The new mantra for business involves concentrating on so-called core
competencies, and looking to outsource so-called "non-core functions" -
including support functions such as credit and collection. Companies
are becoming more and more willing to trust outsourcing companies with
complex and critical tasks such as credit decision making and risk management
despite the fact that outsourcing these critical tasks even five years
The new reality in American business is that there are no "sacred cows" and
any department or any task may be considered for outsourcing --- if it can
be demonstrated that it can be outsourced safely and handled competently.
Credit professionals need to be concerned and to remain vigilent about the
risks of outsourcing. It is no longer a strong argument for credit professionals
to suggest that the work they do cannot be easily duplicated by an outside
service. The outsourcing companies have become quite adept at deflecting this
type of criticism.
So what should credit professionals do?
Become an active participant in the process of evaluating the outsourcing option.
By being on the inside, credit managers can often influence the company to
outsource some segments of the credit and collection function while retaining
others. For example, it is not uncommon for the credit manager to convince
senior management that while it may be acceptable to outsource routine collection
calls and dunning notices, it would be best if the following functions were
- Establishing credit limits
- Releasing orders
While there are no guarantees, this participative approach gives credit
professionals the inside track on credit outsourcing.
© 1999 All Rights Reserved