read a company’s website’s “about us” to see what buzzwords or real meaning a company says they have or value they provide and according to Bottomline’s Website they…
“Transforming business payments and processes for companies and financial institutions around the world. Obsessed with removing complexity. Automating and digitizing all that is possible. Every day.”
OK then, they work with corporates AND banks, they are obsessed, which is exactly what I want in a business provider….or do I? Not sure that Removing complexity is different than automating and digitizing and I actually LOL’d on the “Every Day” bit, as compared to Monday to Friday only?
Funnily enough Bottomline’s investor deck has a great summary:
“We make complex business payments simple, smart and secure.”
If anyone from Bottomline is reading this let me suggest using this investor tagline on the website. IMHO it is much clearer and a better value proposition.
Making payments easy is the goal of all overworked corporate finance and payment teams and their CFOs.
So what then is Treasury Xpress?
“As a leading digital, on-demand treasury management solution, TreasuryXpress makes it possible for companies of all sizes to access powerful, cost-effective, and easy-to-implement treasury management capabilities.”
Net-net, I am not sure actually. But a competitor of theirs, Kyriba has this much better overview on their website:
“Activate Liquidity. Transform how you use liquidity as a dynamic vehicle for growth and value creation.”
This is what a Treasurer wants and needs. A Treasurer’s KPIs are likely related to liquidity and value creation and NOT “accessing powerful, cost-effective ……”
Here is the VC Firm Redpoint’s take on a tech stack for CFOs. No right or wrong version and a16z has a version out there too. A key point is that the ERP providers on the high end often provide Treasury modules too.
So how does a CFO look at their Tech Stack and what functions would they want combined or melded for easier end of month closing or analysis of the books. Honestly with a good set of APIs to share data across Payments and Treasury Management Systems (TMS) I am not convinced you need one vendor for both and here is why. Different people are likely doing the job of Payments (AP or AR) or Treasury. Although in smaller organizations, let’s call them Mid-Market it might make more sense as an accounting clerk doing AP could want some cash management functions.
Doing research here I came across the always excellent IDC MarketScapes in the area of the CFO stack and Treasury, here ya go:
IDC MarketScapes that currently include Bottomline and/or Treasury Xpress:
- Worldwide Enterprise Fraud Management in Banking
- Worldwide SaaS and Cloud-Enabled Enterprise Treasury and Risk Management Applications
- Worldwide SaaS and Cloud-Enabled Accounts Receivable Automation Applications for Enterprise
- Worldwide Enterprise Legal Spend Management Vendor Assessment
So a CFO will need to read a lot of IDC MarketScapes to really get a good idea of what they need to buy. And this list does not include the Accounts Payable Automation Applications for Enterprise or the Procurement Automation Applications for Enterprise. And of course don’t forget to get your IDC ERP MarketScape for Enterprise or MidMarket too.
I like IDC MarketScapes, but if I am a CFO, I am exhausted at this point.
Whether the various pieces of the CFO stack are better combined or separate comes down to the organization.
This sample org chart above would likely be a midsize organization with simple financial needs. If this firm has a lot of international subsidiaries, that would add complexity to the organization chart and the systems required. But you should notice that Treasurer as is typical here is a separate person from the accounting function which oversees the AR, AP and accounting functions.
Regardless of anything I write here, we are going to see more acquisitions and mergers among the players of the CFO Tech Stack. If I had to guess I would put money on Tipalti, Bill.com, or TradeShift to be the next to acquire another box on the CFO Tech Stack chart.
