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.

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