In my last post I wrote about some hypotheses around why more credit & collections professionals don’t do more batch portfolio scoring.

Here are some thoughts that address each of the barriers in order.

As ever, let us know what you think.

This month when we introduced our new BOOST tool we got some interesting reactions.

This post isn’t a commercial for BOOST, but some background is relevant: BOOST is a self-service batch processing tool that enables the credit & collections professional to upload their portfolio of customers or potential customers, add credit scores to each record and even add corporate linkage. The data comes back in minutes, not weeks.

The reactions? Many of our customers instantly “got it” and rushed to test the new BOOST functionality. However, some of our (typically smaller) customers didn’t quite know what to make of it. They had never done batch scoring before and some didn’t even know what it was.

It made me wonder why more credit & collections professionals don’t do batch scoring. Whether it’s through BOOST or services from other data bureaus, portfolio scoring can offer compelling benefits to the credit professional. In a world where regulators and CFO’s are pushing to have every exposure analyzed at least once per year, batch scoring is a way to meet the requirement while saving the time it takes to physically look at every account. Pricing is very attractive on a per-record basis, often significantly lower than purchasing a full credit report. The big consumer creditors like banks and mortgage companies have recognized this value and done portfolio scoring for years.

So why don’t more commercial credit professionals take advantage of it? My sense is that the reasons are more to do with conditioning and habits than anything else. From watching the industry and listening to some of our customers, here’s my list in order of what I’ve heard most often:

1) Tradition - “I don’t trust credit scores. A credit professional should conduct a more thorough review of trade experience, public records, references etc. in order to truly analyze a company.”

2) Hassle - “It’s a hassle. First I have to fight with IT to get the resources to pull the file. Then I have to deal with my sales rep who will then submit the file to corporate for processing. After a week or two I get a file back. It’s just not worth the effort.”

3) Overwhelmed - “I don’t know what to do with the data when I get it back. If I get scores back on 5,000 accounts, where do I start and how do I make sense of it?”

4) Budget - “Where do I get the budget for it? It’s a large one-time fee that could potentially consume my entire budget for the year.”

5) Freshness - “Batch scoring is a good way to get a view of the portfolio at a point in time, but what about the other 11 months of the year? I’d rather pull a credit report as and when I need it so I get the most recent data.”

Next time I’m going to address some of these barriers to adoption. In the mean time, tell us what you think.

A few years ago I wrote an article about the importance of utilizing and automating the wide variety of information that is available to credit professionals looking to efficiently and accurately make credit decisions. Now, looking back, it is easy to see how the same concept of using the right piece of information for the type of decision you are making really applies to all job functions. It is an intuitive concept that better information leads to better decisions, yet a surprising number companies still rely on a single source of insight either because of budgetary constraints or the complexity and time commitment of IT integration projects.

Building on the theme that information wants to be free, both in the in monetary sense and in terms of accessibility, the time for non-IT information consumers has never been better. Now this going to sound like I’m picking on IT a bit, but as a friend of mine wrote a few months back in his blog, “Power is shifting to the users and away from IT departments.” I completely agree. Don’t get me wrong, there will always be an IT department, but the rise of on-demand applications has ushered in a new era of productivity and time to solution expectations. Instead of multi-year (or decade) ERP implementation, customers are achieving paybacks in months (and expecting it).

This has equally extended into the world of content with the rise of free and open APIs from 100s of companies the flow of information keeps getting easier and cheaper. Mashup directories such as Programmable Web and API delivery aggregators such as StrikeIron are providing gateways to find and deliver the information needed for essentially any application you want to build. Similarly, business intelligence vendors such as Business Object’s Information OnDemand are giving access to the data for the analysis you need to conduct. These trends, combined with widgets and plug-and-play integration provided by platforms like salesforce.com’s AppExchange make it even easier to simply access content you need when you need it.

So whether you are a credit professional setting up a credit line on a small business you’ve never heard of before, or a sales rep looking for a nugget of insight that will give you an edge, now is the time to help yourself.

Or you can just stay on IT’s waiting list.

“Information wants to be free” - these were the very first words I wrote on my first whiteboard, two decades ago, following my first substantial promotion in my technology career, which came with a nice, if oddly shaped, office and as plush a set of furniture as I was able to after-hours requisition. I certainly wouldn’t have thought that so many years later the sentiment contained in those words would have set the stage for unprecedented freedom of information exchange via global networks, created a multitude of new industries, and brought about the end of others. I don’t recall a lot of the other things that ended up on and off that surface, but I doubt any were as fundamental or stood the test of time as well.

I’ve struggled with differing interpretations of this saying over the years. My initial perspective, formed in the early 1980’s around exploration of early personal computer technology, public electronic bulletin board systems, and other less-public resources, was one that if important information existed that everyone should have access to it, and I carried the words as the first entry in a personal information-age bill of rights. As time passed, and as the amount of information in the electronic domain ballooned, it became clear that there were important boundaries that need to be observed in order to protect personal privacy and the interests of the larger community. When the amount of information, and most importantly, easy access to it hit critical mass, it became clear that information needs validation, structure, and a pedigree so that each of us can assign appropriate weight to a given “fact” or version of the truth.

Today, I am a strong believer that information wants to be available and that it has worth, both in its raw form and even more in how it can be applied. However, given the negligible investment required to publish in our virtual playgrounds, it’s essential to pay close attention to how information has been gathered, processed, protected, stored, and maintained over time. A recent pointed example of credibility given where not deserved illustrates how meticulous you need to be when evaluating any data point. Careful sourcing, intelligent grooming, and constant refreshing/re-validation are critical in a world where today’s facts are tomorrow’s trivia and next week’s ancient history.

It’s been a long way from acoustic modems to fiberoptic data transmission. But that technology is just a facilitator of the fundamentally important ability to share information between interested parties, an activity that helps all of us have a better understanding of the world we live in. And isn’t that actually the point?