Saturday, December 27, 2008

What's Hot in e-Commerce

By Mark Brousseau

Will mobile commerce take over in 2009? Will consumers continue to browse online and shop offline … or will it be the other way around? What new uses for social networking sites will retailers find in the New Year? Guidance offers its thoughts on the hottest new trends for online retail and technology.

... Mobile will NOT be the killer app for eCommerce -- at least not as a shopping channel in and of itself. But it will become hugely useful as a companion to both online and offline shopping.

... Commerce will become even more collaborative. Social commerce enables interaction among shoppers in a variety of forms, while collaborative commerce takes it to the next level by enabling “the group” to purchase together, or have a say in product development.

... Corporations will “become” social. Larger companies will bring social networking in-house.

What do you think? Post your comment below.

Economy Drives Shared Services

By Mark Brousseau

It has been a truly remarkable 2008 - for the world in general and for the shared services and outsourcing space in particular.

Sarah Clayton, head of strategy for Shared Services Online Network (SSON), comments: “With many organizations focused almost exclusively on the bottom line, a wave of discretionary projects are now well and truly on the back burner for 2009 as SSOs are compelled to do more – and better – with less. Meanwhile, areas such as working capital and supply chain management move into the spotlight as parent organizations struggle to cope with the most uncertain economic times for many decades.”

Jamie Liddell, SSON’s Online Editor, believes: “Next year more than ever, agility, efficiency and flexibility will be crucial to the survival of even the very biggest organizations. Great emphasis will be placed on solidifying core activities and cutting back on what might now be seen as unnecessary luxuries – which of course throws up plenty of opportunities for acquisitive-minded firms with healthy war chests. We’ve already seen the beginning of what may prove to be a deluge of hitherto captive centers being sold to major providers – who will also be looking to snap up a few of their less well-capitalized competitors.”

What do you think? Post your comment below.

2009 Promises Major Changes

By Mark Brousseau

2009 will bring significant changes to content technology marketplaces, according to independent technology evaluation company, CMS Watch (

“Obviously the economic slump will continue to influence buyers and vendors,” observes CMS Watch founder Tony Byrne, “but other technology developments – including the rise of mobile analytics and a new version of MS SharePoint – will also significantly affect enterprise calculations.”

CMS Watch offers twelve predictions:

1. Open source Enterprise Content Management (ECM) players get an initial boost
2. Office14 casts long shadow on SharePoint
3. "Taxonomies are dead. Long live meta data!"
4. Regulatory-compliance concerns reignited
5. Renewed interest in pro-active e-discovery
6. SaaS vendors expand offerings
7. Oracle falls behind in battle for knowledge workers
8. New emphasis on application search
9. Social computing diffuses into the Enterprise
10. Mobile and multimedia web analytics become key requirements, disrupters
11. Long-awaited consolidation comes to the WCM space
12. Buyers remain in driver’s seat

CMS Watch principal, Theresa Regli, adds, “The last two predictions are somewhat related – we’re counseling buyers to negotiate aggressively, and some vendors will endure eroding cash flows better than others.”

What do you think? Post your comment below.

Sunday, December 21, 2008

2009: A Year of Risk and Reward

By Mark Brousseau

There can be no question that 2008 has been a horrific year for business. Yet as bad as this year has been, 2009 is shaping up to be a year of both risk and reward for many forward thinking companies.

That’s according to Rob Haberman (, senior product manager for Purepay Receivables Automation. Haberman notes that governments worldwide are pouring money into their economies, to kick-start recovery. Savvy companies will be shoring up their balance sheets and preparing for the inevitable upturn, he says.

Haberman shared a few thoughts on some of the process opportunities we will see in 2009.

Manage Your Costs and Your Customers’ Costs

Leveraging technology to reduce costs will be a major issue in 2009, Haberman says. Stripping waste out of your balance sheet and your customer’s balance sheet will be a key element for survival. One example is the use of remote deposit and capture.

With this, customers use small low-cost scanners to balance and transmit invoice coupons and cheques to your in-house remittance system, Haberman notes. Your customers reduce the need to manage and transport paper checks. On the other hand, you have the ability to scale your operations to meet demand variances, without major expense or disruptions. There is also the possibility for per-transaction revenue. Equally important, since transport and processing time is reduced, funds are available far sooner, Haberman explains.

Waving the Red Flag – Stopping Fraud

Fraud through identity theft has become a major issue and resource drain for many companies in 2008. In November of 2008, the US Government enacted a series of regulations, referred to as the “Red Flag Rules”. In May 2009, these rules will be fully enforced by the FTC, as well as federal and state financial regulators. These regulations are designed to make financial institutions and creditors more accountable, in protecting their customers against identity theft.

In the least, these rules are complex, requiring a wide range of companies to have written identity theft prevention programs. The penalties for not complying are considerable and avoidable, Haberman says. While there is no substitute for a fully developed program, creative use of existing remittance automation technologies can be valuable first line of defence.

As an example, hot file systems can be set up to flag suspicious names and addresses, for further investigation. Implementing this is a cost effective way to filter out fraudsters, while avoiding a corresponding growth in personnel, Haberman says.

Reworking Workflows

For remittance processors, workflow is everything. In too many cases, remittance automation systems have been added on to the current workflow, without consideration as to how to best leverage this technology. When the economy was strong, this was not an important issue, Haberman notes. However, in 2009, Haberman expects to see a revolution in work process.

Companies will be taking a long hard, look at how checks and invoices are handled and whether the old workflows are making the best use of current technology. We anticipate that many processors with find considerable savings by making common sense revisions to their environments.

In some cases this may require a simple tweak, in other cases an investment in new technology may be in order, Haberman concludes.

There is an old saw that states “In chaos, there is opportunity”. There is no question that 2009 will be a chaotic year, Haberman admits. However, we believe that sometime next year a corner will be turned and the recovery will begin. Those who have prepared for this recovery will reap rewards for years to come, he says.

What do you think? Post your comments below.

Friday, December 19, 2008

Stopping Information Overload

By Mark Brousseau

Should I disconnect the cell phone? Boycott voice mail? Throw the PDA out the window? As a chaotic 2008 comes to a close and workers resolve to regain sanity in 2009, Xerox Corporation is offering nine tips to help save time and manage information overload.

Breathe. It may sound simple, but not enough people take the time to do it. So schedule breaks into your daily working routine. It helps productivity - even stepping away from your desk for a moment. Even a quick nap helps you regenerate and be more productive. Research supports this, we swear.

Simplify Your Schedule. Try scheduling all of your meetings on specific days so you have more time on non-meeting days to process information coming in - it's much easier to focus when you don't have a meeting looming in 20 minutes.

Back It Up. No information is worse than too much. Make sure you have a solution in place for regular back-up.

De-clutter Your Desktop (both of them). File, pile or toss papers as soon as you receive them. Scan and save important documents to reduce desktop clutter instead of filing. On your computer, consider getting rid of folders altogether and using desktop search engines to find things when you need them.

Touch it Once. Often we waste time dealing with the same piece of information again and again. Respond as soon as you receive it, put it in its file or delete it/shred it the first time you touch it.

Forget the Free Stuff. It comes at a price (e-mail garbage and unsolicited offers). Choose quality over quantity. Manage your bills and accounts online and sign up for the do not call lists and the no junk mail lists.

Use Your Tools. Make use of your phone for getting the right info at the right time. For instance, you don't have to waste time printing maps if you can access them from your phone. GPS phones have the smarts to give you the right information based on your actual location.

RSS Reprieve. Sign up for an aggregator. It helps you see all your news in one place.

Manage Mobile Madness. Use a mobile device with e-mail support to make hours way from your desk more productive. Keeping track of e-mail throughout the day can help you anticipate future work, and take care of mini-projects as they arise instead of waiting until later to sift through a huge pile of e-mail.

"Tackling information overload is important for most global businesses today, tomorrow and five years from now," said Jenny Perotti, ethnographer in the Xerox Innovation Group.

Tuesday, December 9, 2008

Getting the Point!

By Mark Brousseau

More organizations are leveraging Microsoft SharePoint as a common presentation layer for delivering information from disparate enterprise content systems in a highly contextual way.

“Your content and collaboration strategy needs to take into consideration the role of multiple systems serving different needs, but with a strategic vision,” Rob Koplowitz, principal analyst, Forrester Research, Inc. (, said today during an Information Week WebCast sponsored by ASG Software Solutions.

“Companies see SharePoint as a layer for shared access across systems,” Koplowitz said. “Not only for pulling information from systems, but for presenting the information in a common way. Lots of people are doing lots of interesting things with SharePoint.”

That’s for sure. SharePoint has now surpassed 100 million licenses worldwide, representing more than 17,000 customers with over $1 billion in revenues. What’s more, Microsoft now counts over 3,300 companies as SharePoint partners. “SharePoint is a game-changing platform for Microsoft,” said Adam Morgan, portal, collaboration and search specialist with Microsoft (

And SharePoint should continue to move very fast. According to the results of a Forrester survey presented by Koplowitz, 24 percent of organizations said they are ‘immediately’ implementing or upgrading to Microsoft Office SharePoint Server. An additional 41 percent of respondents said they will be implementing or upgrading to the platform within six months, and 22 percent said they would be doing so within the next 12 months. Only 7 percent of organizations responding said they have no plans to use the SharePoint platform.

Underlying this demand for Microsoft SharePoint is a renewed interest in enterprise collaboration and document management, Koplowitz said. “Collaboration and content management are becoming increasingly intertwined,” Koplowitz explained. “A new layer of infrastructure is being developed to access and manage content across multiple systems and processes. Users want simplified access or they won’t participate.”

This is the role Microsoft SharePoint is filling, Koplowitz said.

As evidence of the move toward collaboration and content management, Koplowitz shared the results of a Forrester survey showing that 50 percent of organizations said that implementing enterprise collaboration strategies would be among their major technology initiatives for the next 12 months. Thirty-four percent of respondents said it was a priority and 15 percent of respondents said it was a ‘critical priority.’

What’s more, Koplowitz provided the results of another survey revealing that nearly 75 percent organizations will invest in document management solutions in 2008 – topping content and e-mail archiving (66 percent), document imaging (64 percent), Web content management (62 percent), and enterprise content management (60 percent).

What is your organization’s view of Microsoft SharePoint? Post your comment below.

Monday, December 8, 2008

Still Growing Strong

By Mark Brousseau

How can your company continue to grow steadily, even in a tough market? Run your business like there is always an economic downturn. That’s according to Tom Haley, CEO of Agilaire, a printing and packaging solutions company which has grown 84 percent since 2005 and attracted clients such as Sony, eBay, Informed, SAP and The Gap. Here are some additional pieces of the growth equation offered by Agilaire:

• Own It – If there is a business problem, regardless of who created it, it is yours and you own it, not your client. "There is no better way to build client and employee loyalty than taking ownership of difficult problem," Agilaire says.

• Add Some Antifreeze – Don’t freeze through business downturns. Stay visible and show your clients and employees that you care about them. "Our clients, employees and suppliers are family. So this holiday season we are giving them a gift of safety, a 72 hour emergency Agilaire CARE Preparedness Kit that we put together with top specialists from Lockheed Martin," Agilaire says.

• Hire Slowly and Fire Quickly – It is difficult to hold back the urge to hire during rapid growth cycles. "However, it is during this time that you test the limits of your star employees and weed out the nonperformers," explains Agilaire.

• Find Your Secret Sauce – What makes your company unique? It’s there; you just have to dig deep. "Agilaire was founded to be the client’s advocate and level the playing field. That is our secret sauce," the company CEO says.

• Walk the Walk – Don’t recommend products or programs that you yourself would not use. "We save our clients money through outsourcing to the best of the best. So, we walk the walk and outsource too! Montpac in Hawaii does our accounting and our IT department is Endsight in Emeryville. This has reduced overhead by 30 percent, vastly improving our margins," Agilaire says.

What do you think? Post your comments below.

Thursday, December 4, 2008

No Time for Inaction

By Mark Brousseau

While it’s vital to carefully manage investments, it’s an important time not to “hunker down.” That’s a key message that IDC will deliver this morning during a Webinar on the firm’s predictions for 2009. IDC says that while the recession is slowing down the entire market, it is accelerating the transformation of the IT industry.

IDC believes the disruptive vectors of the market will be among the highest-growth sectors in 2009, as their advantages are magnified in a down economy. Suppliers who slow-down their transformation will limit long-term viability and miss near-term growth, IDC predicts.

For instance, growth of cloud computing will slow in 2009, IDC says, but still expand its growth edge over traditional offerings. Additionally, online commerce, while experiencing slower growth, will break the $8 trillion mark, and take more market share from traditional commerce. The number of people online next year will exceed 1.5 billion – about ¼ of the entire population of the planet – IDC predicts.

What do you think? Post your comment below.

Tuesday, November 25, 2008

Green Information Management

By Mark Brousseau

Reduce, reuse, recycle is the green mantra that gained a lot of currency in the 1980s. Today, a large number of enterprises are aggressively pursuing 3R policies, covering everything from paper usage and disposal practices to energy usage and water consumption.

As Green IT moves from the notion of a paperless office into a mainstream corporate social responsibility, CIOs are now also identifying ways in which to minimize the corporate carbon footprint and at the same time achieve their strategic business objectives.

Stuart Butts, a founding member and director of Xenos Group, Inc., says there is, however, one other area that demands equal consideration by organizations: managing structured and unstructured data and documents. Very often enterprises will hold the same information in a variety of different electronic formats and in different physical locations to meet different requirements, Butts notes. Multiple silos of information in technologically incompatible systems mean that information cannot be shared in real time. In addition, this approach consumes inordinate amounts of storage space and the associated costs that go with that.

With the explosive growth in data and documents, Butts says the time has come to apply reduce, reuse and recycle thinking to electronic business information. Embracing a more strategic, ‘green’ approach to information management will deliver a number of benefits, not the least of which is a dramatic reduction in the cost and complexity of power-consuming storage requirements, he believes.

Butts says there are a number of specific offerings that can help to reduce storage demands by eliminating redundancy and simplifying access to business critical information in real time. These include archiving, content migration and consolidation tools that enable real-time, on-demand transformation of customer statements and other key documents contained in electronic print files to PDFs for ePresentment.

By eliminating the constraints imposed by incompatible hardware or software platforms and disparate data and document archives, Xenos has helped organizations to reduce, reuse and recycle their data and documents to lower costs and improve information flow, Butts notes.

On-demand transformation to PDF format allows organizations to eliminate the unnecessary storage of large, graphically rich files, while streamlining version control with a technique known as “document resource optimization”. For some, this approach has effectively reduced storage requirements by as much as 90 percent, Butts says. Given that many large enterprises are spending as much as 70 percent of their IT budgets on their storage infrastructures, it’s time to apply reduce, reuse, and recycle thinking to data and storage needs, he adds.

Monday, November 24, 2008

Today's Document Challenges

By Mark Brousseau

Today’s document capture and enterprise content management (ECM) users are challenged by increasing costs to manage critical business content, says Craig Laue (, Eastern Regional Manager for ABBYY USA. The key culprits are the growing amounts of business information across organizations, and the tighter regulatory compliance standards, Laue told attendees at TAWPI’s Capture Conference in Florida last week.

Complicating matters, Laue noted, is that the content management systems installed at most organizations are unable to resolve key business problems: easy access to information for all employees, improved customer satisfaction, and mechanisms for disaster recovery.

To confront these challenges, Laue says more end-users are looking for solutions that provide:

… indexes through document capture
… full-text document search and indexing
… improved access to information
… information sharing capabilities
… fewer duplicate processes

By leveraging advanced document capture and ECM technologies, users can achieve a range a benefits, Laue said, including: increased productivity, lower cost per department/project, faster search capabilities, accurate data/database usage, audit tracking, and enhanced customer service and vendor relations. What’s more, users can avoid the side effects of manual data entry – longer processing times, high costs, more errors, and repetitive and duplicate processes.

What are you seeing in the market? Post your comment below.

Wednesday, November 19, 2008

Equifax Goes For The (Digital) Wallet

Posted by Mark Brousseau

Equifax offers I-Card for the ‘digital wallet’
Bloomberg News

Friday, November 14, 2008

Equifax Inc., the provider of consumer-credit information, unveiled an online information card aimed at encouraging businesses to support a “digital wallet” identification system to protect against fraud.

The information card, or I-Card, is an Internet equivalent of a driver’s license or passport, Atlanta-based Equifax said. Customers with the Equifax I-Card can install software called digital wallet that enables one-click sign-in via a personal computer, said Steven Ely, president of Equifax Personal Information Solutions.

“I-Cards are really the next generation of Web tools that allow users to use a single sign-on approach so they can use one card at multiple Web sites,” Ely said in an interview. “We expect the marketplace to completely shift away from user IDs and passwords to the use of I-Cards.”

Consumers won’t be charged for the cards, Ely said. Revenue will come from the sale of technology to businesses, which will verify identities and help customers complete online forms, he said.

About 8.1 million people in the United States were victimized by identity theft in 2007, Equifax said, citing Javelin Strategy & Research. The average loss was $5,574. Losses from online fraud rose 21 percent to $239.1 million in 2007, the FBI said, citing the Internet Crime Complaint Center.

Managing identification data for individuals and businesses generates “dozens of millions of dollars” for Equifax and revenue could “substantially” increase in coming years, Ely said.

“We have made a strategic decision to invest in developing products to significantly grow our footprint in the identity management space,” Ely said.

What do you think of the digital wallet? Post your comments below.

Alternative Payments Going Strong

Posted by Mark Brousseau

Online buyers turn to alternative payments

An interesting item from the Pacific Business News:

A growing number of online shoppers are turning away from traditional credit and debit cards and moving toward cash-based alternative payment options, according to a retail forecast survey released this week by Javelin Strategy & Research.

Alternative payments — such as PayPal, Google Checkout, Nacha SVP and Revolution Money — will become preferred choices for online consumers and will continue to grow over the next five years, increasing to one-third of online retail transaction volume by 2013, the survey said.

This year, alternative payments will reach $148 billion and rise to $268 billion by 2013.

The growth will be strong for companies that build brand awareness, said the survey.

As the trend grows, the survey urges banks and traditional card brands to expand their own prepaid card products and partner with alternative providers.

This holiday season, alternative payments will comprise $7.8 billion in purchases compared to $35 billion in traditional online payment methods.

What do you think? Post your comment below.

Sunday, November 9, 2008

Supersizing Your Business

By Mark Brousseau

Customers are a company’s most important asset, says Adam Osthed, president and CEO of metasource. And in challenging economic times, Osthed says companies can leverage their customer relationships to “supersize” their business – in other words, generate more revenue per transaction or customer relationship.

Osthed spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.

“During a downturn in the economy, a frequently overlooked way of making more money is increasing the value-size of your customers,” Osthed says. “Supersizing is a model of specific inter-related activities through which a company can create a competitive advantage – a chain of value creating, or value-added, activities.”

The secret to supersizing a business, Osthed says, is to understand its role in the value system: who are its customers, what do they need, and why should they buy from your company. To help your company understand its role, Osthed suggests using needs audits, process mapping, and quarterly business reviews. “Figure out what your customer wants,” Osthed says. “Instead of trying to get them to fall in love with your solution, figure out what they are trying to build, and tailor a solution to these needs.”

Once your company understands its role, there are two ways that it can grow its revenues from the value system: expand its reach to new levels in the value system (vertical integration), or expand its activities within existing levels of the value system (horizontal integration).

Vertical integration, Osthed says, is the degree to which a firm owns its upstream suppliers and its downstream suppliers. Meantime, horizontal integration is the acquisition of additional business activities at the same level of the value chain (selling to the same decision-makers). While each of these approaches may appear straightforward, Osthed warns that the benefits of scale and scope are often easier said than done. Moreover, the benefits are not spontaneous; they require a commitment from the top of a company. “And you have to be careful that you don’t more too far from your company’s core competencies,” he adds.

Have you tried supersizing your business? Post your comment below.

Saturday, November 8, 2008

First Impressions Pay Off

By Mark Brousseau

For services and solutions providers, making a positive first impression is important, says Scott Swidersky (, vice president, Information Systems Division, of Quality Associates, Inc. (QAI), a 300-employee, Fulton, MD-based provider of systems integration and outsourced services. And Swidersky has the sales results to prove it. After investing in a multi-story, 120,000-square-foot corporate facility two years ago, QAI’s revenues will grow 30 percent this year – in large part from the impact of bringing prospects to the company’s swanky facility.

Swidersky spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.

“It’s always difficult finding sales opportunities. And it’s difficult working these opportunities through the sales cycle. But it’s even more difficult to close sales opportunities. With this in mind, we started investing in our corporate facilities to distinguish ourselves from our competitors,” Swidersky says.

“Part of our sales strategy is trying to distinguish ourselves as an organization. We have a lot of competitors in the Washington D.C. area, and some of them are huge systems integrators – Lockheed Martin, EDS, and CSC," Swidersky explains. "We find that the positive impression our facility leaves on prospects is the single largest distinguishing factor in our sales cycle.”

In addition to helping QAI attract new clients, the facility also boosted employee morale. “And it helps in our ability to attract quality people as it shows that we are providing a career, not just a job,” he says.

QAI’s modern facility includes a learning center, where vendors can demonstrate new solutions and QAI can conduct client training; dedicated work spaces for client projects; and a lab that provides testing and product demonstration space for employees and clients alike. Since moving into the new space, QAI hosts periodic educational events for clients in its offices – providing education for the clients, while strengthening the relationship between QAI staff and the company’s customers.

“We are always inviting prospects and clients back to our offices,” Swidersky notes. “This demonstrates confidence. And confidence is a big part of the sales cycle.”

“We are proud of our facility, and it shows,” Swidersky says.

How has your organization invested in its facilities? Post your comment below.

Service Bureaus Tout Labor Savings

By Mark Brousseau

In light of the weakening economy, service bureaus need to change their sales message to emphasize their ability to reduce a company’s headcount and help them avoid capital expenditures, says Mario G. Duckett, CDIA (, senior director, business development, for Bristol, PA-based metasource.

Duckett spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.

“Down markets are great for soft dollars and Software as a Service (SaaS) is an excellent way for someone who has had their capital budget way taken away to still solve their business problems,” says Duckett. “In this economic environment, a company that can’t afford a $100,000 capital expenditure will be interested in a $2,000 a month fee for SaaS. The key is to stress labor savings.”

What do you think? Post your comments below.

Texas-Sized Data Center Problem

Posted by Mark Brousseau

IBM Corp. has been given a month to fix service problems with a mammoth Texas state data center project or possibly have its $863 million contract terminated, according to an article in Friday's Austin American-Statesman.

The state notified IBM this week that the company has "breached its contractual duties and obligations to the State of Texas" and outlines specific issues with IBM's work.

"The current, unremediated situation is untenable for the State of Texas, as critical state data continues to be at risk," according to the notice written by Brian Rawson, executive director of the Department of Information Resources.

The Statesman says the most persistent problem involves the company's failure to back up data stored on agencies' servers as it consolidates 27 state agencies' data centers into two facilities in Austin and San Angelo. The objective is to streamline and modernize the agencies' technology operations while saving money.

But the company has been repeatedly warned by the state that it had fallen short on requirements in the contract and has been penalized $5.2 million, including almost $902,000 for the data backup problems. The company so far has been paid $175 million under the contract.

The notice, released Thursday, is the first required step to terminate the contract.

It is a serious move by the state, following Gov. Rick Perry's directive two weeks ago to stop work on the contract while a plan to fix the problems was developed. That plan is expected to be completed by Nov. 17.

"The governor expects the issue will be resolved to the full satisfaction of the state," said Allison Castle, the governor's spokeswoman, so that termination of the contract will not be necessary.

IBM spokesman Jeff Tieszen said the company has been working to address the data backup and recovery issues, and would respond accordingly to the state's letter.

"The state's data center infrastructure is more stable and secure now and we plan to work with (the Department of Information Resources) to continue to improve the system to better serve the state's citizens," Tieszen said in a statement.

Rawson wrote in a letter to Perry that he expects "IBM to have restored the confidence of the state leadership and the agencies upon implementation" of the governor's plan.

But Rawson said that the state must be prepared if the results are not satisfactory and said a contingency plan is being developed to ensure data center services without IBM.

IBM assumed responsibility for servers and mainframes at 1,300 locations across the state in April 2007 as it moves the work to the centralized facilities.

It must provide security, backup and disaster recovery at all of those locations. That is where many of the problems have developed.

This summer, the attorney general's office lost a significant amount of data in a server crash at its Medicaid fraud division in Tyler. IBM had failed to back up the data, as required by the contract.

Eight months of data files from the office's fraud investigations were initially lost because the office had stopped using its previous file backup software in November. Ninety percent of the data has since been recovered, but it is unclear whether all of that data is usable.

Service in the Sky

Posted by Mark Brousseau

Below is a link to an interesting article in the November 10 issue of Newsweek about cloud computing.

What is your organization's approach to cloud computing? Post your comments below.

IT Spending Getting Squeezed

Posted by Mark Brousseau

An article in yesterday's Austin American-Statesman says the fourth quarter could be even more disappointing than technology vendors already had expected. Businesses are cutting back spending by putting off equipment purchases and upgrades and laying off workers. Even software, considered a safer bet because it helps companies automate costly steps, is also likely to take a hit, the Statesman noted.

"It's inevitable that all technology companies, with varying degrees, will be running into the same thing," Stephen Minton, an analyst for research firm IDC, told the newspaper. "The reaction of businesses to the economic crisis is to stop spending money."

Technology makes up a big chunk of corporate spending. Of the total amount of money that U.S. businesses spend on fixed investments, which includes offices and factories, about 28 percent goes to computer and communications equipment and software, according to Commerce Department data analyzed by Bartels.

IDC expects very little growth in overall tech spending for the rest of the year and through most of 2009. Spending in the U.S. and Europe probably will be roughly flat, while emerging markets should continue to grow.

"One thing we learned in 2001, a lot of people in software said the recession won't have an effect," Minton told the newspaper. They were wrong. "What businesses do when a recession starts is they stop spending altogether."

The bright spots in the sector: Information-technology services and outsourcing — helping companies manage their computing — tend to be the least affected in a downturn, he added.

It is clear that a recession will hurt the tech sector, but things don't figure to be as bad as they were during the dot-com bust, which helped spark the last recession. This time around, there is no tech bubble to burst. So although corporate customers are temporarily putting projects on hold and delaying upgrades to weather the economic storm, Minton said that overall, "businesses are still optimistic about technology."

What do you think? Post your comments below.

Friday, November 7, 2008

Companies Require Fast ROI

By Mark Brousseau

Russ Stalters, Information/Records Manager for BP America has a message for data capture solutions vendors: if your solution can’t solve an end-user’s business problem, or can’t help solve a problem, don’t even bother pitching it to the end-user.

Stalters spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.

In light of the current economic situation, end-users are solely focused on solving current problems, and achieving significant hard dollar savings. "Going into next year, companies like us will be head count constrained, and we're going to be looking for solutions to help us reduce costs and improve efficiency," Stalters said.

Similarly, if your data capture solution can’t deliver ROI in a year, forget it. “Companies like BP America simply aren’t looking at anything with a long-term ROI,” Stalters says. "We need vendor solutions to add value quickly and easily."

“Because of the economy, we are not going to be making big capital investments,"Stalters says. "And if I’m going to tell a business unit about an information management solution, and it doesn’t deliver hard-dollar savings, they don’t want to hear it. When you can prove it can solve a business problem, and deliver hard dollar savings, it will fly.”

As a result of the focus on fast payback, data capture solutions must also be up and running a quarter, or two quarters tops. “Business leaders are driven by time-to-market,” Stalters says. “And they are looking for ways to differentiate themselves from their competition.”

What do you think? Post your comments below.

Users Focused on Productivity

By Mark Brousseau

The downturn in the economy has end-users looking at capture solutions to help eliminate the pain from their production environments, says Craig Laue (, eastern regional manager, ABBYY USA.

Laue spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.

"Today's economy does not permit end users to think about adding head count," Laue says. However, users are being challenged by increasing costs for managing and processing content: increased amounts of content, tighter regulatory compliance standards, new workload demands for information sharing, and higher customer demands. "That's why they are looking at capture solutions," Laue says.

As users begin evaluating capture solutions, Laue recommends that they come to the table with their vision for what they are looking to get out of the technology. Some considerations: indexing, full-text search capabilities, customer access to information, image and data sharing and collaboration, and eliminating duplication.

What do you think? Post your comments below.

Users Getting 'Lean and Mean'

By Mark Brousseau

The current economic downturn should be good news for data capture service bureaus, says Joe Merkel (, sales manager, Western U.S., for nextScan.

Merkel spoke during AIIM's 33rd Annual Document Management Service Providers Executive Forum in Austin last week.

"When I talk to end-users, they tell me two things," Merkel says. "One, that they are having a hiring freeze. And, two, that they are going to get 'lean and mean.'"

This focus on cutting costs will create an opportunity for service bureaus, Merkel notes. "End-users are going to look to service bureaus to help them," he explains.

What do you think? Post your comments below.

Wednesday, October 29, 2008

The Bedrock of Alternative Payments

By Mark Brousseau

The ACH Network began as a low-volume network transmitting large recurring transactions between well-established entities. However, changes in rules and business models have brought about significant changes in the nature and volume of ACH activity.

More than 18 billion ACH payments were made in 2007, representing a 12.6 percent increase from the total number of transactions generated in 2006, according to Mercator Advisory Group. Much of the growth in ACH volume can be attributed to fundamental changes in payment methods consumers and businesses use, with the network transforming into a high-volume platform of relatively low-value, non-recurring transactions. These transactions are originated from a rapidly expanding number of merchants, aggregators, corporations, and financial institutions, Mercator Advisory Group says.

Alternative payment providers such as Google Checkout, Bill Me Later and, of course, PayPal leverage the ACH to provide consumers and merchants with a secure and efficient means of payment and in doing so are experiencing phenomenal growth.

Non-financial institutions have been beating the banking industry to the punch of developing unique and cost efficient payment solutions, especially in the e-commerce space. Ironically, alternative payment providers have succeeded using the banking industry's own infrastructure to capture interchange-like revenues.

However, a new solution has emerged from NACHA that could level the playing field for banks to compete against alternative payment providers and push the ACH network in a new direction, Mercator Advisory Group says. NACHA's recently released Secure Vault Payments (SVP), an e-commerce payment solution not only enables customers to move payments from their direct deposit accounts to merchants and service providers, but transactions occur with real-time authentication and authorization from the consumer's bank Web site. The push method ensures merchants and service providers that payments are being made with “good funds,” thus reducing concerns about fraud, charge-backs, and non-sufficient funds.

Although signature debit and credit card usage online has yet to be hugely impacted by alternative payment solutions, in many cases, non-traditional payment providers offer significantly enhanced value propositions including discounts, sales and loyalty tools, and the ability for merchants to cross sell on non-competitive merchant Web sites. These value added services create significant competitive pressures for traditional payment types and are giving alternative payment methods solid traction, Mercator Advisor Group believes.

“As alternative payment methods continue to evolve and more players step into the space, the use of traditional payment cards for online transactions will continue to decrease. It is foreseeable that merchants will increasingly promote alternative payments and consumers will become more accepting of new payment types,” said Brent Watters, senior analyst of Mercator Advisory Group’s Prepaid Advisory Service. “Mercator believes that in the next five years, 35 percent of payments made online will be in the form of alternative payments, including prepaid cards, new forms of credit and programs leveraging the ACH.”

Other findings from Mercator Advisory Group include:

… The ACH continues to show solid growth and transaction volume will continue to escalate as more alternative payment schemes leverage the network.

… The ACH is moving to push versus pull method of payment thus creating direct competition for EFT networks that have been eager to develop a PIN-less debit solution for online transactions.

… The ACH's eCheck services continue to fuel the networks' transaction volume and penetrate markets currently targeted by debit and credit cards.

… NACHA's Secure Vault Payment (SVP) creates an opportunity for banks to compete in online alternative payments.

Saturday, October 25, 2008

The Evolution of Swipe

Posted by Mark Brousseau

A great slideshow from Fortune magazine on the evolution of credit cards.

Thursday, October 23, 2008

Data Loss Jeopardizes Prosecutions

Posted by Mark Brousseau

An interesting article from today's Dallas Morning News:

Computer crash hinders Texas Attorney General's Medicaid fraud case

Thursday, October 23, 2008
The Dallas Morning News

AUSTIN – A massive computer crash that destroyed hundreds of the state attorney general's confidential documents may prevent scores of Medicaid fraud prosecutions and has revealed serious problems with a newly expanded state outsourcing of computer services.

As much as 50 percent of the Tyler Medicaid fraud division's files were destroyed in July when a server being repaired by a state vendor wouldn't restart. The scope of the damage is in dispute.

In an apparent oversight, the documents lost were not backed up – meaning that evidence crucial to convicting dishonest health-care providers who ripped off the state's health insurance program for the poor may never be recovered. E-mails and other records obtained by The Dallas Morning News indicate some Tyler investigators lost up to 90 percent of their open case files.

"In spite of earlier assurances, the destruction of critical data has, in fact, occurred," First Assistant Attorney General Kent Sullivan wrote Monday in an e-mail to Brian Rawson, chief of the Department of Information Resources. Attorney General Greg Abbott's office "cannot afford to risk a reoccurrence of this event."

Lost: 8 months of work
In all, 81 criminal cases and eight months of work in the attorney general's 13-person Tyler Medicaid fraud office were completely lost, according to an attorney general's report on the security breach – records that are being painstakingly recovered by the vendor.

IBM, which leads a vendor group selected by the information resources department in the $863 million, seven-year outsourcing deal, said it still is investigating the matter.

"We do take this incident seriously, and we're taking appropriate steps to ensure that it doesn't occur again," company spokesman Jeff Tieszen said.

Mr. Tieszen said IBM-hired data recovery specialists have reassembled 24 of 27 lost gigabytes of information – 88 percent of the lost data.

State officials said that they couldn't confirm that figure and that their latest estimates remain at 50 percent.

The Medicaid fraud data loss is the worst problem to surface in the first 18 months of the state's deal with the IBM-led group – and further blemishes a privatization push throughout state government that grew rapidly after Republicans gained control of the Legislature six years ago.

In April 2007, Mr. Abbott's office was forced to switch to the outsourced system. It gave "Team for Texas," the vendor group, lead responsibility for the attorney general's information technology system, including its servers and backup tapes.

The change was supposed to provide better service and save money. But early this year, the attorney general's office and the IBM-led group had a series of communications breakdowns over whether data was actually being backed up.

In a May e-mail, Sean Peterson, Mr. Abbott's director of network operations, appeared to have a premonition, raising doubts about whether remote office servers were being properly maintained. He also asked for a list of all the backups that had failed in the last three weeks.

"I am concerned that these are not being backed up properly," he wrote.

Lag in reporting
On July 21, the Tyler server wouldn't restart. Alarms weren't raised immediately; memos in the attorney general's office say the vendor didn't notify Mr. Abbott's office of the problem until 10 p.m. on July 22.

But as initial efforts to retrieve the records failed – and attorney general's office employees realized that IBM had "not routinely backed up the server as required by contract" – memos show that both the state and the contractor realized the gravity of the situation.

By late July, IBM had to call in a special forensics team from California to try to recover documents. And the data losses were so severe that employees in Mr. Abbott's office questioned in e-mails to each other whether they should resign for failing to properly oversee IBM, according to records obtained by The News.

Shortly after the Tyler office's data loss, documents indicate the attorney general's office determined that servers for three other field offices were not being backed up, either.

In Monday's e-mail, Mr. Sullivan wrote that he needed a guarantee "that no state agency will again be faced with the situation of having data destroyed and functionally irretrievable."

There have been other highly publicized problems with big outsourcing pushes by the Health and Human Services Commission – one that created privately run call centers and maintained software to support eligibility screening for public assistance, and another that privatized payroll and hiring at 12 social services agencies.

In 2005, the Legislature and Gov. Rick Perry, building on an earlier outsourcing of state computer services and data backups, approved a measure forcing at least 15 state agencies to join a dozen that already were using an earlier vendor, Northrop Grumman Corp.

A new, expanded outsourcing deal with Team for Texas – the current provider – was struck in November 2006 and took effect in April 2007.

The deal, expected to save the state $153 million by 2013, has attracted little public attention because even though more than 500 state employees lost their jobs, about 40 percent found other state positions and the rest were guaranteed spots with IBM or its subcontractors Unisys, Xerox and Pitney Bowes.

In July, though, state Auditor John Keel criticized the information department for not riding herd on major state agencies. Though agencies were supposed to hand over to IBM their most knowledgeable and experienced computer technicians, many kept those workers by using them to fill other vacancies, Mr. Keel's audit said.

China Embraces Credit Cards

Posted by Mark Brousseau

An interesting article from this week's LA Times:

China charges into credit cards

Banks are stepping up their marketing of plastic, but the penalties are harsh on delinquent payers.

By Don Lee
reporting from Shanghai
October 22, 2008

Imagine there was a law that said if you missed two credit card payments in a row, you had to pay the full balance immediately, with heavy penalties. And if you didn't, your bank would take out an ad in your local newspaper, calling you a deadbeat. Or worse, thugs in suits might show up at your office, haul you down to the bank and keep you there for hours until you signed a promise to pay.

Welcome to the world of plastic -- Chinese style.

Chinese banks don't have national credit bureaus and sophisticated scoring models that allow them to churn out approvals in minutes. Instead, armies of young workers pore over paper applications, manually verifying one piece of information at a time.

Yet banks in China have issued tens of millions of credit cards in recent years. Today, more than 100 million are in circulation among China's 1.3 billion people, up from just 3 million in 2003, according to analysts and bankers.

Unlike American credit card firms, which are cutting back because of rising delinquencies, Chinese banks are stepping up their marketing of plastic. In the next five to 10 years, analysts say, China could issue 1 billion new cards, largely to a mass market that has little experience with credit.

Chi Wei Joong, a former American Express Co. executive, runs the credit card operations for China Merchants Bank. He has more than 9,000 workers nationwide. In every major city, Joong's sales force researches office buildings, their occupancy rates, average rents and other statistics. A report is then sent to the bank's credit department, which assigns a credit score for the building before salespeople target folks who work there.

"This is to control risk," Joong said. But if borrowers default, he doesn't hesitate to turn the accounts over to more than 100 collection agencies.

Joong says fewer than 10% of his bad loans end up in court, but some people have gone to jail. Under Chinese law, a credit card user who intentionally defaults on a sum as little as $3,000 can be sentenced to as much as five years in prison.

The tough regulations haven't stopped the steady increase in troubled credit card debts at China Merchants and other lenders. Analysts estimate that banks in China this year were writing off 2% to 3% of their credit card loans, less than half of the July charge-off rate of 6.6% in the U.S., according to Fitch Ratings.

"In the U.S., all the credit card companies are chasing subprime borrowers" because most customers with good credit already have multiple cards, said Darwin Tu, chairman of Sino Credit Corp., an industry research and marketing firm. In China, he says, banks haven't saturated the prime market yet.

On average, a Chinese credit card holder has no more than two cards, compared with five for Americans, said Tu, a Stanford University graduate who cut his teeth at Fair Isaac Corp. in California, which pioneered credit scoring.

At China Merchants Bank, which has about 23 million credit cards outstanding, Joong says his department's loan-loss ratio has climbed from 0.67% in 2005 to at least 1.5% this year. Such numbers are likely to rise as more cards are issued to young adults, who belong to China's one-child generation, seen as more spendthrift than older Chinese.

Among Chinese credit card users, more than 70% pay the entire balance every month, says Nie Junfeng, a manager in the Bank of China's personal finance department. "This may be related with the tradition that Chinese people, as the saying goes, don't like eating next year's food this year," he said.

But the young generation is different, he said. "They're more comfortable spending tomorrow's money today."

Deng Jialing, 27, got his first credit card from China Merchants Bank in 2006 when he was working for a cellphone parts manufacturer in Shenzhen, making a little more than $500 a month. His card's limit started at about $400, and like all Chinese credit cards, his had an 18.25% annual interest rate, set by the government.

Deng bought a cellphone. The card was tapped out, and two months later, Deng got a second credit card, from China Construction Bank, the country's largest issuer of plastic.

Said Sino Credit's Tu: "Once you get a card, you show that one to another bank and they give it to you. [The data's] not linked."

After hitting the ceiling on the second card, Deng easily secured a higher credit limit. He applied for more cards, building up a balance of $17,000 at nine banks. His charges included electronic gadgets, food and a $4,000 hospital bill when he got pneumonia.

For a while, he played a cash-advance game, taking out money from one card to pay the minimum monthly payment on another.

Then, on a June evening, three big men in black turned up at his workplace in Shenzhen. Deng thought about slipping out the back door. But he met the men and followed them into a black sedan.

Sandwiched between two of them in the back seat, Deng was taken to China Minsheng Bank's credit card center across town. There, he said, the grilling began: Where did you spend all the money? Why can't you pay it back?

"I told them that I was at the end of my rope," said Deng, who owed about $2,000 to China Minsheng, which declined to comment. Five hours later, after being fingerprinted and signing an agreement to pay off the balance in three days, Deng stepped out of the bank and into the night. "I walked slowly to my home, thinking how had I come to this situation."

Analysts say cases such as Deng's aren't common in China. To keep it that way, China's central bank is developing a national credit resource system, something like Experian, Equifax and TransUnion in the U.S. As of March, the People's Bank of China said, its database contained information on nearly 600 million individuals. Of those, about 3% are noted for failing to pay bills or defaulting on loans or credit cards, says Joong of China Merchants.

Joong and other bankers use the database to screen out applicants who have been blacklisted, but the central bank's system doesn't contain a complete profile to assess the creditworthiness of the remaining 97%. Some banks don't share or make timely updates on consumer data, so lenders often don't know how much debt cardholders really have.

To discourage defaults, Guangdong Development Bank has taken out ads in newspapers, publicizing the identities of delinquent borrowers. Some banks frown on the tactic, but it isn't illegal.

Other card providers try to reduce risks upfront. State-owned China Construction Bank, for example, markets cards in Shenzhen through a cable TV company. When the cable installers make a service call to a home, they offer credit card applications and at the same time verify where residents live. Joong is considering a similar tie-up with water delivery companies.

But countervailing forces threaten to increase the risk of card abuse and defaults. Cash advances usually aren't supposed to be more than a small share of a card's credit limit, but consumers say merchants and finance firms ring up bogus or inflated purchases on credit, giving the cardholder cash, less a fee. Chinese lenders have started to offer balance transfers and other sweeteners to encourage customers to revolve debt.

Chinese bankers dismiss concerns that they could one day see the kinds of heavy losses that have plagued U.S. lenders during downturns or the sort of plastic debacle that hit South Korea earlier this decade when rules on credit were eased and consumers went wild with charges.

But others aren't so sure. "That depends on how banks control the cards," said Yan Yiming, a Shanghai attorney who specializes in economics and consumer law. "I can see that many are issuing cards very aggressively these days.

"They're also going after bad debts very aggressively, as Deng learned. After that desperate June evening when he was taken to the bank, Deng called his aunt and borrowed $13,000, promising to pay her back, $370 a month. Since then, he has pared his overall credit card debt to $2,900.

Crooks Going Phishing

Posted by Mark Brousseau

An interesting article from this week's LA Times:

In desperate times, scammers pounce

Phishing expeditions are on the rise, with customers of struggling and failed banks the latest favored victims.

By David Colker
Los Angeles Times Staff Writer
October 19, 2008

The economic meltdown is not devoid of economic opportunities. There's one group of folks who might do just fine: scammers.

Security experts have spotted an increase in phishing, the scam that uses fake e-mails to get people to hand over personal financial information that could be used to drain bank accounts or for identity theft.

It was no surprise to Dave Marcus, director of security research at McAfee Inc., one of the largest computer security firms.

"Whatever is happening out there in the world, you will see scams that take advantage of that," he said.

The banking crisis -- with its mergers and takeovers -- was tailor-made for phishing. It gives scammers the opportunity to send out e-mails claiming that personal account information is needed because of the changes.

McAfee began seeing phishing reports related to the crisis shortly after the well publicized failure and sale of Washington Mutual Bank in late September.

"Generally, if the issue is in the news on Monday morning, we'll start seeing the phishing start on Monday evening or Tuesday," Marcus said.

Even a bank deal that falls apart can generate phishing scams. This month, several security websites warned that an e-mail supposedly from Wachovia bank was being circulated.

"Citigroup announced a buyout of Wachovia brokered by the FDIC moments ago," the e-mail said. Bank customers were directed to go to a site where they would fill in account information in preparation for the takeover.

But the Citigroup buyout never happened -- Wells Fargo instead made a deal to acquire Wachovia. And the e-mails were bogus.

Wachovia put a warning on its website, stating that it never sends e-mails asking customers to "provide, update or verify your personal, business, account or other confidential information."

Phishing scams often begin with a spoofed e-mail that appears to come from a legitimate source.

In some cases, fraudsters exploit security loopholes to hijack a genuine e-mail address, making it appear that is where their messages are originating. Or they simply resort to using addresses that are close to the real thing.

Examples sited by security experts include misspellings that use a double "v" to simulate a "w," as in the fake

Also, the number "1" has been used as a stand-in for the letter "l," as in

But in many cases, the scammers don't even bother to make addresses look legitimate. They rely on alarming or alluring messages. The text might say that if personal information isn't immediately disclosed, the account will be frozen or shut down.

Another variation is an urgent warning that an account is under attack by hackers and the information is needed to "verify" the true account holder.

Money is sometimes used as a lure. For the last couple of years, fake messages supposedly from the Internal Revenue Service have promised recipients a tax refund. But to deposit this windfall, the individual's banking information is needed.

Some of the e-mails are laughably poor attempts at fooling the public. A recent one read, "Recommends banks to process Visa card to renew your data quickly before being delete your Visa card."

It's like spam from Yoda.

But a link on the e-mail led to a legitimate-looking Citibank Web page where banking information was requested. These simulated sites, which can be created using simple Web tools, are the second part of the phishing scam.

They can be so convincing that, in an academic study presented in 2006 at the Conference On Human Factors in Computer Systems, well-crafted phishing websites were able to fool 90% of participants.

Obviously, the public needs to be educated about phishing, which seemed to be the aim of an e-mail in wide circulation in England. It was addressed to customers of Barclays, one of the country's largest banks.

"Like other UK based banks, we are currently seeing very large numbers of 'phishing e-mails' in circulation," it said. "Many of these look as if they are from Barclays, typically encouraging you to click a link and type in your login details."

The e-mail went on to explain how phishing works and requested, "please spend a few minutes to upgrade to our latest security."

Then it gave the link to a website. And as you guessed, it was a phishing site, designed by scammers to get their hands on account information. The e-mail was a fake, but so polite.

At the very bottom it said, "We apologize for the inconvenience and thank you for your co-operation."

You could almost hear them laughing, literally all the way to the bank.

Wednesday, October 15, 2008

The Economy and Outsourcing

Posted by Mark Brousseau

Outsourcing Shops Feel the Street's Pain

Info tech spending in India by U.S. financial-services firms could shrink 15% to 20% over the next year

by Mehul Srivastava and Nandini Lakshman

DELHI As the credit crunch on Wall Street sent dominoes toppling around the globe, Tata Consultancy Services, India's largest software-services company, started tightening its belt.

Travel was restricted, electricity consumption was to be reduced, and the company considered removing Microsoft (MSFT) Office from its PCs and replacing it with free open-source alternatives, employees say.

India's seemingly unstoppable outsourcing industry is grappling with the woes of the financial firms that make up as much as half of revenues for some players. "How this plays out, who knows?" says Pramod Bhasin, CEO of Genpact, the world's largest business process outsourcing company. Although he's optimistic, he says: "The ability to predict has gone away."

Outsourcing companies have already pulled back on new office space and leases, according to Knight Frank India, a property consultant. "Their level of concern has gone up dramatically in the past few weeks with their top-tier customers vanishing right before their eyes," says John McCarthy, a Forrester Research (FORR) analyst who traveled to India twice in September to meet with jittery Indian players. "Anyone who says they aren't worried is probably lying."

In the past two months some of the biggest names in U.S. finance have gone under. Vanishing with them is the kind of work Indian software professionals have long excelled at—projects requiring mountains of coding and individual attention. In the first half of 2007, financial companies around the world handed out at least 48 major outsourcing contracts with a total value well in excess of $5.5 billion, reports researcher ValueNotes. The first half of this year saw just eight such contracts with a total reported value of $767 million. "A lot of companies are putting on a brave face and saying this is just a temporary phase," says ValueNotes CEO Arun Jethmalani. "But how temporary is temporary?"

The estimated hit to India's outsourcers? As much as 8% of total revenue could vanish, Forrester predicts, as information technology spending in financial services shrinks by 15% to 20% over the next year. India's top five info tech and outsourcing companies saw slower growth in the first quarter, and their stocks have taken a beating. TCS's annual profit growth slowed to 7%, down from 36% in 2007. The company declined to comment for this story. Infosys Technologies has warned that it probably won't see a rise in profit this year but had no further comment. Satyam Computer (SAY), the No. 4 software service provider, says it has contracts with Lehman Brothers, AIG (AIG), and Merrill Lynch (MER). Those are "minuscule parts" of Satyam's $2.7 billion in annual revenues, says Chief Financial Officer V. Srinivas. "But that doesn't mean there won't be an impact in the future," Srinivas says. "We would be kidding ourselves if we thought that."

Optimists predict the downturn will be short. They say revenues will bounce back when American business decides to be more efficient, resulting in more outsourced work. One rosy estimate, by consultancy Everest Group, projects that cost-cutting spurred by the crisis will result in a 40% to 50% increase in financial-service outsourcing over the next five years.

The Indians, though, will continue to face increased competition for those jobs. Global players such as IBM (IBM), Accenture (ACN), and Hewlett-Packard (HPQ) have grown deep roots on the subcontinent. "The crisis will make [the Indians] face the reality of doing global business," says Siddharth A. Pai, managing director of TPI, a consultant that helps companies manage outsourcing contracts. "They haven't seen the trough yet."

Tuesday, October 14, 2008

The Economy and Insurance Industry IT Spending

Posted by Mark Brousseau

A tidal wave of bad news has swept Wall Street and Main Street, and debris is coming ashore across the globe. This crisis is sure to affect insurers the world over for years to come.

Celent LLC believes that the unprecedented breadth and intensity of issues currently facing the insurance industry will severely constrain future growth but also provide an opportunity for carriers that position themselves correctly.

“The world has changed, but not ended,” said Donald Light, senior analyst with Celent’s insurance practice and coauthor of the report. “Insurers, their technology groups, and technology vendors need to recognize this change and adapt to it.”

“Adapting includes an examination of implementation plans and budgets with an eye toward short-term, tactical payback,” said Mike Fitzgerald, senior analyst with Celent’s insurance practice and coauthor of the report.

How has the economic crisis affected your organization’s IT spending?

Post your comments below.

Identity Theft: Not Dead Yet

Posted by Mark Brousseau

An interesting article from Fairfax Connection on the resiliency of identity theft crooks:

What’s in a Name?

Though national statistics are trending downward, millions of Americans still at risk for identity theft.

By Derek B. Johnson/The Connection
Wednesday, October 08, 2008

In nature, the early bird gets the worm.

Residents going through their bills one day and finding thousands of dollars worth of mystery purchases would be wise to follow a similar mantra: the early bird gets his identity back.

That is, at least, according to retired investigator Tom Polhemus of the financial crimes section of the Fairfax County Police Department. The sooner you act once you know your identity has been stolen, the more hours you save down the road dealing with police, banks, credit unions and bill collectors.

"The main thing that we advocate is you have a personal responsibility to keep on top of your own identity," said Polhemus. "You can’t expect the government, police or financial institutions to help you. If you don’t know, you don’t know."

Though national statistics are trending downward, identity theft remains one of the most prevalent crimes in the country. According to surveys conducted by the Federal Trade Commission and Javelin Strategy and Research, 8.4 million Americans reported being a victim of identity theft in 2007, with just over $50 billion being stolen. Those numbers were down significantly from previous years, with 10.1 million Americans in 2003 and 9.3 million Americans in 2005 reporting the same crime. However those statistics do not take into account victims who are unaware their identity has been stolen, and many cases may go unreported for months or even years until a victim hears from an out-of-state bill collector or a business looking for payment. Tammy Nealy is the director of public affairs for Lifelock, an Arizona-based personal fraud protection company. For those people still carrying their Social Security card in their wallet or purse, she has a message.

"Stop. You’re going to get pick-pocketed," said Nealy. "You never think your wallet or your purse is going to be stolen, but it happens."

In addition to providing information and education on keeping personal information safe, her company charges a monthly fee to contact each of the three major credit bureaus and put a fraud alert on a client’s account. Nealy said a victim of identity theft could spend up to hundreds of hours talking with police, creditors and other institutions in order to restore their credit back to its original state. The mean resolution time per victim, according to the 2007 FTC/Javelin survey, was 40 hours.

THE PROBLEM has become so prevalent because thieves have so many ways that they can use just a few pieces of personal information to impersonate their victim. Polhemus named writing personal checks was as one of the worst practices a person can do if they want to protect their identity.

"Paper checks are terrible. It’s too easy once you write a paper check, now I’ve got your routing and account number," he said.

Those numbers combined with a cellular phone number or other pieces of information are usually enough to rack up thousands of dollars in online gaming or purchases. Seniors and children are at a higher risk for fraud or identity theft than others, according to Nealy. Because most young children lack any pre-existing forms of identification and parents rarely check up on their children’s credit report, their identities are ripe for use. A child’s age does not matter, she said, because most children have no previously established credit.

As long as a thief uses the information to beat them to it, most children won’t discover they were victims until years later, while they’re applying for their first loan or checking account. If parents begin receiving catalogs or magazines in their child’s name, that’s usually a red flag signaling that identity is being used by someone else.

"It may be cute, but it can be damaging. That means there’s a credit report for that child and bank has sold that information to a marketing company," Nealy said.

Seniors, she said, tend to be more susceptible to phone or e-mail scams, giving out personal information to people impersonating police or government officials. While she called a person’s Social Security number the "key" to all other information pertaining to a person, the truth is very little information is required to steal an identity. E. Hunt Burke, president of Burke and Herbert Bank and Trust Company, said his bank deals regularly with such cases.

"The thing we see the most is people taking advantage of the elderly customers" Burke said. He also cited phone and e-mail scams as the preferred method thieves use when dealing with seniors.

In the case of a customer who has become a recent victim of identity theft, Burke and Herbert Bank has a 24-hour phone line to call into and will immediately freeze an account when identity theft is reported. The bank also provides secure e-mail accounts to their customers for sensitive information.

There is very little in the way of "too much" when it comes to protecting your identity, said Burke.

"Every week there’s a new technology or scam. I saw stainless steel wallets the other day and thought that was silly, but people really do have devices in their pockets that can read the [credit] cards in your wallet," he said.

Polhemus said as long as a victim is diligent in keeping track of their credit reports and notify the police and creditors within 60 days of the theft, the amount of damage and liability will be drastically curbed. Wait too long, and a person may double or triple the amount of time spent clearing his or her name. Victims may even be on the hook for some of the costs.

"If you open up a bank statement, look at it and see fraud, call the bank. They will take care of you," said Polhemus. "If you know you’re busy or the statement is depressing you and you throw it in the drawer, you are responsible for paying for it. You’re on the hook for that money."

Because fraud and identity crimes rely heavily on rapidly changing technology, state and federal laws are still catching up to the practices being put in place by the criminals they’re hunting.

Using information taken from a mailbox in Virginia, a thief can run up bills in Georgia, Wisconsin, California or any other state. That severely hampers the ability of investigators at the county level, like Polhemus, from pursuing all but the most serious and costly identity crimes.

"Our criteria, the things that we look at before we investigate a case of identity theft, is, first off, do we have a Fairfax County resident without money? Then we look at likelihood of successful prosecution," he said. "We could subpoena records and find out who was making those calls, but we’re not going to extradite him from Georgia."

Nealy said credit agencies should face tougher fines and regulations when their databanks of personal information are lost or stolen. "If there was a requirement for third-parties to have certain protocols in place, that’s really going to hold these companies accountable for information," she said.

Monday, October 13, 2008

Technology in Finance

Posted by Mark Brousseau

Accounting is the top treasury function that is supported well by technology, according to Treasury & Risk’s annual financial leadership survey. Sixty-percent of the roughly 500 treasurers, controllers, CFOs and other senior financial executives who responded to the survey identified accounting as the area where technology is delivering positive results, followed by account reconciliation (50 percent), cash flow forecasting (34 percent), and business performance management (33 percent).

Conversely, 52 percent of those responding to the survey said cash flow forecasting was a function that needed better support by technology. Business performance management (47 percent), accounting (45 percent), account reconciliation (41 percent), and risk management (40 percent) were among the other functions where respondents thought technology could provide better support.

Overall, 53 percent of the financial leaders responding to the survey thought their company could do better when it came to encouraging innovation and independent thinking.

Monday, October 6, 2008

Utility Webinar Q & A

By Mark Brousseau

Last week, TAWPI’s Payments Capture & Clearing (PCC) Council and Purepay Receivables Automation hosted a Webinar on the business case for image-based remittance solutions in the utility industry. The Webinar included a case study presentation by Omaha Public Power District (OPPD), a Purepay remittance software user. There were so many questions at the end of the Webinar, that there wasn’t enough time to answer them all. So, below are the responses to the Webinar questions.

Are you able to save queries?

Tim Vasquez, Omaha Public Power District: We save our own queries in Access.

How much does the software cost?

Doug Myers, Purepay Receivables Automation: Software is based on the type of transport that it runs on, much like the CPU based pricing for the core product, and this is pretty standard across the industry and then there might be some additional modules that are specially priced based on particular capability rather then on size of transport.

How many hours are your employees spending each day now on processing your items in the utility?

Tim Vasquez: Processing on our peak days in the week takes about 6 hours total for the two processors to complete. About 4-5 hours on off-peak days for one processor.

What forms of electronic presentment and payment does OPPD offer to their customers?

Tim Vasquez: We have a very large base of customers who use our own automatic bill payment that’s about 25 to 30 percent of our customers, we get another 10 percent who use our online system or pay from an online banking system. Many of our companies will pay us by EDI or an ACH transaction. We also offer credit card payment and in-person payments to make up for the rest of that percentage to get us to that 41 percent for mail.

What does EDI stand for?

Tim Vasquez: Electronic Data Interchange; it’s used typically to send extra data (such as account numbers) along with an ACH payment.

What forms of electronic presentment and payment does OPPD offer to their customers?

Tim Vasquez: We offer Web, IVR and the auto debit program. In addition, we have electronic payment links to most major payment groups (Checkfree, Online Resources, etc.)

How long do you hold your paper items prior to destruction?

Tim Vasquez: I believe the bank requires you to hold them for 5 days. I’d check with your bank on those things specifically. We went for as much room as we could hold; most people recommended that to us as we were doing vendor evaluations. We can hold about 5 weeks of data and we destroy it internally ourselves.

Do you have walk in sites that take payments? And does this application interface with those sites?

Tim Vasquez: We have about 20 locations throughout our service territory where anybody can walk in and take a payment with an OPPD logo on it. We have OPPD software running there. Then we get those checks down at our location. If had wanted to make the investment of putting that image piece out of those offices, then we would be able to interface directly. But it seems easier for us to ship the check down to us for processing.

How do you handle keying check only payments regarding quality? - For example, double keying, etc.

Tim Vasquez: We interface with our CIS system for check only payments of that type. If it’s just check only batches that are being deposited, we use the control total to ensure the items haven’t been double keyed. If its for the account number, we return an amount from our CIS showing us what amt is due from that customer, so it gives someone an item to balance against just like it’s a regular transaction, we are assuming that the bill coming was for the amt the customer owed and then if the check does not equal that amt it presents it back to the operator like Amanda showed, showing whether you want to adjust the stub or adjust the check amount. The system can be configured to double key amounts if required.

Did OPPD ever use lockbox? There are several doing this, what would you suggest to those companies?

Tim Vasquez: We use a lockbox for deposit of our high dollar amounts. They receive the mail earlier and deposit earlier. We still process the items afterwards. We have had several people approach us to take over our processing. I think this is part of the challenge we are talking about to make sure we are competitive with that cost.

We feel that we have something to offer to that product, it’s not just a commodity we just want to use payments process. Those are our customers, they are our contacts and that’s our business life blood. We want to own that responsibility for those payments, get them posted and have the control and the ability to research when a customer calls in. We take that stuff seriously and so before you answer to us I really suggest to you that to evaluate this system, no one is going to let me talk about a specific price, but the pricing on this type of system is worth your while to look into.

I have heard companies had issues handling bill-pay payments. How did you address this issue within your organization?

Tim Vasquez: We did our bill pay; we’ve used two different groups for our bill pay. We had a lot of internal interfacing expertise. Certainly all payment processing is all about balancing, are you batching, and are you real time; if your real time, do you have a method of dealing with returns. My preferred method as an accountant, I want to batch, I want to know it’s in balance before I post anything and I want to see it posted in my bank account that same day. A big component of that when I get a chance to put in an interface for a system I ask to batch, I want to see a total and I want to see it in a bank the same day before I post payment. That’s how I would suggest doing it.

Who are you using for your web and phone payments and do they integrate directly to the other accounts receivable file you receive on other payments?

Tim Vasquez: We put Purepay systems through our regular interface for payments. Basically anytime you have a payment interface you’re going to be creating some type of flat file that goes through your interface system. It’s really not complicated. A long time ago when we started developing our interface systems for a RCIS system, we said lets make a standard flat file that’s easy to get your hands around and is simple to explain to a vendor, so that no matter what payment style we go after whether it’s a Check Free, Princeton, or; there are so many of those types of organizations that wanted to be send a very simplistic flat file format, this is my flat file format, this is what I need you to be able to create and if they can’t create it, they have the expertise in-house to create that type of simple flat file.

I know this payment type is decreasing, but what percentage of total payments are in-person?

Tim Vasquez: We actually have quite a contingent of walk-in payments. We have 10 percent of our customer base walk into our customer office through the past 10 years; really an un-phased group. Then we have an additionally 4 percent who walk in to our payment agent locations. Certainly we service a pretty good geographical region that covers rural and urban and a pretty good demographic of young to old. Those payment styles, I think Mark had mentioned, just because they are declining doesn’t mean that they are really going away. People are their payments, and they will pay the way that they prefer and we don’t discourage or encourage from any particular site location.

Does the software automatically convert each check to check 21 or does it also convert some checks to ARC?

Amanda Hales, Purepay Receivables Automation: It can do both. If you have purchased both modules it can do the decisioning for you for both. It will automatically decision if its ACH flow or should be Check 21.

Tim Vasquez: We went with the opinion of doing Check 21 just because we have so many banks within such a close geographic location. Once we deposited to 3 banks we were getting a pretty favourable flow schedule without ARC’ing, we felt it was a cost benefit for us to just go all Check 21.

Who were some of the vendors/how many vendors did you consider when you went through the process of choosing Purepay?

Tim Vasquez: I had considered 10 different vendors. Having not cleared who I can say and who I can’t say; I’ll say that I had considered all of the major players, and it was only after looking at what was out there and available that I decide to look at some of the smaller software providers who I didn’t know as well. It really all started with a walk through the TAWPI showroom, just seeing what equipment was available and who were the venders that were in play who I thought would be around for the next 5 years. Then I went to 10 of those people.

Can you explain a little about why you might not want to go with "all electronic" from day 1 if you had it to do over again as you mentioned in your intro?

Tim Vasquez: You really need to work through your banking relationship to figure out what their timeline is for electronic payment deposit. I was surprised afterwards that most banks say you have to be live and then follow this schedule for this number of weeks before we will accept an electronic deposit for you. And because of a very strong good relationship within our own geographic region with our banking group, I set the schedule for one of my banks who then adhered to it are getting a lot of props from me as far as being someone who was on my side during implementation.

Most banks you’ll find though when you start talking, find out what their schedule is for electronic deposit. See what you can do about the schedule and how you can still operate in your own environment while waiting for the electronic deposit piece to come up. Probably now if I had to do it over again I would get my bank to commit to letting me send from a remote site, set up the equipment in that remote site, go through the testing from that remote site, by remote site I would mean my vendor’s location, so that when it comes to I’m ready to electronic deposit when my vendor is ready to send.

Are you using RDC for the walk-in payments?

Tim Vasquez: We do capture walk-in payment checks using RP$ for deposit.

Which is cheaper ARC or Image Exchange?

Tim Vasquez: That’s what you want to check with your bank on, make then commit to what the pricing is going to be for Image Exchange in all types and ARC in all types. Make them commit in writing to you before you go forward on what’s your best solution. We had to run the scenario with the types of transactions we thought we would get from our history and got our banks to commit to what the pricing was. And then our learning afterwards was make sure you go back and make sure you are getting that price, because there is a lot goes into electronic deposit. You want to look at those analysis payments and make sure you are hitting that target price they said they would give you.

Is there a need for scanning letter size documents along with checks?

Tim Vasquez: Purepay has a solution for that. If the company was paying me with a check/stub attached and had data that I wanted to capture. I started using that check/stub as my stub and I would just enter data from there so I can capture that image. I decided not to go with a full length page just because there wasn’t enough volume for us to justify trying to put in that solution. Though, Purepay did offer me a solution for our volume that we had.

How do you handle Image Quality problems?

Tim Vasquez: The bank will notify you with the image that doesn’t pass their quality check. It is not a large volume, most of the time the ones you’re going to have returned are the ones where customers have used the ‘Gel’ pens that don’t show up on the image. We get probably one or two of these that we deal with daily during the peak and probably two for the rest of the week. So I say we get probably a handful every week that we have to deal with. That’s why the bank requires you to keep them for whatever the number of days. I think the bank requires 2 weeks or 5 days. That their time to get back to you and tell you these items didn’t clear your image quality, you go back and pull them out and then you deposit them in a paper form. We have a courier that still delivers office deposits for us, so we utilize that courier at that time.

How do you send the remote deposit file to your bank?

Tim Vasquez: Each bank has different guidelines for sending. We use the secure web site for one and SFTP for another.

Does your software do Remittance Amount Recognition? Meaning if the amount is hand written and not in the scanline.

Amanda Hales: We can use ICR (Intelligent Character Recognition) to read a hand written amount on the document. Yes.

In this solution, is there a need for redaction - stripping/removing personal/confidential information before transmitting?

Tim Vasquez: We had to do this a little bit with our credit card payments. We didn’t want the credit card number to be really captured anywhere on our system, almost period. And so during the software configuring you want to store with your payments and whatever it is you want to send from your payments. We also went through with the different banks that we were dealing with the different types of encryption that we would use for the data that would get sent.

What is your item per paid labor hour throughput (IPH)?

Tim Vasquez: Our throughput per machine is around 1,000-1,400 per hour depending on the operator.

Are you sending an X9.37 image file to your banks? Also, how do you determine what bank receives what deposit? Does Purepay allow you to select what bank account to deposit prior to running the deposit?

Tim Vasquez: We are sending tailored x9.37 files to the bank. Each bank has their own customizations required of the x9.37 file. OPPD determines what bank to deposit based upon the ABA number of the check being deposited, but the determination is customizable.

Amanda Hales: The deposit accounts can be setup in the application to be dynamic. You can setup multiple deposit accounts based on criteria in the scanline, etc.

Wednesday, October 1, 2008

System Configuration Pitfalls

By Mark Brousseau

What is the most common mistake billers make when configuring a new remittance system? Looking at the solution with too limited of a scope, says Bob Balotsky ( of Houston-based US Dataworks, Inc.

“Billers may think that they are expanding their horizons by implementing a new system with advanced features and functionality,” said Balotsky, citing exceptions handling and data entry tools as two examples. “But that is not enough. Automating remittance payments that come through the mail, although valuable, doesn’t address the other ways payments are made to an organization.”

Balotsky tells me that organizations need to look beyond the remittance silo and develop an enterprise-wide payment strategy. Only then can an organization take full advantage of the available payment clearing alternatives. “In order to truly maximize organizational efficiencies, billers must take a higher-level, enterprise-wide approach,” Balotsky said.

Yolanda Sanchez (, product manager at US Dataworks, adds that when configuring a remittance system, especially an enterprise payments solution, billers want to be sure to consider the different types of transactions that were previously in different departments, and now will be coming together: “You need to consider the total throughput.” Similarly, billers need to be sure their new solution supports emerging payment types.

Sanchez also warns billers not to fall into the trap of having a new solution replicate the tasks of a legacy system, simply because the organization is familiar with those processes. “Be sure you understand how the new system can be configured to make processes more efficient, or in some cases, eliminated,” Sanchez said. “You need to get past the mental roadblock of, ‘We’ve always done it this way.’” What do you think? Post your comments below.

Tuesday, September 30, 2008

The Credit Crisis and Cash Management

By Mark Brousseau

As a result of the unfolding credit crisis, the use of purchasing cards and travel and entertainment (T&E) cards may soar as companies look to take advantage of float, buyer discounts and reductions in accounts payable staff available for posting and payments. That’s according to Ed Bachelder ( of Boston-based Hitachi Consulting (formerly Dove Consulting, a division of Hitachi Consulting).

“The goal will be for companies to conserve their cash and help treasury management minimize their need for credit,” Bachelder told me. “The cost of capital for many businesses will double if the Washington D.C. bailout does not work.”

Bachelder also believes that inflation could also be on the rise again if the bailout does not work and the dollar weakens. “This looks a lot like 1978-82, with the specter of stagflation, and double-digit inflation and interest rates,” Bachelder said. “That was the era when complex treasury and cash management functions rose to prominence in most companies.”

Many companies will also look for ways to reduce costs as a result of the credit crisis, Bachelder said. For instance, some companies will leverage self-service and automated technologies. “Look for more promotion of Internet bill payment, and less ‘live representative’ interaction,” he said. “Billers will jump on the pay-it-green bandwagon and get serious about online bill presentment, seeking payment via ACH debits (pull) and credits (push).”

Bachelder also believes that outsourcing will continue to grow as companies pare back to their core competencies. “More firms may decide that running an in-house lockbox may not be part of the picture,” he explained. What do you think? Post your comments below.

Saturday, September 27, 2008

Economic Volatility May Drive Expedited Payments

Posted by Mark Brousseau

An interesting article from the American Banker on the impact of recent economic volatility on expedited payments:

Will Slow Economy Speed Bank Adoption of Expedited Bill Pay?
American Banker
By Daniel Wolfe
September 19, 2008

The slowing economy could offer banks an opportunity to earn fee income from expedited bill payment, a technology that vendors have tried to integrate with their other payment services but financial companies have been slow to adopt.

Bill-payment providers have long promoted these same-day payment capabilities, which typically carry a fee of $10 or less, as a better option to consumers than the late fees many billers impose.

Observers say that consumers' payment habits have been disrupted by the ailing economy, and that many people now see last-minute payments as a good tool to manage cash flow.

According to a survey published this week by Javelin Strategy and Research of Pleasanton, Calif., this change has opened a window for banks to add expedited payments to their bill-pay services.

Though the survey found that consumers typically adjust their spending in a slowdown, and will likely make fewer last-minute payments, the current economic situation is far from typical.

"Economic times are changing abruptly," James Van Dyke, Javelin's principal and founder, said in an interview Thursday. "Consumers spent on purchases or household needs in one economy and then they find the bill due in another. When that happens, you're essentially outliving your means."

Consumers will go to billers to make last-minute payments if they cannot get this service from banks, Mr. Van Dyke said, and "banks have been really sleepy to get into this game."

To spur adoption by banks, bill-payment vendors are offering them more options.

Online Resources Corp. of Chantilly, Va., integrated expedited payments into its bill-payment platform in April, after offering a test version for more than a year.

David Munger, Online Resources' vice president of product management for banking payment systems, said the integration has made the service available to clients of more than 500 financial institutions.

Since then, about 1% of the payments to billers that allow expedited payments have used the faster service. For billers with higher penalties for late payments, such as mortgage and credit card providers, it has been 2% to 3%, Mr. Munger said.

"We absolutely think the economy is having an impact on consumers' need for expedited payments," he said.

Consumers are also making same-day payments two or more days before the due date, when other methods would have gotten the payment to the biller on time, Mr. Munger said. These consumers are using the service as "insurance," he said, paying the fee to be absolutely certain that the payment arrives when it needs to.

One of the biggest factors in increased consumer adoption has been awareness, Mr. Munger said.

He said Online Resources makes the expedited payments option readily visible and lets consumers choose it with a mouse-click as they make their normal bill payments. This makes the feature prominent without being intrusive, he said. He said Online Resources makes the expedited payments readily visible and lets consumers choose it with a mouse-click as they make their normal bill payments. This makes the feature prominent without being intrusive, he said.

Metavante Technologies Inc. of Milwaukee began offering expedited payments 18 months ago and says it has had a substantial pickup in bank adoption and consumer use over the past five months.

Jeff Lewis, the president of Metavante's ePayments Solutions division, said the number of expedited payments in June topped that of June 2007 by 6% to 10% (he would not provide the total number of expedited payments).

Metavante said that its bank clients typically see 10% to 20% of their customers use the service within the first year after making it available, depending on how it is priced, and 40% of users make more than one payment in the year.

Besides its same-day electronic payment capability, Metavante allows consumers to overnight a paper check to billers, an option that banks charge $15 to $25 to use. Though this costs more than an electronic payment, Mr. Lewis said, "there's a comfort level for consumers" who want to see an online record of a paper check.

Another factor driving expedited payment use is the increasing adoption of paperless bills, Mr. Lewis said. Billers, in an effort to attract consumers to their Web sites, put little information in the e-mail statements they send out. This makes e-mailed bills easier to forget than detailed paper bills, and some people find themselves scrambling to pay them at the last minute, he said.

"When there's not a consistent pattern for consumers, we don't think about it," he said.

Metavante plans to begin offering expedited payments from mobile phones in November, he said.

Last week the CheckFree unit of Fiserv Inc. announced a partnership with M-Com Inc., the U.S. unit of Mobile Commerce Ltd. of Auckland, New Zealand, to provide real-time payments from mobile phones.

Serge van Dam, Mobile Commerce's head of marketing, said this service appeals to consumers who may not pay many bills online. Mobile payment is ideal for "those consumers who typically are worse managers of their cash flow," he said. "The people who are heaviest users of the mobile channel ... can least afford the penalty fees" and would be willing to pay for a less expensive expedited payment to avoid them.

Javelin's Mr. Van Dyke said: "I think this is a sustained opportunity. Banks have so few fee opportunities."