Cloud Computing and the Credit Professional

Over the past few years, credit managers (along with the rest of the world) have come to know “The Cloud.” This mysterious object stores all of our data, has unlimited processing power, runs virtually every modern system and can be accessed anywhere from any device. However, there is still a great deal of confusion about how it works and the associated benefits of utilizing it particularly for the credit industry.

Just what is “The Cloud?”

The phrase “The Cloud” can be a little misleading. Many providers have their own individual cloud computing architecture which they provide for clients. Collectively, they have become referred to as “The Cloud” however there is not one all inclusive cloud. In fact there are many individually managed infrastructures, each with their own distinct benefits. Firms such as Microsoft, Apple, Rackspace and even Amazon (they sell everything!) provide publicly available cloud services. Private companies have begun providing their own internal cloud networks as well (you could make an argument that they have been doing it for years, but that could be it’s own topic for discussion.)

How does it work?

An individual cloud system is essentially a bank of servers all working together to provide processing and storage as needed to cloud clients. Clients can lease a portion of each server or groups of servers as their need increases or decreases over time. So instead of purchasing a server and setting it up in-house which you are tied to for the extended life of the server, you can purchase room and processing on selected portions of a cloud server. You can also release those portions easily if you no longer need them.

What are the benefits?

1) Lower Cost
2) Better Security
3) Higher Reliability
4) Environmentally Friendly

This list is far from exhaustive. However, cloud computing relies heavily on the concept “Economies of Scale.” Providers essentially buy in bulk which reduces the cost of all associated equipment, facilities, resources and services that would normally be charged at higher rates to individual organizations. In doing so, the application providers (such as ourselves *cough* self-promotion *cough*) don’t need to build our own facilities and in-house equipment. Such savings are then passed on to clients by way of reduced price for SaaS implementations. For those organizations that would normally house their own implementations, it results in similar reductions by way of the cost of IT resources, physical space and security, equipment and overhead carrying costs associated with equipment lifetime and disposal. Speaking of disposal, less physical machine space going wasted and unused results in less materials being sent to landfills once the usable lifetime of an in-house server is finished.

You’ve said a bunch about cloud, what does that have to do with me?

Credit professionals have a unique role in every organization doing business on credit. You are asked to evaluate the risk of doing business with a new or recurring customer and make a decision on whether to grant credit based only on limited information. Often times, there are time constraints which can become a deal-breaker. The risk of default and/or fraud become exponentially increased. Moreover, they are often the most overlooked and underutilized section of the finance department.

Historically, the tools available for credit professionals were reserved for large organizations due to the cost of implementation (IT resources, servers, licenses, etc.) This is no longer an issue. Cloud computing offers the ability to have businesses large and small utilize the same tools at a fraction of the overall cost. However, many credit departments are still utilizing paper methods for both decisioning and storage. This is partly due to previous denials by upper management for funding the implementation of a credit management system (after a while of continued No’s, people stop asking.) But the game has now changed!

Due to the introduction of cloud computing, you can now implement a full credit management structure, company wide, with minimal IT involvement and do so at a reasonable price. Your infrastructure can grow and contract as you need. Information can be gathered rapidly and decisions can be made consistently, quickly and reliably. You can easily track history of your experience with a customer and identify potential issues sooner.

We can help. Contact us today to see what our cloud based offerings can do to assist in your credit management process.