The mantra for businesses in the 1990s involved concentrating
on so-called core competencies and looking to outsource so-called "non-core
functions" - including support functions such as credit and collection.
Companies continue to entrust to third parties complex and critical
tasks including the credit function.
Credit managers should recognize that in the recession plagued post-9/11 America
there are no sacred cows. Any position or department might be eliminated and
outsourced if a good/strong case can be made that tasks previously performed
in house can be:
Outsourcing companies have become adept at convincing
senior management that the credit function is not a "core competency" and
should be outsourced to a company the considers risk management, collection
and dispute resolution to be its core competencies.
What can credit managers do about this? They should to be an active participant
in the process of evaluating the outsourcing option. They may be able to convince
senior management that some if not all of the company's core credit functions
should be retained in house, including these:
While there are no guarantees that this approach will
work, the credit manager will certainly be better off working on the
inside than being excluded from the evaluation and decision making