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PayStream Advisors delivers unbiased, third-party market trend information, assessments of financial automation technology, and innovative ideas to business leaders in healthcare, consumer billing, finance and treasury, accounts receivable and accounts payable.

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DataRose EqX Delivers Interteroperability to Collections Outsourcing Process

Publication Length: 16 Pages
Publication Date: 10/16/2007
Publisher: PayStream Advisors

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A novel and innovative approach to data exchange is changing the costly and cumbersome transmittal of documents and information between debt forwarders and their outsource collections agencies and attorneys. Spurred into action by rising account volumes and thinner gross margins, the collections industry has invested hundreds of millions of dollars in information technology over the last 1 0 years. This investment has delivered huge returns through increased and expedited collections as well as operating cost reductions, but has failed to address the data file exchange process.

Workflow optimization through automation literally “hits the wall” when it comes to outsourcing the actual collections process. When credit grantors and debt buyers forward debt to outside collections agencies and attorneys they are plagued by the challenges and costs of “interoperability” -- having remote software systems “talk to” each other. Interoperability is hampered primarily because different software system databases utilize different file layouts and data formats. This lack of interoperability has created a drag on performance, negatively impacting the efficiency and profitability that outsourcing partnerships should provide.

Optimizing the benefits of collections outsourcing, while minimizing its costs, requires an interoperability solution that fully automates data exchange, provides debt forwarders with real-time account status, activity, and remittance updates, and enables collections performance measurement -- all with a low total cost of ownership.

Finally, such a “next generation” data exchange solution is available to the credit and collections industry. It is a universal translator that delivers seamless, programmatic data exchange between debt forwarders and their outsource collections partners. The technology optimizes workflow efficiencies and collaboration and eliminates the costs, delays, and limitations that currently constrain the potential, net benefit of collections outsourcing. This total data management solution, called EqX™ or EqualXchange™, will prove transformational as both forwarders and collectors realize higher levels of profitability and scalability. Collections Outsourcing: The Promise and the Reality.

The use of outsource collections agencies and attorneys to collect delinquent debt is both a necessity and an option that posits high potential rewards. In the collections process, as in many other industries, the outsourcing alternative promises enhanced operating leverage, risk transfer, scalability, flexibility, and the opportunity to focus on core competencies. However, the lack of interoperability among collections software systems has significantly eroded the outsourcing value proposition.

It is as if the debt collection industry built numerous private information superhighways without suitable access ramps. Thanks to ever-better collections software, data travels at light-speed on the collections enterprise’s own, internal superhighway. But collections outsourcing requires the ability to move data from one superhighway to another. Instead of high speed clover leafs, the industry must construct its own access ramps (or pay someone else to do it), or use some slow, bumpy by-pass to get from their internal highway to their various service provider’s thoroughfares.