Outsource to experts CONCERN HAS BEEN EXPRESSED by political groups and experts alike that many municipalities continue to battle debt and skills shortages, with unacceptably high municipal debt undermining service delivery.

A national business process outsourcing strategy that leverages the expertise and systems of an external service provider to supply and manage an organisation's non-core functions would go a long way in solving this dilemma.

South African municipalities are currently R28 billion in debt, a figure that the auditor general has attributed to poor financial management and a lack of proper processes. A solid credit control and debt collection policy would be the first step in helping to alleviate this situation.

Business process outsourcing providers are service-oriented, which means they are able to help customers transform their businesses by leveraging third-party expertise.

Why should municipalities attempt to set up internal credit management facilities when they can simply hand the job over to specialists? By doing so, municipalities can identify and focus on their key deliverables and their service to citizens.

Credit management and debt collection rely on strong back-office processing capabilities and expertise in bulk data management and transaction volumes, coupled with a robust call centre.

By partnering with a specialist credit management BPO provider, municipalities can form relationships with companies who have the ability to deliver. There is no substitute for having access to the right information at the right time.

BPO optimises business performance by reducing costs and increasing service quality. It helps companies to focus on their core areas and avoid unnecessary capital expenditure.

It also provides quantifiable benefits through improved efficiencies, lower overheads, and reduced payroll and benefit expenses. One of the top advantages of BPO is that it enables access to proprietary workflow systems, process reengineering skills, and innovative staffing and delivery models, coupled with world-class technology delivered by experts in their fields.

But municipalities considering outsourcing must first identify the processes core to their business and retain control of them.

About the author: Lior Woznica is financial director of VVM BPO.

Tags: Viewpoints  

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