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.