by
Scott Gerschwer
Manager
of Media Relations
Pitney
Bowes Document Messaging Technologies
There
is a tremendous benefit in treating the billing process
strategically-regardless of whether the the output medium
is electronic or paper. Companies today are looking to integrate
the various components of the messaging process to form
a closed loop, continuous dialogue with their customers,
helped by web presentment, call centers and other technologies.
Electronic bill presentment and payment offers the customer
more choice in viewing and payment options and can give
your sales and marketing organizations improved access to
account information for CRM initiatives. But EBPP technology
that does not consider the hard copy and digital document
as one holistic process creates channel conflicts, causes
service issues and needlessly duplicates processes.
For example, one of the most important justifications for
EBPP, savings on postage and paper costs, requires the ability
to selectively supress print for your EBPP customers downstream,
in a manner that allows backend reconciliation. If you are
interested in seeing a return on your investment you may
want to think twice about implementing technology from pure
play Internet companies who are not grounded in the hard
copy world and have little or no ability to create and manipulate
print streams. Print supression is not a trivial matter.
There may be dozens of different print streams created by
your legacy systems; each one needs to be decomposed and
recomposed for digital delivery, while only printing the
documents that still must be delivered on hardcopy. Technology
vendors have largely put the onus for seperating these streams
on the biller. Most will accept only those streams designated
for digital delivery with no plan for print regeneration.
A base requirement for EBPP is a robust print stream engineering
software to offer options for print supression.
Legacy systems drove documents through the mail for years.
Those well-entrenched back end systems-General Ledger, Name
and Address files, Shipping and Transaction databases, Accounts
Receivable-are highly valuable and largely impervious to
change. Companies are learning the value of extracting and
formatting data from those back end systems and connecting
that data to the enterprise front end initiatives like customer
relationship management (CRM) and enterprise resource planning
(ERP). Likewise, the data should be fed back into those
legacy databases from the customer facing initiatives to
create a closed loop system. Having highly interoperable
EBPP technology that fully leverages defacto e-business
standards, such as the Java2 Enterprise Edition (J2EE) specification
from Sun, can be used to interface with your Siebel, SAP
and PeopleSoft systems more efficiently and effectively.
The
Pitney Bowes e-Bill Consolidation Site: A Case Study
In the current economy, the emphasis for Information Technology
projects has shifted away from "business transforming" inititatives
to projects that emphasize a significant Return on Investment.
However, while consumer adoption of EBPP has been steadily
growing it hasn't yet reached 9%, which is the percentage
estimated by noted industry analysts for a return on your
investment.
The good news is that there's no reason to wait for the
consumer adoption numbers to pick up. With the right technology
and the right strategy your company can achieve tremendous
savings and break even from your investment within two years
at the current consumer adoption rate. In order to be successful,
however, you have to tie EBPP to your hard copy document
strategy and be able to turn off paper and adjust the scope
of your project to reduce your overall interaction costs-with
customers, with partners and suppliers and with your own
employees.
Take Pitney Bowes, for example. The company's CEO, Mike
Critelli, is committed to using Pitney's own technology
to improve business processes and enhance customers' experience.
The company has used its EBPP technology for a number of
internal projects that have yielded impressive cost reductions.
These include the digital delivery of bills and invoices
for postagebyphone.com and Pitney Bowes Credit Corporation.
More recently, Pitney began to electronically deliver direct
deposit pay stubs for its employees on behalf of Pitney
Bowes Accounting Services. Each project was analyzed for
results and proved to be real winners.
These results led to another, more aggressive initiative--an
online e-bill consolidation site that gives Pitney Bowes'
customers access to bills, statements and invoices across
all of the many lines of business within Pitney Bowes with
a single login and password. From a customer relationship
management perspective, the e-bill consolidation site will
improve customer satisfaction by providing a more coherent,
singular view of Pitney Bowes and will give customers better
access to their own account information.
The consolidation site will also allow Pitney Bowes to target
marketing messages and cross sell by offering relevant services
and products to Pitney customers. But like every other company,
Pitney Bowes wants to see a hard return on its investment.
By tying the EBPP project to its document strategy, Pitney
Bowes will see a reduction in interaction costs in terms
of paper, postage and telephone time for call center representatives.
A Pitney Bowes Enterprise Value Analyst, Kevin Jonsson,
developed a return on investment analysis that considers
savings in transaction costs, float benefits and reduced
call center resources.
Analyzing
the Return on Investment
Mr. Jonsson's analysis posited an average savings of 63
cents in paper and postage per transaction. In addition,
the remittance processing fees were estimated to save Pitney
Bowes $100,000 within the first year. The reduction in cycle
time created a float benefit of 20 days, although for the
purpose of analysis Mr. Jonsson assumed a more conservative
10 days. Through carefully written FAQs, online self-help
and email inquiries, billing inquiries are estimated to
be reduced by 30% at a cost of $2.50 per call.
Customer adoption rates were assumed to be 5% in year 1,
increasing steadily to 25% in year 5. This assumption is
much less aggressive than the adoption rates predicted by
many industry analysts and less aggressive than actual results
experienced by Pitney Bowes Credit Corporation and Postagebyphone.com,
two other Pitney Bowes billing entities that have been web-enabled
with the company's own Digital Document Delivery (D3) software
product.
Based on these relatively conservative assumptions and the
volume of bills involved, the savings for just one Pitney
division, Global Mailing, is estimated as follows: $70 K
in float benefit, $100 K in check processing fees, and $31
K in call center savings in year 1, ramping up in years
2 through 5 as the adoption rates steadily increase. Just
the call center savings for Pitney Bowes Credit Corporation
were calculated to be $24 K in year one increasing to $180
K in year 5, to give a few examples.
Mr Jonsson's analysis for the consolidation project estimated
a 42% return on investment based on after tax cash flow
impacts. An accounting scenario (which depreciated much
of the up-front investment costs over a period of 5 years)
was also run that resulted in an 18 month break-even period.
A more complete accounting of these results can be obtained
at www.pbdmt.com.
A white paper written by Killen and Associates several years
ago predicted virtually instant ROI when EBPP technology
is used to reduce interaction costs within large companies.
The Pitney Bowes case study illustrates that digitizing
the messaging process can dramatically impact cash flow
and return tremendous value to your business. EBPP technology
can reduce cycle time and enhance your float benefit. EBPP
technology can significantly reduce customer transaction
costs in terms of paper and postage. EBPP can connect your
enterprise projects in CRM and ERP to your back end legacy
systmes for greater value. EBPP technology can significantly
reduce costs in the customer service call center.
The industry analysts say that the consumers are beginning
to come online in greater numbers. Rather than wait for
those numbers to hit critical mass, you can use the right
EBPP technology to achieve cost reductions in your messaging
process-- and be ready for them when they arrive.
Analyst
Reports