Let's go back even further.

In 1950 there were 12 computers in the US located in the research departments of large universities.
Programming , in the 50’s was done by moving hard wires from tube array to tube array.

Because of the heat they generate, vacuum tubes burn out quickly. Computing power was expensive in
1950. Each month, the computing power generated by a computer cost the same as a 6 unit apartment
house. Today the cost of the equivalent computing power wouldn’t cover the cost of the door knob of
a 6 unit apartment house.

Now consider Moore’s Law which states that every 18 months the speed and complexity of computers
doubles. There’s also an inverse law as to the cost of computing power. Every 18 months, or so, the cost
drops by half.

Today, phone companies want to sell you power, cable TV, Internet access, cell phones, long distance and
local phone service. New tools and services like PCs, the Internet, intranets, email, fax on demand, web
sites, and cyber information clearing houses have changed how credit managers do their jobs.

Analysis, expert support and business process software allow today’s credit managers to make better
decisions, and do it faster. Cheaper, better and faster programs will continue to drive the trend toward
integrated communications and business processes.

The elimination of redundant functions and process automation will shrink the time credit people spend
on information gathering, data analysis and generating reports. Time consuming miscommunications
and errors will diminish as customer and seller computers get better at talking to each other. What Bill
Gates refers to as "Seamless Business Processes".

I don’t believe In House credit will ever disappear completely. I believe that credit will exist in the future
for the same reason it does today, "to get profitable sales that would otherwise be lost."

Third party lenders, by the very nature of their product’s value (money), see the risk and reward (profit)
formula much differently. Where an In House credit department might find a way to make a profitable
sale; a lender wouldn’t even try.

So, while technology and continued business consolidations will reduce the number of Credit people
needed, and demand that those people become more techno-savvy, the credit manager's role must be even
more focused on the people interface. Price and terms negotiations, service calls, dispute and glitch resolution,
technology acquisition and use. What's more, to survive, credit managers, will have to become profit managers.
They must learn to question how they can best contribute to the bottom line. Effectively, the credit mangers in the
future may no longer be called 'credit managers' - but the function will continue to exist, as part of the
Sales Department.

Over the years I’ve seen a number of credit managers get caught in a rut and then sure enough they
find themselves 40+ and downsized (in the sixties we called it being fired). I’ve also seen smart
Credit Managers who have found new positions and challenges outside of the Credit or Finance
Departments.

I recently got a call from a credit manager who had changed jobs. She’d gone from credit manager
at her old company to Operations V.P. at a larger company. I wasn’t surprised.

As a corporate credit manager this woman had found that every screw up ended up on her desk.
In the process of tracking down and fixing errors, disputes, glitches, she found that she interfaced
with just about every area of the business. She dealt with Sales, Operations, Accounting, Finance,
Customers, Vendors, freight companies and attorneys. She got to see what worked and what
didn’t work.

She's is the type of person who takes time to help customers and to point out possible
areas of opportunity for improvement. As a credit manager, she constantly suggested internal
changes that reduced cost, raised customer service levels, improved efficiency.
In short she was a Profit Manager. This smart woman spent time and money educating herself,
she took business and technology classes at night. She understood that opportunity knocks all
the time but that only the prepared can hear.

Her new employer? A former customer for whom she went an extra mile. Her new pay? About
twice as much as her old salary.