Written by Anne Lukas
Posted on 02/11/2015

Stargazing: The Credit Manager of the Future

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There is a widespread stereotypical impression of the credit manager. First, they are seen as highly professional and painstaking in their work. However, they are also perceived as someone who is perhaps resistant to change and new technology, who invests little time and effort in training and professional development - a recipe for disaster. No credit manager can afford to be left behind by ignoring the need to evolve - and fast.    

The need to adapt

We’ve decided to challenge this stereotype and paint a picture of a scintillating new breed of credit-management professional – the Credit Manager 2.0 – who is keenly aware of the need to be constantly adapting their skills and knowledge in the face of the volatile, uncertain, complex and ambiguous world that we all live and work in.

That’s why we’ve carried out a major research project across more than 20,000 companies in the UK, the Netherlands and Belgium. And we’ve found that some aspects of the stereotype are still unnervingly accurate.

Sure, the new breed does exist – but a disturbingly high proportion of respondents still maintain that managing Days Sales Outstanding (DSO) by ensuring that invoices are paid on time will remain their overriding priority as they head for 2020.

Big Data – the game changer

And even where there is an awareness of the growing need to look outside the organisation, using Big Data to gain an overview of competition and the market, this is only slowly gaining traction. Just 16 per cent of those in the UK and the Netherlands (even fewer in Belgium) said their primary interest was in customer and market insights that would enable them to improve their companies’ commercial opportunities.

This is not to say that a majority of today’s credit managers are without an appreciation of some of the ways in which the world is evolving. Close to three quarters agreed fully or partly that increasing volumes of Big Data will make it easier for future credit managers to predict a company’s financial health, for example.

Change is the only constant

As times change, credit managers are not responding to the urgent reality that modern credit management is increasingly being driven by an extremely fast-moving digitised environment in which change is the only constant. To consider just one factor, the very nature and structure of the organisations that credit managers need to consider as an everyday part of their job is changing beyond recognition.

A simple example is Airbnb. At the time of writing, Reuters has just announced that this phenomenal business is set in 2015 to double the number of nights booked to more than 80 million. But this is a company that actually possesses very little – the hard assets belong to the many thousands of ‘partners’ who own the properties in which the company trades. Consider Uber too – another organisation that possesses very little. Calculating such a company’s creditworthiness demands a completely new way of looking at things – and this is just one hint of the changes ahead as more companies adopt this model and others yet to be invented.

Future-proofing for success

The need for credit professionals to future-proof themselves is nothing new. But, due to the availability of data, the credit manager role will be almost unrecognisable. Undoubtedly acting more and more at the front of client processes, Credit Manager 2.0 will focus less on DSO and will be instrumental in helping the organisation identify and look after their ‘best customers’, thus maximising the opportunity to increase profit.

To survive in 2020, Credit Manager 2.0 must command the troops to lead them to the best customers. Data will be their best friend. In fact, data will provide the insights required to identify this panacea of the best customer.

But how to go about identifying and acquiring the new skills they need. The most important thing here is to emphasise the importance of lifelong learning – and above all, of keeping up with the many constantly evolving means of acquiring the knowledge they seek.

Learning to fail

Take for example the concept of ‘just-in-time’ learning.  This provides an easily accessible learning environment that people can visit whenever and wherever they want via any smart device to grab the fragments of learning they require at the precise moment they need them. It’s a far more efficient, cheaper and less cumbersome option than traditional classroom teaching, meaning people are much more likely actually to use it.

And that’s fundamental – what’s really important is that people learn at all. To adapt a cliché, failing to learn is learning to fail. Things are moving too fast not to act right now – because all too soon it will be too late to catch up. Credit Managers please take note.