We have dedicated this copy of Bernie's Brainers to the subject of Outsourcing. Part of our reasoning has been self-serving inasmuch as we have been involved in the outsource field for several years and it's the growing portion of our company. On a larger scale, it has been a mild, if not belated, hit within the credit field. Outsourcing has been around for some time and in the 90's became a reasonable solution to downsizing,reengineering, consolidation or whatever term you choose to reflect the change in staffing. Areas such as high tech, procurement and inventory embraced outsourcing while the credit function was felt to be "home grown" and outsourcing was not a viable option. Downsizing and consolidation changed all that. Outsourcing has been embraced by all industries with the larger industries more willing to explore outsourcing options. Outsourcing may not be for everybody but next time staff increases are needed or new processes are brought into your department without staff, here are a couple of thoughts on why you should outsource.

IMPROVE CORE BUSINESS FOCUS - Outsourcing allows you to focus critical energy resources on core business functions such as key accounts, credit decisions, business development, while leaving operational details to outside experts. Companies can dilute precious resources that take away from the bottom line.

ACCESS SPECIALIZED EXPERTISE RESOURCES - Outsourcing firms provide access to specialized talents, resources, techniques and technologies that can only be maintained by a company that has focused its business on providing top rate services in a particular area of expertise. Often a company will feel itself in need of a highly specialized function and in order to accomplish this, will need highly specialized staffing. When the job is done, the need for staffing goes away as well.

AUGMENT RESOURCES - Internal company resources can be outstripped for a variety of reason; i.e. growth, unusual new projects, reorganizational problems, sudden staff declines. Outsourcing can quickly fill needed resources that were not available internally.

ECONOMIES OF SCALE - Because outsourcing providers can spread the benefits and costs of technology, hiring and training expenditures across a number of clients and over a period of time, they are able to do so with economies of scale not available to a company trying to accomplish the same objective.

RISK SHARING - Because conditions change so quickly, there are tremendous risks involved in making most technology and employment decisions. Outsourcing firms make investments on behalf of many clients, sharing the risks of those investments among a broader base. These and many other areas too numerous to mention in this article, contribute to outsourcing decisions. If you have not considered it in the past but have areas in your organization you can't manage efficiently, speak to someone in the outsource field. Whether on a short time basis or long-term partnership, you may find outsourcing the best management decision you can make.

Facts from The Outsourcing Institute's Annual Survey Outsourcing End Users:

Top 10 Reasons Companies Outsource

1. Reduce and control operating costs
2. Improve company focus
3. Gain access to world-class capabilities
4. Free internal resources for other purposes
5. Resources are not available internally
6. Accelerate reengineering benefits
7. Function difficult to manage/out of control
8. Make capital funds available
9. Share risks
10. Cash infusion

Top 10 Factors in Vendor Selection:

1. Commitment to quality
2. Price
3. References/reputation
4. Flexible contract terms
5. Scope of resources
6. Additional value-added capability
7. Cultural match
8. Existing relationship
9. Location
10. Other

Top 10 Factors for Successful Outsourcing

1. Understanding company goals and objectives
2. A strategic vision and plan
3. Selecting the right vendor
4. Ongoing management of the relationships
5. A properly structured contract
6. Open communication with affected individuals
7. Senior executive support and involvement
8. Careful attention to personnel issues
9. Near term financial justification
10. Use of outside expertise

ICY PATCHES

George took his brother's coat and cleared a chair for him by the fire. "How are the roads in Buffalo?" he asked. "They're bad around here."

"Even worse my way," John told him. "It took me just two hours driving to get here. The last half of my route was on the highway and there I averaged ten miles an hour better than the steady crawl I'd kept to for the first half. And the second hour I drove eight miles further than in the first."

Winter driving can be tough! How far had John driven?

ANSWER TO NOVEMBER'S BERNIE'S BRAINERS
Care, Cares, Caress
Prince, Princes, Princess

One of the many services we offer at CCC is in-house collection seminars. In October, we conducted a basic collection seminar for a client in Colorado. 25 collectors/credit techs attended two 1/2 day sessions dealing with such issues as negotiations, listening techniques and collection problem solving.

In early December, we conducted another in-house seminar for a Rochester Telecommunications company. A 1/2 day session was conducted on negotiation techniques to assist the credit and collection units to better perform their jobs. CCC has scheduled several other seminars on such subjects as litigation, tricks of the trade, bankruptcy and negotiations. If you feel this may be of benefit to your organization, ask your sales rep for more information.

THE CHECK'S IN THE MAIL

A client that constantly needed prompting for payment promised a payment would go out January 4, 1995. The holidays came and went and the first of the year the postage went up. On January 12, 1995 the promised check had not been received and in our next contact with the client her excuse was "the lines at the post office were so long with everyone buying stamps, I just didn't have time to stand in line. I did manage to get some stamps today so the check will be in the mail today."

Refer a customer and we'll treat you to dinner for two at a restaurant of your choice. Call your sales rep for details