There are many different models in use to describe the lifecycle that products go through. The most common to many is model coined by Geoffrey Moore in Crossing the Chasm, which is derived from Theodore Levitt’s early product life cycle work first published in his Harvard Business Review article “Exploit the Product Life Cycle” in 1965.
The purpose of this post is to discuss how market maturity - specifically in the treasury management system (TMS) software industry - affects customers of such systems and what they can expect in a solution as the market matures.
As a typical market matures, it’s consumers (e.g. corporations and government organizations) have increasingly more choices to solve their problem. It doesn’t, of course, start that way. In the early days, buyers have two choices, continue to do things manually or build a solution themselves. Neither of which is ideal. Building it yourself means a substantial cost to your organization because the cost to develop isn’t shared across “many customers.” In the TMS market, early adopters had limited choices. They could either get their IT team to build something or build out program a spreadsheet. Over time, vendors emerged that built and offered what are now legacy, on-premise TMS solutions. Early TMS products weren’t complete and required assembling disparate components to build a complete solution to your problem.
Today, finance and treasury teams have a plethora of choices. As the TMS market moved from manual processes and spreadsheets to on-premise TMS platforms, several vendors and solutions emerged. Now a new breed of cloud-based TMS solution is available. Of course, not all these solutions are created equal. Vendors have tried to fix their legacy product to appear as a cloud-based offering, but beware of these wolves in sheep’s clothing. Change is difficult, but it is clear with the great choices available today that the time is now for organizations to replace that initial clunky on-premise solution they installed years ago or the spreadsheet they still use that hasn’t kept up with the changing TMS market or the constant stream of new regulations and increasing compliance requirements.
Not only are there more choices, TMS technology offerings today have more extensive feature sets. More functionality means your needs are better met. The best solutions offer much more than just cash management and also include risk management and working capital capabilities. This is leading to market growth. Not only is this evidenced by what corporations are buying, but the same transformation is happening with banks that initially built their own home-grown TMS and now are increasingly adopting more effective to leverage or private label a cloud-based TMS platform.
More choice and more functionality means that your treasury team to can focus on more high value projects. For those that take advantage of it, the bottom line is that maturity is good for customers… good for you.