Posted by: Gerald R Delisle | December 26, 2010

Step by Step Guide for Improving Workflow Process

 The essence of Workflow Process Management’s(WPM)  value is the ability to improve operational efficiency—to process more with less effort, achieving higher quality outcomes. As a result, CIO’s and IT executives have identified WPM as their top priority in surveys by Gartner Group and CIO Insights. 

WPM effects change by dissecting, analyzing, and re-engineering the workflow processes that drive almost every kind of business.  

An effective WPM methodology increases efficiency between people and machines by automating routine tasks, allowing people to work more efficiently and strategically.  An effectiveWPM methodology should reduce the number of people required to perform such tasks and speeds up process cycle times for getting things done.  Also, WPM methodology creates a new paradigm for continuous process improvement as part of a corporate culture delivering high performance.

WPM: Conducting a Comprehensive Workflow Analysis

  • Model cross-functional workflow diagram on existing business processes for department or project.
  • Identify all end to end business processes
  • Identify all types and points of input
  • Identify all types and points of output
  • Identify transaction errors and bottlenecks.
  • Identify data quality and validation issues
  • Identify all manual processes and work-arounds
  • Identify time-consuming activities and time wasters
  • Identify hidden system fixes and processes
  • Identify all internal and external forms
  • Write-up on nuanced issues and process flows
  • Identify all reports managers wish they had
  • Identify all reports users and managers use
  • Identify all data and report shortcomings
  • Create Joint Process Development (JPD) team of users to get consensus on existing processes and discuss new workflow possibilities
  • Model cross-functional workflow diagram with suggested new business processes and automation engaged for management review and approval.

Benefits of WPM Strategy

  • Automate all routine tasks and activities
  • Enhanced data quality and validation
  • Elimination of manual entries, errors and bottlenecks
  • Integrated workflow with cross-functional impact
  • Improves transparency
  • Consolidate all input points both internal and external
  • Reduced process time cycles
  • Staff has more meaningful and challenging work
  • Staff becomes more strategic through enhancing data and process quality control and policy compliance
  • Paradigm shift to thinking of continuous process improvement becomes embedded in culture
  • Consistent and standardized execution of task
  • Make better decisions
  • Clear picture of old business processes and a consensus built new business process methodology makes IT development much easier.
  • More efficient business process flow reduces cost and increases profitability.

To get a copy of SRM Partners Step-By-Step Guide to workflow Process Management send your request to

Posted by: Gerald R Delisle | July 28, 2010

How to Build a Credit Policy – Series

A company’s credit policy is a way to establish controls and regulations to guide the organization on how to measure, monitor and control credit risk. All types of businesses can benefit from having an established credit policy with defined limits approved by management to allow for rapid and efficient credit assessment on customers, counterparties, vendors and the like. Ad hoc credit systems are costly in time and expense and raise unintended financial risk to the firm.

In an ideal environment, the Board of Directors should establish a risk committee to review existing Credit Policy (CP) to determine its appropriateness for the organization’s appetite for risk. Further, senior executives from the Chief Executive Officer through the VP and Director levels representing the major disciplines in an organization should be involved in crafting a Corporate Credit Policy Statement. Their collective involvement should design and authorize the requirements for credit risk assessment and permissible credit risk tolerance ranges used in assigning unsecured credit limits for customers and counterparties.

Management must determine what level credit risk is acceptable for its corporate credit policy. This can be done by ascertaining what enterprise risk type best fits their strategic objective. Generally, companies fall into four major enterprise risk types:

1. Risk Avoidance – conservative credit policy
2. Risk Mitigation – moderate credit policy
3. Risk Retention – aggressive credit policy
4. Risk Transfer – to transfer credit to another entity

Enterprise risk types and thresholds are important to make certain the company’s credit policy is aligned with the intentions of senior management.

Further, senior management has the responsibility to create a well-defined CP with the guiding principles utilized for credit risk research and analysis while establishing permissible credit risk tolerance ranges that clearly define limits and controls.

Part of the process of crafting an appropriate CP has to do with the cost of implementing a specific CP over another.

To glean enough insight into what strategy works best requires an evaluation of the various information technologies currently being used, what upgrades are possible, the cost structure of the various credit services being purchased, the personnel required to carry out each strategy and most of all what is the expected credit loss ratio.

Senior executives must be adept at creating and handling good organizational policy for a variety of reasons and disciplines.

Those executives who spend a minimum amount of time defining their company’s credit policy and evaluating the effectiveness of the tools their credit risk managers use can expect improvements in corporate performance by reducing costs, mitigating losses and creating an effective and disciplined process.


Credit Policy Institute

The Credit Policy Institute is a creation of Strategic Risk Management Partners
(www. ) which is a firm whose staff is devoted to creating the guiding principles on Credit Policy making for large and small companies who can benefit from a disciplined judgment process. These guiding principles are for all senior executives and Boards of Directors who aspire to improve corporate performance and more specifically the approach utilized in credit risk assessment and determining acceptable risk tolerances and how they can be managed, monitored, controlled and regulated within their organization.

Credit Policy Institute features a 12 part series on the components necessary to build and implement a sound credit policy.
How to Build a Credit Policy – Series
Series 1 – Credit Policy – The Preface
Series 2 – Overcoming the corporate culture and mindset for an in-house Corporate Credit Policy
Series 3 – Corporate Credit Policy Statement Preamble
Series 4 – Strategic Relationships of the Corporation
Series 5 – Identifying corporate structure
Series 6 – Creating Corporate Risk Model Identifiers
Series 7 – Predictive Credit Scoring Model
Series 8 – Scorecard output and Corp sign-off requirements
Series 9 – Pass, Fail and limited unsecured credit lines
Series 10 – Comprehensive Tracking System
Series 11 – Sample Corporate Credit Policy
Series 12 – List of companies for Credit Scoring Software

Posted by: Gerald R Delisle | October 2, 2009

Credit Risk Management – A Ticking Time-Bomb

Most business transactions in the United States and other industrialized countries are executed on open credit terms. Companies routinely sell their goods and services without securing any up-front guarantee that they will be paid for them.

Trillions of dollars are at risk.

You’d also think with so much money at stake there would be air-tight standards and controls in place to help make decisions about who is creditworthy and who is not. And you’d think the governing principles for these standards and controls would be set at the highest levels of an organization.

But the reality is that one year after the worst credit crisis in memory—a financial debacle in which the flow of credit came to a virtual halt, paralyzing the global economy—critical decisions about which corporate counterparties are creditworthy and on what terms are still being made in an ad hoc manner. And the standards for extending credit—and therefore managing risk—are still being made in the back office rather than the corner office where they belong.

As an executive who has spent most of his career analyzing credit and advising clients on how to manage credit risk, I continue to be amazed at how few world-class companies treat this vital function with the same seriousness and sophistication that they treat other mission-critical tasks. Major multi-national corporations that would never dream of doing without state-of-the-art systems for managing production, inventories and pricing, fail to protect their businesses by having a state-of-the-art system for managing credit risk.

When I go inside a company, too often what I find is credit decisions, with material consequences, are still being made by mid-level managers in the “credit department,” guided by little more than their own discretion. Checks and balances are accomplished through an unwieldy process of garnering co-signatories, a daisy-chain approach in which the next person on the list is likely to assume that the one before has done the due diligence.

There is a better way.

It begins by recognizing that credit policy needs to be made—in a formal and holistic manner—in the C-suite. Senior management needs to establish enterprise-wide parameters that address the most basic risk-management decisions. How much exposure to risk can our company tolerate? What metrics are being used to assess the financial health of our counter-parties? Is the enterprise looking at all the strategic counter-parties?

Risk comes from exposure not only to customers but vendors, suppliers, insurers as well as prospects in the pipeline. And risk can also come from within. There’s an old saying in the credit industry that ‘the louder the sales department yells the bigger the credit line.’ Management needs to send a strong message that credit lines need to be extended and withdrawn based on established discipline, not personal persuasion or relationships.

The next step is to make sure the professionals actually charged with crunching the numbers have the right tools available to them and have been adequately trained to use them. Credit-scoring software that automates the process of establishing creditworthiness has evolved enormously from its infancy and the best products now offer a menu of industry-specific financial metrics, many of which can be validated through correlation analysis.

At a time when companies are changing terms of payment—speeding up collection of cash and slowing down their own payments—it’s critical to know whether this is a sign of a healthy company trying to conserve cash or a distressed company playing for time. The technology exists to make this determination and it seems obvious that having it would be money well spent. But I have been surprised time and again by how hard it is for credit managers to get the resources they need to perform the vital task they have been asked to do.

I recently consulted with one division of a multinational company where it took nearly two years able to complete its annual credit reviews of its thousands of customers. This left the company chronically exposed to unknown levels of risk. After we developed a comprehensive credit-risk management solution for this company, it was not only able to review all of its customers in just four months, it also established an early-warning system to monitor risk. The process was so efficient that other divisions of the company adopted these practices, further centralizing the risk management function and producing more cost savings and risk mitigation.

Another multi-national client had a tedious credit review process that required 10 to 15 page write-ups for each one of their thousands of customers, which up to 10 executives then had to read and sign-off on if the credit line was more than $250,000. After introducing a new credit policy strategy and months of vetting the process to ensure good results, this company was able to streamline the process dramatically, reducing the time it took to produce reports and the size of the staff generating them, all while enhancing the credit quality.

There are a growing number of success stories out there like these. And they should become the rule, rather than the exception, if senior executives focus on the value and the necessity of treating credit risk management as a vital priority.

The tools and the know-how exist to protect large, complex organizations from unnecessary risk. Now it’s up to the decision-makers to decide it’s time to act.

Gerald R Delisle
Chief Executive Officer
Strategic Risk Management Partners
Email –

Posted by: Gerald R Delisle | July 22, 2009

US Proposes Credit Rating Agency Restrictions

July 22, 2009 -Obama administration on Tuesday proposed setting disclosure requirements and limits on credit ratings agencies. Regulators have questioned the independence of the firms which are paid to grade securities by borrowers and underwriters who want to sell them. The Treasury proposal would create an office at the SEC to supervise the firms. They would be required to disclose preliminary ratings of companies and use different symbols for structured products to make investors aware of the risk.

Credit Guru

Posted by: Gerald R Delisle | July 21, 2009

China – The Emerging Frontier

We are beginning to see Chinese firms outperform the broad market. The Chinese online video gamers, Perfect World  and (PWRD & CYOU) each shot up 10% in heavy volume on Monday July 20, 2009. Another gamer Shanda Interactive (SNDA) shot up as well. Chinese based software outsource firm Vanceinfo Technologies surged 14%.  Fortune’s 2008 annual list of top 500 Global companies show that more Chinese companies are in the top 500 than ever before representing 7% or 37 companies and the US firms represented on the Fortune  list are at their lowest point ever with 140 companies just above 25%.

The post-war USA became dominant during the 1950s and 1960s because of its tremendous growth rates exceeding 10%. Since its boom years, the real growth rate of the United States has persistently declined during the last three decades. And in the latest decade we have seen growth rates of no more than 3.0% or less. Of course this excludes 2008 and 2009 which have seen huge negative numbers in GDP reaching a negative -6%.

GDP growth is the fuel that generates increasing revenue, improving profits, enhanced tax revenue and the ability to pay down debt. Currently, the USA sees itself as increasing its debt substantially in the trillions of dollars and growth rates are not expected to exceed 1% or 2% for the foreseeable future. This will mean little or no capacity to pay down significant debt, generate increased tax revenue and fund health care and many other initiatives.

This scenario makes clear that the USA will be a huge debtor nation in the future with little capacity to deal with its debt while trying to be the world’s security force and provide aid to all those that need it. We can see ourselves owing tens of trillions of dollars to countries that fund our debt such as China and Japan and we can certainly envision interest rates going up significantly in the future which would put a choke hold on our ability to borrow more or have the flexibility to fund new and important initiatives in the USA.  

 Meanwhile despite the global recession, Chinas economy grew 7.9% in Q2 2009 from a year earlier. Credit Suisse predicts China will grow 8% annually in 2009 and 9% in 2010. With this kind of sustained economic growth and demonstrated corporate performance, China may be the emerging frontier for decades to come.  China is already planning to take a larger role in the global marketplace. Economist Arthur Kroeber wrote on the China Economic Quarterly that China’s economy is poised to keep growing for at least two more decades. Ming-Jer Chen, professor of business administration at the University of Virginia’s Darden School of Business, says “the surge in Chinese foreign direct investment and takeovers is another sign they’re on track to play a larger role in the global marketplace.  The value of Chinese foreign mergers and acquisitions grew at a compound annual growth rate of 51% from 2002 and 2008. Outward foreign direct investment from China also doubled to around $20 billion in 2008 while global foreign direct investment fell by 20%.”

Not only can we see a clear plan for China to be an emerging powerhouse in the global economy from a producing nation and an investor nation but also to potentially be the stable currency of choice by the year 2030. Chinas foreign direct investments all over the globe will also provide them with a global reach for customers, investments and potential currency stabilization worldwide.

It’s also easy to envision Chinese companies dominating the Fortune global 500 within the next decade or two. There are many Chinese companies poised for entry such as Gome Electrical Appliance, one of chinas largest appliance retailers at $43 billion. Another is Ping An Insurance, china’s largest private insurer. Telecom equipment provider Huawei with $23 billion sales. Huaweii was named the world’s leading patent seeker in 2009. Others potentially in the lineup are: Minsheng Bank, Mengniu Dairy and Yili Group.

China’s comprehensive plan provides an easy path to understand the potential for their global reach and the potentially dominant position it can take in the Fortune global 500 but also have a real world impact. It’s difficult to see the USA’s path with the same passion and credibility that the Chinese proffer.