There is little question that bill presentment and statement
systems are coming under increasing scrutiny as business
enterprises strive to take full advantage of the rapid growth
of the Internet and implement new modes of digital distribution.
But
the real promise of Electronic Bill Presentment and Payment
(EBPP) and Electronic Statement Presentment (ESP) is not
just in implementing additional channels of digital distribution,
even though those channels may offer substantial benefits
in the form of faster and lower cost delivery.
The
real benefit comes from the ability to use the electronic
bill or statement as an interactive gateway to the customer
to help strengthen and expand the business relationship.
And when the electronic statement is implemented as part
of a well-conceived e-commerce strategy, it can also help
improve internal processes, boost enterprise-wide operating
efficiency, and improve the bottom line of the organization.
The
best way to achieve these impressive benefits is via a hybrid
billing and statement system that protects the existing
and substantial investment in paper-based processing while
enabling the full exploitation of the new technologies of
electronic billing -- and the newer and more robust forms
of customer relationships they can engender.
Hybrid
is more than just new distribution
The
predominant form of billing and statement presentment today
is hard copy or paper-based with delivery via the USPS.
That process is overwhelmingly accepted and successful and
is not going away, at least anytime soon.
Despite
the projections of rapid growth for digital delivery - the
Forrester Group forecasts Internet billing will reach 13
percent penetration by 2004, and Killen Associates predicts
Internet billing may soar to 30 percent by 2008 -- the use
of paper and the need to drive billing applications through
high speed laser printers and inserting systems will remain
a fact of life for the foreseeable future.
The
USPS is also continuing to invest in automated handling,
more efficient distribution and promising new piece-tracking
technologies, which will increase speed and assure delivery
of traditional mail over the near term and aid in continuing
to make the USPS an effective delivery choice.
Still,
the rate of adoption for Internet billing and statement
presentment is growing and billers cannot ignore the migration
to the Internet any more than they can ignore any trend
that impacts a sizable portion of their customer base.
At
a minimum, billers should assure themselves that their overall
capital investment in print/mail finishing capabilities
is balanced with the forthcoming migration to digital delivery.
Investing in hardware and software that does not consider
the migration could make it extremely difficult to serve
and retain 10 to 30 percent of customers in just a few years.
But
even more important is the need to understand how to exploit
the inherent advantages of electronic billing and to use
the e-bill as a strategic tool to achieve more effective
communications with customers.
A
single internal process
The
first step is to recognize that any digital billing or statement
system should be considered a natural extension of the existing
hard copy process. Why? Because the documents are still
extensions of the same applications, and processes for accounts
receivable, marketing, customer support, archiving, and
control purposes.
Adding
a new digital delivery system that does not integrate well
with existing paper-based processes simply adds unnecessary
complexity by creating two separate delivery systems that
must be managed and reconciled where before there was only
one.
Viewed
from an internal perspective, it is easy to see that the
two delivery systems have the same origins. If a company
is processing 100,000 paper-based accounts today, and tomorrow
10,000 of those accounts shift to delivery via the Internet,
all 100,000 accounts must still be accounted for from an
audit and control perspective, and the funds must still
be handled by accounts receivable.
If
billers choose an e-bill technology that cannot drive the
A/R posting back to the A/R department in the same format
that the current hard copy lock box system does, two separate
processes for reconciling accounts will be required.
If
billers cannot provide a single one-to-one marketing campaign
tool to collect and manage the data about what was sent
to customers in both hard copy and digital form, then two
separate reporting processes will emerge.
Multiple
channels of delivery
In
particular, one of the real challenges in Internet billing
stems from the fact that the e-bill can reach consumers
in a variety of competing channels. Since consumers can
decide which channel to utilize to access the bill, the
"biller" may not even be the entity, which presents the
"bill." Consumer service providers, bill consolidators and
banks are all anxious to provide the new EBPP service, either
to generate fee income or to increase their hold on the
"eyeballs" of consumers.
And
aside from the competition over delivery choices, which
will only increase in the future, most of these services
want summary billing data only. So billers are faced with
an added burden. They must find a simple way to extract,
format and present billing data two ways -- in detailed
fashion to meet the needs of consumers, and in summary form
to meet the needs of the service providers. Plus, there
is little uniformity among bill consolidators and ESPs.
A
significant number already utilize a range of formats, so
a biller may have to deal with multiple vendors operating
under different technological requirements. Establishing
a relationship with a single billing and statement service
provider that can offer a flexible gateway from hard copy
processes to the new channels of electronic distribution
-- such fax, e-mail and the Internet -- can only yield tremendous
savings in both efficiency and coordination.
But
don't stop there. Other billing and statement presentment
options are just now evolving and may soon encompass wireless
technology -- and devices such as pagers, cell phones and
RFPCs -- which offer consumers unparalleled freedom to receive
information or give authorization to make payments from
virtually anywhere at anytime.
The
issue is not the adequacy of the technology. The technology
exists to enable Internet billing. The key is whether organizations
recognize the importance of customer communications and
especially how the electronic presentment of billing data
can foster stronger customer relationships and help energize
the business.
Web-based
presentment offers nothing less than immense opportunities
for custom-tailoring messages to individual preferences,
facilitating the receipt of payment, and streamlining internal
business processes for better operating efficiency. Seen
from this perspective, the e-bill becomes a fundamental
building block in an enterprise-wide e-commerce strategy
and a regular and recurring interactive gateway which customers
can use to access the full array of goods and services provided
by the enterprise.
Because
each e-bill transaction is already in electronic form, capturing,
analyzing and reusing the data is automatic. There is no
need to re-key or re-enter data, or manually coordinate
the various entities of production. Once an order is placed
and verified, the response -- whether it involves shipping
from inventory or initiating a custom design or triggering
a manufacturing process -- can be automatic and accomplished
without any further manual intervention.
Ideally,
each e-bill "gateway" triggers a subsequent transaction,
which both yields more "information" about the needs of
the customer and enables the biller to provide an automatic
response, since the data is already in electronic form.
And while it may take some time for any organization to
implement a true enterprise-wide e-commerce strategy, hybrid
billing and statement systems are a key first step and can
yield important benefits in the short term.
But
at a minimum, e-billing has already been shown to reduce
the number of costly and time-consuming calls to customer
service call centers. In many instances, customers are able
to access the needed data themselves and resolve their questions
quickly. In other instances, the inquiry can be submitted
via e-mail and answered at a later time without involving
a "live" representative in a "real-time" telephone conversion.
Since many organizations budget the cost of handling and
resolving a customer inquiry at about $50 per call, any
reduction in unnecessary call volumes can immediately impact
the bottom line.
Analyst
Reports