Managing risk across a global customer base in turbulent times? – a guest blog from Dun & Bradstreet
Turbulent. Uncertain. Un-charted territory. Surely you have heard them all by now, but what to do?
Dun & Bradstreet argue that now is the time for credit professionals to implement Portfolio analytics.
This is the strategic process of segmenting your customer base for review, analysis, and action. Segmentation can be by geographic region, industry, account size, business unit, or whichever is of value to your business. The value to any business with more than 50 customers is to have a “big picture” view of your customer risk and at any point.
How Customer Portfolio Analysis Can Drive Revenue
Credit portfolio analysts who are already doing this are the best advocates and can attest to the insight and the hidden value such analysis unlocks. Furthermore as a substantial business enabler, portfolio analytics allow credit professionals to position themselves in a pivotal role.
Here’s how: By analysing the client portfolio, if the company can adjust behaviour by 1%, this can significantly improve profitability. The tools available in the D&B Credit suite of products enable this and Dun & Bradstreet have made some webinars available via the CICM platform to offer deeper tutorials on how this is achieved.
The key success factors are referred to as the 4 C’s of Credit for Portfolio Analytics:
Consistency – in credit applications. Aggregation and segmentation of portfolio data is the catalyst for more strategic decision-making. Credit managers can establish standards and a process for account reviews. Data-driven consistency allows for objective credit decisions: enabling an unbiased approach for reviewing credit limits.
Compliance – with internal and external audit relationships. By documenting the insights from the portfolio analysis, internal auditors can witness the fact-based management of risk. As many a credit professional can agree, a smooth audit is a very desirable thing. The insight provided by portfolio analytics also enables compliance and leverage with credit insurers and banks.
Consultancy – Armed with this new insight, credit portfolio analysts can support and advise other stakeholders and this can become critical if the company is considering any merger and acquisition activities.
Creativity – in using data to provide insight, uncover new opportunities, and drive value. For example, the credit team can identify the ideal customer profile that best suits the business need and develop a risk or profit-ranked list of prospects.
Fully leveraging portfolio analytics may take some perseverance. But nothing worthwhile comes easy!. All quality initiatives, process improvements, and ancillary activities are ultimately judged by the value creation, and whether it results in a strategic or competitive advantage.
To view the webinar visit https://attendee.gotowebinar.com/recording/5085372523177920259