What's New At Credit Matters?

Welcome to our March newsletter. The focus this month is on risk management, which is so important due to the current massive changes of the business environment and in the world.

This month’s quote and blog reviews the need to revalue the way we all manage the risks of the world today, both from the negative and positive perspectives.

The conundrum this month reviews the risks of the one dimensional and positive ideology aspects presented by AI technology and its advocates.

Our inconvenient truth is that there are no secrets in the world anymore.

The Special Topic is, can your business downsize to greatness, and what are the risks if it cannot be completed?

There are two Brochures attached with this newsletter and are targeting the theme of this newsletter. The first brochure is from Stopline and asks the question, DOES YOUR BUSINESS NEED A WHISTLEBLOWER HOTLINE SERVICE? The second brochure is from Peter Nash at Absolute Facts on WHAT IS BUGGING YOU?

Kim is available to help with your questions and concerns if you need any assistance, and as always, the first chat is always free of charge or obligation.

Quote Of The Month

“Risk is moving fast, and the old, siloed approach to managing enterprise risks, operational risks, IT risks, business continuity, vendor risks, and compliance just isn’t cutting it anymore. It’s time to rethink your strategy.”

Advertising blurb for “New webinar: Join Michael Rasmussen Jan. 29^th to design your 2025 GRC playbook.” The link reference at Global Risk Community is: mail@globalriskcommunity.com

Monthly Business Observation

We now operate in world where there is an increasing focus on the upfront cost of inputs when operating a business, rather than possible negative downstream costs. It seems therefore that upfront cheaper costs are more important than on the quality of the inputs required to operate successfully. As a result, we often see businesses lose focus on what is really important, which is, “… completing business transactions that lead to more profits.”

In stating the above, we must also be aware of the importance on reducing unnecessary costs and working more efficiently as finding less costly inputs is also a necessary function of business. When focusing on saving costs is a major theme, when making changes you often then minimise the risk of unintended consequences which then interferes with completing profitable business activities.

Whatever factors we believe can reduce our costs and make our business more efficient and profitable the process must be properly thought through and due diligence completed. Otherwise, as we all continue to read about it, or suffer the negative consequences, there are always risks.

In regard to IT, including AI, as Captain Solly’s statement constantly reminds us:

“We can eliminate human error by automating everything. We’ve learned that automation does not eliminate errors. Rather, it changes the nature of the errors that are made, and it makes possible new kinds of errors.”

Too often a business celebrates saving a few dollars upfront by using technology. However, if the technology is used poorly and for the wrong reasons, you may fail to understand the downstream costs. It is also essential when employing IT inappropriately, you may be:

1. alienating customers,
2. losing sales,
3. losing your business’s point of difference over your competitors,
4. destroying your previous good reputation for customer service,
5. losing your business’s IP and accumulated knowledge to a competitor, etc.

In regard to vendor risks and compliance, a lack of due diligence processes often occurs because management does not believe these costs add value, and unforeseen problems result.

In regard to compliance and a lack of due diligence, one example is covered in the “ALEX” cartoons of AFR’s Street Talk sections of the 27^th of February 2025, plus the 3^rd and 5^th of March 2025.We also know that not every supplier of services which are outsourced by a business operate ethically, of good character, or are financially sound, etc. Even when these characteristics are apparent, many businesses continue to use these vendors. As an example, a number of businesses which had outsourced their call centres overseas, are now rebuilding them in their original country of origin. One of the main reasons for this was because the overseas vendor’s employees language sounded different and alienated customers and suppliers.

In another prime example, my acquaintances have often advised me the vendor’s employees skill sets are not always on par with Australian standards. This means work often has to be repeated or completed back inhouse.

In addition, it is not unknown for criminals to haunt businesses surrounding the third-party vendors in overseas countries searching for disgruntled employees. Many of these employees which succumb to temptation, then sell information because the money received is often far superior to what is earned legitimately.

The world around us is becoming increasing volatile, fragile and uncertain. The reality is that basics of a successful business have never changed. It is wise therefore to ensure that when using technology products, vendors and adhering to compliance regulations, you don’t just think of the upfront benefits. You are also aware of, and identify all the risks, because it is a lack of risk awareness and its costs which are the problem these days.

This Month's Business Inconvenient Truth

Trying to keep a secret is increasingly difficult. We only have to note the stories in the papers, TV, on social media, or via the courts, or credit reference and trade associations to realise this fact.

If you or your business commit any sort of perceived transgression of a social norm, a non-payment of debt(s), poor customer service or inefficient sales delivery or quality of product, the world soon knows. Furthermore, your past consumer, personal or business history is always made available from these sources, or by an aggrieved person or employee with a grudge to bear.

It should be obvious therefore that you should always aim to be honest and be wary of actions that could bring your reputation or behaviour into disrepute. The three main reasons for this attitude are that:

1. quality oriented customers that hate mistakes are more likely to do business with you when there are no, or very few mistakes,
2. reputationally oriented customers will be more willing to do business with you; and
3. we all make mistakes at some time, and your stakeholders will be more likely to forgive these mistakes and continue to do business with you, especially if you apologise quickly and rectify the mistake.

The truth, secrets exposed often kill reputations, friendships and business opportunities when found out. It is incumbent on you therefore to try and eliminate any reason to keep a secret.