Determining whether outsourcing is the right move for your credit department.

Many information technology (IT) departments are outsourcing key functions these days to boost efficiency and profitability. But what about outsourcing your credit department? As a credit manager of a large organization you may face a number of resource issues, some of which you may be able

In general, outsourcing can address three major areas in a credit department: systems management, project implementation and day-to-day credit management. Systems management is the maintenance of all hardware and software, including daily processing, upgrades, software fixes, disaster recovery, backup and system performance. Project implementation includes everything required to install and implement solutions related to credit management. This may include third-party resources, such as application vendors and/or consulting firms. Day-to-day credit management includes daily activities such as customer service, collections and cash management, among others. Having an understanding of each area as it relates to your business needs will help you determine if outsourcing is an option for you.

Addressing Systems Management Issues

Technological advances have changed the landscape for credit management software creating a plethora of internal and external data sources that credit managers need to do their jobs. Access to and efficient management of these data sources is essential for reducing days sales outstanding (DSO), managing collection efforts and staying customer focused with current information. Tying all the necessary data together from internal billing/sales order entry systems, to external credit agency links and other sources can be challenging for a company with limited resources. Data must be accurate, timely and guaranteed around the clock if a company wants to maintain a competitive edge.

Outsourcing may be an option for a company with limited IT resources. The benefits to outsourcing systems include: better control over IT costs for a specific application, minimized investment in specific applications, up-to-date versions of specific software applications and effectively deployed resources within an organization. In addition, you can utilize the latest technology for your business and your in-house IT staff can focus on more important issues. The outsourcer is responsible for guaranteeing that the systems and information will be there 24 hours a day, seven days a week. For many companies, this provides a real sense of security.