Part one
In today’s collections environment, the challenges of meeting an organization’s financial objectives are more difficult than ever. Case volumes are higher, accounts are more difficult to collect and changing customer behaviors are rendering existing business models less effective.
When responding to recent events, it is not uncommon for organizations to take what may seem to be the easiest path to success — simply hiring more staff. Perhaps in the short-term there may appear to be cash flow improvements, but in most cases this is not the most effective way to cope with long-term business needs. As incremental staff is added to compensate for additional workloads, there is a point of diminishing return on investment and that point can be difficult to define until after the expenditures have been made. Additionally, there are almost always significant operational improvements that can be realized by introducing new technology and the relevant ROI models often forecast very accurately.
So, where should a collections department consider investing to improve financial results? The best option will probably not be the obvious choice and the mere thought can make the most seasoned collections professionals shudder … replace the core collections system with modern technology.
That said, let’s consider what has changed in recent years and explore why the replacement proposition is not nearly as difficult or costly as it once was. In addition, I’ll discuss how the value proposition typically makes this option extremely appealing today.
The collections system software industry is on the brink of a technology evolution to modern, next-generation offerings. Legacy systems are typically inflexible and do not allow for an effective change management program. This handicap leaves collections departments unable to keep up with rapidly changing business objectives that are a critical requirement in surviving through these tough economic times. Today’s collections managers face the need to reduce operational costs while improving other objectives such as reducing losses, improving cash flow and promoting customer satisfaction (particularly with customers that pose a greater lifetime profit opportunity). The next generation collections software squarely addresses these business problems and provides significant improvement over legacy systems. Not only is this modern technology now available, but, the return on investment models are extremely compelling and have been proven in markets where successful implementations have already occurred.
This blog is the first of a four part series. I will continue to explain, in detail, the benefits of next generation collections systems while specifically focusing on improved productivity and cash flow; reduced operational and overhead costs; and improved change management processes.
Please check back soon!