Neil Doyle, Credit Manager explains, “The CLE process was not just put in place to close a compliance gap and to minimise risks, the vision was to be in a position to enable business growth by allowing operations to scale faster and more cost-effectively through technology, process and policy improvements.”
Microsoft engineering teams built a new platform (Bing Ads User Interface) for customers to manage campaigns and spend with Microsoft. At the front-end, teams in WOCS (Worldwide Online Credit Services) on-board customers and assign a credit limit for every customer based on their forecasted spend and risk profile. The engineering team built in functionality to track customer spend on an hourly basis and make this visible to both customer and Microsoft internal teams. The functionality allows the customer to spend up to their assigned credit limit and no more. The system also provides automated updates to customers and sales staff as they hit agreed spend thresholds, percentile wise.
Best practice and innovation
To take advantage of this technology WOCS had to adapt their processes to ensure customers who are genuinely increasing the spend with Microsoft did not go offline by hitting their credit limit, so they put in place a proactive daily review of each customer who spends an agreed percentage of the credit limit. At present the WOCS team are reviewing the credit limits proactively and increasing them when the customer’s usage is continually increasing, however, the functionality to automatically increase credit limits by using an algorithm is currently in development and it is expected to be launched in July 2017. The functionality will provide a periodical review of the customer’s payment performance and revenue patterns, if the patterns are showing revenue growth the system then performs an automated background credit check on the customer and the credit limit will be automatically be increased to match the customer spend and the risk profile.
Doyle concludes, “The next evolution of this solution to automate the reviews and assign increased credit limits to match customer spend and risk profile, will be truly revolutionary and I don’t believe any other provider will have this functionality.”
Pro-actively increasing credit limits from circa US$8bn to circa US$11bn in the last 12 months.
Bad debt reduction:
Estimate savings of circa US$2m over the past 12 months in comparison to prior year performance.
Significant customer and sales visibility of customer spend vs credit limit assigned.
Key learning points
Having the right people from all stakeholder groups bought in at the initial stage is key. Listening to all viewpoints and being willing to accept changes that impact on your vision of the overall outcome of the project.