Technology Corridor

Implementing new credit risk management standards and best practices may require an overhaul of current utility IT systems.

Information overload is a serious risk to the effectiveness of the credit management process, especially as it relates to developing IT systems to implement the recent credit risk standards developed by best practice group, the Committee of Chief Risk Officers (see the CCRO's Credit Risk Management Report, www.ccro.org [Nov. 19, 2002]).

While the CCRO's leadership should be commended for putting forth a well thought-out framework of recommendations that are timely and insightful, particularly in regard to helping address credit and contract management issues, they raise another set of issues altogether: the ability of energy companies to actually implement the recommendations using the current technical and business processes in place at many of these companies. Plainly, the implementation constraints are now likely to be examined by those considering adoption of the recommendations.