Mark Brousseau
As businesses continue to push for reductions in operations costs and look for ways to support green initiatives, it’s no surprise that more of them are turning to electronic invoice presentment and payment (EIPP) as a solution. EIPP is a hot topic this week at NACHA’s Payments 2011 in Austin, Texas – great timing with Earth Day just a few weeks away.
“The volume of paper required to support traditional invoice and payments processes can be enormous,” said Michael Lane, CEO for EIPP solutions provider Data Impact. “According to NACHA’s PayItGreen Alliance, a firm initiating 260,000 paper payments annually could save significant resources by converting just 20 percent of those payments to electronic. And similar savings can be gained through electronic invoicing as well.”
Data Impact’s electronic invoicing solution allows suppliers to upload invoices and related documents to a secure site, and then customers can access the website and make a payment.
Considering the high amount of paper invoices that are wasted every year, the benefits to electronic invoicing are substantial, Lane said. International Account Payable Professionals (IAPP) and The Association for Work Process Improvement’s (TAWPI) 2011 Account Payable (AP) Automation Study indicates that 90 percent of respondents still receive paper-based invoices in their organization – a situation that Lane says businesses no longer can afford.
With EIPP, companies can solve their excess paper invoice problem while implementing a green solution. Lane said there are several ways e-invoicing support green initiatives:
· Reduced paper processing, printing, and storage
· Decreased duplication of invoices – “You won’t have four copies of the same invoice in four different places,” Lane noted.
· Reduced paper mailing, handling, and postage
“The green factor is obvious with e-invoicing,” Lane said. “But, its real value is streamlining procedures while providing businesses with a major cost reduction in account receivable functions such as invoice delivery, copy invoice and reconciliation.”
What do you think?
Showing posts with label EBPP. Show all posts
Showing posts with label EBPP. Show all posts
Monday, April 4, 2011
Thursday, March 10, 2011
Executives view billing as a utility, not a strategic function
Posted by Mark Brousseau
Despite its critical role in revenue collection and corporate cash flow, billing has apparently become such a systematic function that it is no longer viewed as strategic – even by billing executives themselves.
In fact, according to a survey from Billtrust, fully two-thirds (67 percent) of billing related executives view billing as a utility, while only a third of those polled (33 percent) see billing as strategic. And yet, one out of every four respondents (25 percent) is not confident their bills will get paid on time. The survey points to the growing number of businesses who are missing opportunities for cost savings, accelerated cash flow, customer relationship building and even revenue generation in the billing process.
Billtrust surveyed nearly 40 executives associated with the billing function across a spectrum of North American businesses. The lack of recognition of billing’s role in customer relationships was apparent, as nearly two thirds of those polled (64 percent) said that billing either hurts, or has no impact, on customer service. At the same time, 59 percent of respondents believe their current billing process supports the building of customer relationships.
When asked their highest billing priority, 81 percent said accuracy and 19 percent said timeliness. None of the respondents pointed to cost savings as their top priority. The findings document conflicting perceptions on the role of billing and confusion on the best methods and outcomes related to the billing function.
“When it comes to billing, most businesses focus on the basics,” said Flint Lane, CEO of Billtrust. “Many of the organizations we speak with are unaware of the opportunities that exist in the billing process and don’t even know when their billing is unhealthy. We have seen the symptoms so often that we named the syndrome Chronic Billing Disorder.”
“With a more strategic approach to billing, companies can create cost savings, build better customer relationships and drive revenue growth,” said Lane.
The survey also revealed several other interesting findings on various aspects of the billing process:
... the overwhelming majority of those polled (84 percent) say their bills are generally delivered on-time or ahead of schedule, while 16 percent say their bills are generally delivered late.
... nearly a third of those polled (31 percent) do not feel their bills match the quality standards of their brand.
... nearly 1 in 5 billing executives say they don’t believe their current billing processes have a positive impact on cash flow.
What do you think?
Despite its critical role in revenue collection and corporate cash flow, billing has apparently become such a systematic function that it is no longer viewed as strategic – even by billing executives themselves.
In fact, according to a survey from Billtrust, fully two-thirds (67 percent) of billing related executives view billing as a utility, while only a third of those polled (33 percent) see billing as strategic. And yet, one out of every four respondents (25 percent) is not confident their bills will get paid on time. The survey points to the growing number of businesses who are missing opportunities for cost savings, accelerated cash flow, customer relationship building and even revenue generation in the billing process.
Billtrust surveyed nearly 40 executives associated with the billing function across a spectrum of North American businesses. The lack of recognition of billing’s role in customer relationships was apparent, as nearly two thirds of those polled (64 percent) said that billing either hurts, or has no impact, on customer service. At the same time, 59 percent of respondents believe their current billing process supports the building of customer relationships.
When asked their highest billing priority, 81 percent said accuracy and 19 percent said timeliness. None of the respondents pointed to cost savings as their top priority. The findings document conflicting perceptions on the role of billing and confusion on the best methods and outcomes related to the billing function.
“When it comes to billing, most businesses focus on the basics,” said Flint Lane, CEO of Billtrust. “Many of the organizations we speak with are unaware of the opportunities that exist in the billing process and don’t even know when their billing is unhealthy. We have seen the symptoms so often that we named the syndrome Chronic Billing Disorder.”
“With a more strategic approach to billing, companies can create cost savings, build better customer relationships and drive revenue growth,” said Lane.
The survey also revealed several other interesting findings on various aspects of the billing process:
... the overwhelming majority of those polled (84 percent) say their bills are generally delivered on-time or ahead of schedule, while 16 percent say their bills are generally delivered late.
... nearly a third of those polled (31 percent) do not feel their bills match the quality standards of their brand.
... nearly 1 in 5 billing executives say they don’t believe their current billing processes have a positive impact on cash flow.
What do you think?
Thursday, February 17, 2011
Expect exponential growth for EIPP in 2011
By Michael Lane of Data Impact
In 2010, only 57 percent of business-to-business (B2B) payments were made by check, which is down from 63 percent in 2009 and 74 percent in 2008 (according to the Association for Finance Professionals 2010 Electronic Payment Survey).
This steady decline indicates that businesses are not only looking for, but are finding a more streamlined approach for managing the financial supply chain. As companies become more attuned to the needs of the B2B transaction set, 2011 is expected to be a record breaking year for electronic invoice presentment and payment (EIPP) growth.
Solution providers now recognize that traditional business to consumer models for electronic invoicing and payment cannot accommodate the complex needs of a B2B environment. As a result, the leaders in the EIPP space are providing more robust supporting information at the invoice and payment levels. Documents necessary to support the invoice review and approval process are made available within the platform. Invoice uploads into the customer’s accounts payable platform allow for cost savings and process efficiencies which fosters adoption. More importantly, the lack of remittance details and complexity of reconciliation have been addressed by decoupling the ACH and accounts receivable file information. Auto reconciliation can be achieved with a separate remittance file that is mapped directly into the billing parties accounts receivable platform.
With the past barriers removed, companies of all sizes will more aggressively pursue EIPP platforms in 2011 in order to drive cost savings, accelerate cash and confidently control receivables.
What do you think?
In 2010, only 57 percent of business-to-business (B2B) payments were made by check, which is down from 63 percent in 2009 and 74 percent in 2008 (according to the Association for Finance Professionals 2010 Electronic Payment Survey).
This steady decline indicates that businesses are not only looking for, but are finding a more streamlined approach for managing the financial supply chain. As companies become more attuned to the needs of the B2B transaction set, 2011 is expected to be a record breaking year for electronic invoice presentment and payment (EIPP) growth.
Solution providers now recognize that traditional business to consumer models for electronic invoicing and payment cannot accommodate the complex needs of a B2B environment. As a result, the leaders in the EIPP space are providing more robust supporting information at the invoice and payment levels. Documents necessary to support the invoice review and approval process are made available within the platform. Invoice uploads into the customer’s accounts payable platform allow for cost savings and process efficiencies which fosters adoption. More importantly, the lack of remittance details and complexity of reconciliation have been addressed by decoupling the ACH and accounts receivable file information. Auto reconciliation can be achieved with a separate remittance file that is mapped directly into the billing parties accounts receivable platform.
With the past barriers removed, companies of all sizes will more aggressively pursue EIPP platforms in 2011 in order to drive cost savings, accelerate cash and confidently control receivables.
What do you think?
Will Facebook replace the United States Postal Service?
By Flint Lane of Billtrust
Facebook and the United States Postal Service (USPS) are two organizations that have virtually nothing in common. One is a profitable enterprise that Hollywood is making movies about. The other is a government-run organization losing billions of dollars per year. What, if anything, could they have in common?
I've been thinking a lot lately about what's going to happen with the USPS. It's clear that their business model is broken and without an act of Congress, literally, they'll just continue to lose billions each year. I don't blame the folks that run the USPS, they work hard, but they're stuck with a business model that just doesn't work.
When I do the Billtrust sales pitch for electronic billing, it usually goes something like this: "How much sense does it make for a biller to take an electronic billing feed, print it on paper, put it in an envelope, mail it to me so I can then attach a check and mail it back?" Sounds pretty stupid, right? Well, why are the majority of bills still delivered via the USPS? The answer is actually pretty simple; it's still the only mechanism that can reliably reach everybody.
Below I lay out what a new "electronic post office" has to have in order to replace the USPS and why I think Facebook could easily position themselves for this.
1. Universal Deliverability - Facebook claims 150 millions active US users today and growing rapidly. While certainly not universal, they're certainly getting there with the ability to reach the majority of Americans.
2. Effective Communication Platform - Facebook falls short here quite frankly. Posting a status update is interesting and a great way to stay in touch with friends, but Facebook, in my opinion, has fallen on their face as a communication tool. What Facebook really needs here is a GMail like email interface so that people/businesses could send stuff to your @facebook.com address. Now this certainly would introduce enormous spamming opportunities. Facebook could impose some kind of insignificant email tariff to prevent rampant abuse. I've blogged about this in the past (here). I know most people think they get a lot of paper junk mail, but there is actually an effective tariff in place to limit this, it's called postage. I wouldn't mind receiving some junk email if they went through a system that actually had some controls in place. Charging $0.001 per email wouldn't be unreasonable and would keep out the blatant spammers.
3. Privacy - I don't get myself too worked up about my online privacy because I think the measures that most companies take are far more effective than the offline world. However, there are certainly opportunities for abuse here. I would suggest taking a portion of the tariffs collected from above to pay a third party to monitor privacy on a regular basis.
4. Payments - The majority of mail that people get, that is of any importance, are bills. That's because they require the user to take an action - return a payment. Facebook doesn't have this today but this is not a big effort.
Other have tried to become the universal mailbox. My first company Paytrust did this for bills. Zumbox and EarthClassMail are trying to do this for all other forms of mail. But all three suffer from the chicken and the egg problem. Which is to say that until they have enough users, billers and other mailers don't want to bother enabling electronic delivery to them. And users won't sign up, until they can get a majority of their mail through the channel.
That's why I think Facebook, if they want, is well positioned to do this because they already have the user base. Economically I think it would be a slamdunk. Who else could do this? Maybe Google with GMail but I like Facebook's chances better.
Facebook and the United States Postal Service (USPS) are two organizations that have virtually nothing in common. One is a profitable enterprise that Hollywood is making movies about. The other is a government-run organization losing billions of dollars per year. What, if anything, could they have in common?
I've been thinking a lot lately about what's going to happen with the USPS. It's clear that their business model is broken and without an act of Congress, literally, they'll just continue to lose billions each year. I don't blame the folks that run the USPS, they work hard, but they're stuck with a business model that just doesn't work.
When I do the Billtrust sales pitch for electronic billing, it usually goes something like this: "How much sense does it make for a biller to take an electronic billing feed, print it on paper, put it in an envelope, mail it to me so I can then attach a check and mail it back?" Sounds pretty stupid, right? Well, why are the majority of bills still delivered via the USPS? The answer is actually pretty simple; it's still the only mechanism that can reliably reach everybody.
Below I lay out what a new "electronic post office" has to have in order to replace the USPS and why I think Facebook could easily position themselves for this.
1. Universal Deliverability - Facebook claims 150 millions active US users today and growing rapidly. While certainly not universal, they're certainly getting there with the ability to reach the majority of Americans.
2. Effective Communication Platform - Facebook falls short here quite frankly. Posting a status update is interesting and a great way to stay in touch with friends, but Facebook, in my opinion, has fallen on their face as a communication tool. What Facebook really needs here is a GMail like email interface so that people/businesses could send stuff to your @facebook.com address. Now this certainly would introduce enormous spamming opportunities. Facebook could impose some kind of insignificant email tariff to prevent rampant abuse. I've blogged about this in the past (here). I know most people think they get a lot of paper junk mail, but there is actually an effective tariff in place to limit this, it's called postage. I wouldn't mind receiving some junk email if they went through a system that actually had some controls in place. Charging $0.001 per email wouldn't be unreasonable and would keep out the blatant spammers.
3. Privacy - I don't get myself too worked up about my online privacy because I think the measures that most companies take are far more effective than the offline world. However, there are certainly opportunities for abuse here. I would suggest taking a portion of the tariffs collected from above to pay a third party to monitor privacy on a regular basis.
4. Payments - The majority of mail that people get, that is of any importance, are bills. That's because they require the user to take an action - return a payment. Facebook doesn't have this today but this is not a big effort.
Other have tried to become the universal mailbox. My first company Paytrust did this for bills. Zumbox and EarthClassMail are trying to do this for all other forms of mail. But all three suffer from the chicken and the egg problem. Which is to say that until they have enough users, billers and other mailers don't want to bother enabling electronic delivery to them. And users won't sign up, until they can get a majority of their mail through the channel.
That's why I think Facebook, if they want, is well positioned to do this because they already have the user base. Economically I think it would be a slamdunk. Who else could do this? Maybe Google with GMail but I like Facebook's chances better.
Sunday, November 7, 2010
Consumer Bill Payers Want Incentives To Go Electronic
Posted by Mark Brousseau
Consumers pay a lot of bills, and they pay those bills in myriad combinations of channels and methods. Consumers’ bill pay behavior isn’t a trivial matter—changes in behavior can result in millions of dollars of additional or lost revenue, or millions of dollars in cost savings.
Despite the increasing popularity of the Internet and the emergence of the mobile channel as a way to transact and interact, checks sent through the mail remain the most prevalent method for paying bills in the United States.
Aite Group says the number of bill payments made through the mail will fall just short of 5 billion for 2010, accounting for about one-third of all payments made, whereas payments made at a biller site—including recurring and mobile payments—will account for 23% of all bills paid in 2010.
Looking to the future, however, consumers’ bill pay behavior is very likely to change, Aite Group predicts. Roughly four in 10 consumers say they would change how they pay their bills if they received rewards for paying with a debit or credit card, or received a cash incentive for changing their behavior, the research and advisory firm reports. In addition, the rapid adoption of smartphones will help drive bill pay behavior change over the next three years.
“There’s an emerging segment of consumers—which we call Smartphonatics—that will lead to an increase in the use of the online and mobile channels for paying bills,” says Ron Shevlin, senior analyst with Aite Group. “These young and affluent consumers are chomping at the bit to use their smartphones, and are very likely to change how they pay bills if it becomes easier to do so via mobile. The growth of biller-direct over consolidator, coupled with the projected growth in mobile payments, means an opportunity for bill pay solutions providers to create an industry-leading mobile platform.”
What are you seeing?
Consumers pay a lot of bills, and they pay those bills in myriad combinations of channels and methods. Consumers’ bill pay behavior isn’t a trivial matter—changes in behavior can result in millions of dollars of additional or lost revenue, or millions of dollars in cost savings.
Despite the increasing popularity of the Internet and the emergence of the mobile channel as a way to transact and interact, checks sent through the mail remain the most prevalent method for paying bills in the United States.
Aite Group says the number of bill payments made through the mail will fall just short of 5 billion for 2010, accounting for about one-third of all payments made, whereas payments made at a biller site—including recurring and mobile payments—will account for 23% of all bills paid in 2010.
Looking to the future, however, consumers’ bill pay behavior is very likely to change, Aite Group predicts. Roughly four in 10 consumers say they would change how they pay their bills if they received rewards for paying with a debit or credit card, or received a cash incentive for changing their behavior, the research and advisory firm reports. In addition, the rapid adoption of smartphones will help drive bill pay behavior change over the next three years.
“There’s an emerging segment of consumers—which we call Smartphonatics—that will lead to an increase in the use of the online and mobile channels for paying bills,” says Ron Shevlin, senior analyst with Aite Group. “These young and affluent consumers are chomping at the bit to use their smartphones, and are very likely to change how they pay bills if it becomes easier to do so via mobile. The growth of biller-direct over consolidator, coupled with the projected growth in mobile payments, means an opportunity for bill pay solutions providers to create an industry-leading mobile platform.”
What are you seeing?
Tuesday, October 12, 2010
The Proper A/P Toolkit
By Bruce Bourdon, CPCP
Vice President, Healthcare Channel Sales Manager
U.S. Bank Corporate Payment Systems
Two key challenges face healthcare accounts payable departments today: Shrinking profit margins due to rising costs, and decreased cash flow due to slower collections and reimbursements.
The cash flow pipeline often plugs up due to an inability of the healthcare provider to extend payment terms with its top suppliers. Operational costs, meantime, have been soaring due to the high cost of printing and mailing paper checks, and often re-issuing and re-mailing checks that get lost. Finally, AP staff spent far too much time researching vendor inquiries about the status of the payment they are owed.
If any industry could stand to benefit from going paperless, it’s healthcare. Yet, a 2010 U.S. Bank/IAPP survey showed that 61 percent of all healthcare payments today are made by paper check. A similar survey, this one by PayStream Advisors in late 2009, found that 68 percent of all invoices are traded by paper, and only about 25 percent of all purchase orders are sent electronically to suppliers.
That’s about to change. The U.S. Bank/IAPP survey that showed such a high rate of paper check payments also predicts a 2/3 reduction in check payments and a three-fold increase in use of purchasing cards over the next three years, based on feedback from respondents.
Some may wonder, what is taking the healthcare industry so long to jump on the technology conversion bandwagon? The answer: it is hampered by many of the same roadblocks being experienced by other industries. Namely, perceived external barriers such as limited willingness or capability of suppliers to handle e-payments, and perceived internal barriers such as the high cost of conversion to e-payments or worries about their own capability to manage the transition.
Such concerns are often overblown. The cost of conversion, for example, is dwarfed by the savings realized over time, according to recent studies. To the extent that it’s measured at all, cost-per-paper-invoice can vary from a dollar to over $15 dollars, says the PayStream Advisors survey. But interestingly enough about half the companies surveyed have no idea what it’s costing them to process each paper invoice.
Electronic processing makes the costs much more transparent and easier to measure, therefore making it easier to spot the cost bottlenecks and act upon them. Aberdeen Group has shown that electronic invoice processing shaves $6 to $7 off the cost or processing each invoice. How? By accelerating the approval cycle, reducing the number of lost and missing invoices, reducing the number of “exceptions” and, ultimately, reducing FTE or allowing redirection of work into more value-added activities.
Annapolis Consulting puts it this way: Automation increases ease of use, ease of use increases adoption, adoption increases on-contract spend, on contract spend enhances visibility and visibility reduces wasteful spend. Just as important, visibility enhances leverage when it comes time to negotiate contracts with suppliers.
Today’s payables toolkit brims with options for the healthcare provider, from Electronic Invoice Presentment and Payment (EIPP) to a wide array of paperless e-payment options including commercial cards, virtual or “ghost” card accounts, wire payments and Automated Clearinghouse (ACH). End-to-end automation is both possible and achievable. It’s easier than ever to establish e-payments as the standard for conducting business with your key suppliers.
Vice President, Healthcare Channel Sales Manager
U.S. Bank Corporate Payment Systems
Two key challenges face healthcare accounts payable departments today: Shrinking profit margins due to rising costs, and decreased cash flow due to slower collections and reimbursements.
The cash flow pipeline often plugs up due to an inability of the healthcare provider to extend payment terms with its top suppliers. Operational costs, meantime, have been soaring due to the high cost of printing and mailing paper checks, and often re-issuing and re-mailing checks that get lost. Finally, AP staff spent far too much time researching vendor inquiries about the status of the payment they are owed.
If any industry could stand to benefit from going paperless, it’s healthcare. Yet, a 2010 U.S. Bank/IAPP survey showed that 61 percent of all healthcare payments today are made by paper check. A similar survey, this one by PayStream Advisors in late 2009, found that 68 percent of all invoices are traded by paper, and only about 25 percent of all purchase orders are sent electronically to suppliers.
That’s about to change. The U.S. Bank/IAPP survey that showed such a high rate of paper check payments also predicts a 2/3 reduction in check payments and a three-fold increase in use of purchasing cards over the next three years, based on feedback from respondents.
Some may wonder, what is taking the healthcare industry so long to jump on the technology conversion bandwagon? The answer: it is hampered by many of the same roadblocks being experienced by other industries. Namely, perceived external barriers such as limited willingness or capability of suppliers to handle e-payments, and perceived internal barriers such as the high cost of conversion to e-payments or worries about their own capability to manage the transition.
Such concerns are often overblown. The cost of conversion, for example, is dwarfed by the savings realized over time, according to recent studies. To the extent that it’s measured at all, cost-per-paper-invoice can vary from a dollar to over $15 dollars, says the PayStream Advisors survey. But interestingly enough about half the companies surveyed have no idea what it’s costing them to process each paper invoice.
Electronic processing makes the costs much more transparent and easier to measure, therefore making it easier to spot the cost bottlenecks and act upon them. Aberdeen Group has shown that electronic invoice processing shaves $6 to $7 off the cost or processing each invoice. How? By accelerating the approval cycle, reducing the number of lost and missing invoices, reducing the number of “exceptions” and, ultimately, reducing FTE or allowing redirection of work into more value-added activities.
Annapolis Consulting puts it this way: Automation increases ease of use, ease of use increases adoption, adoption increases on-contract spend, on contract spend enhances visibility and visibility reduces wasteful spend. Just as important, visibility enhances leverage when it comes time to negotiate contracts with suppliers.
Today’s payables toolkit brims with options for the healthcare provider, from Electronic Invoice Presentment and Payment (EIPP) to a wide array of paperless e-payment options including commercial cards, virtual or “ghost” card accounts, wire payments and Automated Clearinghouse (ACH). End-to-end automation is both possible and achievable. It’s easier than ever to establish e-payments as the standard for conducting business with your key suppliers.
Tuesday, May 4, 2010
Group says legislation threatens electronic commerce
Posted by Mark Brousseau
Reps. Rick Boucher (D-VA) and Cliff Stearns (R-Fla.) today unveiled draft legislation aimed at improving online privacy that would impose new rules on companies that collect individual data on the Internet. But technology analysts at the Competitive Enterprise Institute warned that the proposed bill would actually harm consumers and hinder the evolution of online commerce.
“Substituting federal regulations for competitive outcomes in the online privacy arena interferes with evolution of the very kind of authentication and anonymity technologies we urgently need as the digital era evolves,” argues Wayne Crews, vice president for Policy.
“Today, businesses increasingly compete in the development of technologies that enhance our privacy and security, even as we share information that helps them sell us the things we want. This seeming tension between the goals of sharing information and keeping it private is not a contradiction -- it’s the natural outgrowth of the fact that privacy is a complex relationship, not a ‘thing’ for governments to specify for anyone beforehand,” Crews states.
“This legislation flips the proper definition of privacy on its head, wrongly presuming that individuals deserve a fundamental right to control information they’ve voluntarily disclosed to others online. But in the digital world, information collection and retention is the norm, not the exception. Privacy rights, where they exist, arise from voluntary privacy policies. The proper role of government is to enforce these policies, not dictate them in advance,” argues Ryan Radia, associate director of Technology Studies.
“If Rep. Boucher wants to strengthen consumer privacy online, he should turn his focus to constraining government data collection, which poses a far greater privacy threat than private sector data collection. A good starting point would be reexamining the Electronic Communications Privacy Act, the outdated 1986 law that governs governmental access to private communications stored online. Strengthening these privacy safeguards, as a broad coalition of companies and activist groups are now urging, will empower firms to offer stronger privacy assurances to concerned users,” Radia states.
What do you think?
Reps. Rick Boucher (D-VA) and Cliff Stearns (R-Fla.) today unveiled draft legislation aimed at improving online privacy that would impose new rules on companies that collect individual data on the Internet. But technology analysts at the Competitive Enterprise Institute warned that the proposed bill would actually harm consumers and hinder the evolution of online commerce.
“Substituting federal regulations for competitive outcomes in the online privacy arena interferes with evolution of the very kind of authentication and anonymity technologies we urgently need as the digital era evolves,” argues Wayne Crews, vice president for Policy.
“Today, businesses increasingly compete in the development of technologies that enhance our privacy and security, even as we share information that helps them sell us the things we want. This seeming tension between the goals of sharing information and keeping it private is not a contradiction -- it’s the natural outgrowth of the fact that privacy is a complex relationship, not a ‘thing’ for governments to specify for anyone beforehand,” Crews states.
“This legislation flips the proper definition of privacy on its head, wrongly presuming that individuals deserve a fundamental right to control information they’ve voluntarily disclosed to others online. But in the digital world, information collection and retention is the norm, not the exception. Privacy rights, where they exist, arise from voluntary privacy policies. The proper role of government is to enforce these policies, not dictate them in advance,” argues Ryan Radia, associate director of Technology Studies.
“If Rep. Boucher wants to strengthen consumer privacy online, he should turn his focus to constraining government data collection, which poses a far greater privacy threat than private sector data collection. A good starting point would be reexamining the Electronic Communications Privacy Act, the outdated 1986 law that governs governmental access to private communications stored online. Strengthening these privacy safeguards, as a broad coalition of companies and activist groups are now urging, will empower firms to offer stronger privacy assurances to concerned users,” Radia states.
What do you think?
Tuesday, March 23, 2010
More Growth for Online Retail
Posted by Mark Brousseau
Despite entering a more mature phase in its evolution, online retail in both the United States and Western Europe remains poised for a robust period of double-digit growth over the next five years, according to two new forecasts by Forrester Research Inc.
U.S. online retail will grow at a 10 percent compound annual growth rate (CAGR) over the next five years to reach nearly $249 billion by 2014, Forrester predicts. Online retail within the largest European Union nations in Western Europe will grow at an 11 percent CAGR over the same period, hitting €114 billion by 2014.
"Much of the overall retail sector's growth in both the US and the EU over the next five years will come from the Internet," said Forrester Research Vice President and Principal Analyst Sucharita Mulpuru. "To maximize that growth, eBusiness professionals will have to help enable a multichannel strategy that responds to consumers' increased desire to hop between the offline and online worlds and their increasing mobile and social behaviors. The retail innovators over the next five years will demonstrate customer enablement across all touchpoints, not just via a PC-based Web browser."
Despite consumers' increasing use of the Web to research products before purchasing, most retailers fall short on offering a seamless cross-channel experience. According to Forrester's data, while 82 percent of US online consumers are satisfied with buying experiences that began and ended in a store, satisfaction drops to 61 percent for consumers who began their research online and purchased in a store.
The Forrester online retail forecasts for the US and the EU include business-to-consumer sales excluding auto, travel, and prescription drugs. The European Union forecast encompasses 17 Western European nations.
Highlights of the study include:
... In the United States, Web shopping will account for 8 percent of total retail sales by 2014.
...Three product categories dominate online retail: apparel, footwear, and accessories; consumer electronics; and consumer hardware, software, and peripherals. Together, those categories represent more than 40 percent of total online retail sales in the US.
... By 2014, 53 percent of total retail sales in the United States will be influenced by eCommerce as consumers increasingly use the Internet to research products before purchasing.
What do you think?
Despite entering a more mature phase in its evolution, online retail in both the United States and Western Europe remains poised for a robust period of double-digit growth over the next five years, according to two new forecasts by Forrester Research Inc.
U.S. online retail will grow at a 10 percent compound annual growth rate (CAGR) over the next five years to reach nearly $249 billion by 2014, Forrester predicts. Online retail within the largest European Union nations in Western Europe will grow at an 11 percent CAGR over the same period, hitting €114 billion by 2014.
"Much of the overall retail sector's growth in both the US and the EU over the next five years will come from the Internet," said Forrester Research Vice President and Principal Analyst Sucharita Mulpuru. "To maximize that growth, eBusiness professionals will have to help enable a multichannel strategy that responds to consumers' increased desire to hop between the offline and online worlds and their increasing mobile and social behaviors. The retail innovators over the next five years will demonstrate customer enablement across all touchpoints, not just via a PC-based Web browser."
Despite consumers' increasing use of the Web to research products before purchasing, most retailers fall short on offering a seamless cross-channel experience. According to Forrester's data, while 82 percent of US online consumers are satisfied with buying experiences that began and ended in a store, satisfaction drops to 61 percent for consumers who began their research online and purchased in a store.
The Forrester online retail forecasts for the US and the EU include business-to-consumer sales excluding auto, travel, and prescription drugs. The European Union forecast encompasses 17 Western European nations.
Highlights of the study include:
... In the United States, Web shopping will account for 8 percent of total retail sales by 2014.
...Three product categories dominate online retail: apparel, footwear, and accessories; consumer electronics; and consumer hardware, software, and peripherals. Together, those categories represent more than 40 percent of total online retail sales in the US.
... By 2014, 53 percent of total retail sales in the United States will be influenced by eCommerce as consumers increasingly use the Internet to research products before purchasing.
What do you think?
Thursday, July 31, 2008
Using the Internet for Utility Payments
Posted by Mark Brousseau
An interesting article written by Bob Craig at Energy Central on another benefit of using the Internet for billing:
Internet Channel Can Help Utilities Ease the Sting of Delinquent Payments
07.21.08
Robert Craig, Executive Vice President and General Manager, eCommerce Services, Online Resources Corporation
Across the United States, personal financial stability is decreasing as the “perfect storm” of record-high energy, food and healthcare costs collide with spillover from the deepening mortgage crisis to push millions of families into financial trouble.
In April 2008, my company conducted a survey of U.S. households which found that 25 percent have at least one bill 30 or more days overdue, and that 52 percent of households are finding it harder to meet their financial obligations than they did twelve months ago -- an increase from 43 percent who said the same in October 2007.
Americans are increasingly being forced to prioritize their bill payments by creating a “delinquency budget,” ranking which bills they would be most likely to pay if they had to choose.
It should come as no surprise that the mortgage bill tends to be the one that most households (98%) are most likely to pay.
Utilities Hit by Spiking Delinquencies
With consumers prioritizing their bills, utility companies are seeing an increased risk of delinquencies. Our survey showed that approximately nine percent of households are at least 30 days delinquent on their utility bill. That number is up significantly from October 2007. Just this week, the National Energy Assistance Directors' Association reported that utilities across the country are seeing record numbers of shutoffs.
The “perfect storm” of colliding financial pressures on consumers’ budgets hits a utility company particularly hard during the spring and summer months. As winter moratoriums end and warm-weather energy bills hit their peak, utilities face significantly increased costs. These encompass having to send severely delinquent accounts to collections and hire additional crews to physically shut off service -- which, these days, means ever higher fuel costs for those crews to do the job.
Add to that the additional cost burden of having to collect deposits for households now classified as high-risk when service is restored and having to, again, dispatch crews to physically turn on service.
And, sadly, these high-risk households may be cyclically delinquent at various times of the year, requiring repeats of this costly exception handling. Unlike other service companies, such mortgage lenders, wireless telecommunications or credit card issuers, utilities cannot just charge off debt and walk away from high-risk accounts. They must provide service universally to every household in their region.
It is no wonder that the words “delinquency” and “collections” typically generates stress and challenges for utilities.
Advent of “Virtual Collections”
Traditionally, managing delinquent accounts has meant an increase in staff with the accompanying challenges related to hiring, training and compliance, or an increase in dollars spent outsourcing debt collection to first-party collection agencies. Both of these are a significant burden for most utilities
Online payments for accounts that are current have been around since the late 1990s. Web technology specifically created for the collection of delinquent payments is a relatively new concept that only a few billers in recurring industries, such as utilities, have deployed, thus far.
When consumers are faced with the consequences of collections, our research strongly suggests that delinquent account holders are much more willing to resolve the situation via the privacy and convenience of the web, through what we refer to as “virtual collections.” In fact, 28 percent of consumers said they would be more likely to pay a past due bill if they had the ability to settle the debt via a web site, whereas only about half that number was likely to respond to a phone call or letter from a collection agent.
Web-based collections has proven to be a cost-efficient and effective tool in improving delinquency roll rates for early stage delinquent accounts, and increasing payments from later-stage delinquent accounts. It has also helped eliminate or soften many of the negative aspects related to managing these situations with consumers and has given account holders more convenience to resolve their delinquent status.
This is of particular importance, I believe, for utilities, because they must provide universal service and have, in effect, customers for life. Providing as positive an experience as possible, as consumers cycle all the way from delinquency and collections and back into good standing, just might give utilities an edge in competing effectively for those consumers’ on-time payments during good times and bad.
Adoption of web-based collections by delinquent account holders is increasing as users become more comfortable remitting payments online.
Account holders who make a promise-to-pay during a web session keep their promises—the average payment commitment experienced a 94% keep rate.
A key benefit to web-based collections is convenience—22% of logins occurred on Saturday or Sunday, or during off-hours when regulations or hours of operation prevent contact by billers, creditors and traditional collection agencies.
Overcoming Skepticism about New Collection Technology
From January to May 2005, we set up a pilot study with a large bank to test whether people would pay their delinquent bills at a web site offering them multiple ways to “self-cure” or resolve their debt online without assistance from a live agent. The bank was initially skeptical.
First, it questioned whether delinquent customers would even come to a web site. Second, management doubted that delinquent account holders, whom the bank had been unable to reach by phone, mail or an 800 number, could be convinced to pay their overdue payments simply because they could go to a web site to do so.
The study was a “champion-challenger” test where the bank randomly selected 10% of its delinquent accounts and changed how they were treated. The only variable in how these accounts were treated was the promotion and notification of the financial advisory nature of the “virtual collector” web site for those customers to make payments, learn about potential payment programs or perhaps settle out their accounts.
The bank realized a loss reduction of 310 basis points, which would translate to an annualized savings of $3.1 million for an organization with $50 million in delinquent balances.
Other studies by our company have shown that companies who implement specialized web sites for resolving delinquent accounts have seen positive results.
About 20% of the users who self-cure online do so during hours that companies’ collection operations, whether in-house or outsourced, are not traditionally open.
Almost half the users have not been successfully contacted by the company in the prior 6 months, if ever, and two-thirds of them are late-stage delinquent accounts.
Web users have higher rates and amounts of payment against higher average balances.
Consumers’ choice of the web increases over time: the web has about twice the activity today that it did a year ago.
Web site visitors paid a dollar amount three times more than the portfolio average and paid four times more often than the portfolio average.
Utilities, other Billers Out of Sync with Consumer Preferences
Only 8% of billers -- including utilities -- offer a web site that goes beyond accepting payments to allow consumers to cure their delinquency. This means that they are missing out on a significant opportunity to improve how they meet consumer preferences for making delinquent payments, while saving money at the same time.
As more consumers find themselves in unfamiliar territory, being delinquent on bills they have always paid on time, utilities should embrace the opportunity to adopt new collections practices that minimize credit losses and ease the pain for consumers.
Innovative technology cannot prevent people from facing tough economic choices between which bills to pay this month. But its effective use can limit the repercussions and costs for the companies that serve them.
An interesting article written by Bob Craig at Energy Central on another benefit of using the Internet for billing:
Internet Channel Can Help Utilities Ease the Sting of Delinquent Payments
07.21.08
Robert Craig, Executive Vice President and General Manager, eCommerce Services, Online Resources Corporation
Across the United States, personal financial stability is decreasing as the “perfect storm” of record-high energy, food and healthcare costs collide with spillover from the deepening mortgage crisis to push millions of families into financial trouble.
In April 2008, my company conducted a survey of U.S. households which found that 25 percent have at least one bill 30 or more days overdue, and that 52 percent of households are finding it harder to meet their financial obligations than they did twelve months ago -- an increase from 43 percent who said the same in October 2007.
Americans are increasingly being forced to prioritize their bill payments by creating a “delinquency budget,” ranking which bills they would be most likely to pay if they had to choose.
It should come as no surprise that the mortgage bill tends to be the one that most households (98%) are most likely to pay.
Utilities Hit by Spiking Delinquencies
With consumers prioritizing their bills, utility companies are seeing an increased risk of delinquencies. Our survey showed that approximately nine percent of households are at least 30 days delinquent on their utility bill. That number is up significantly from October 2007. Just this week, the National Energy Assistance Directors' Association reported that utilities across the country are seeing record numbers of shutoffs.
The “perfect storm” of colliding financial pressures on consumers’ budgets hits a utility company particularly hard during the spring and summer months. As winter moratoriums end and warm-weather energy bills hit their peak, utilities face significantly increased costs. These encompass having to send severely delinquent accounts to collections and hire additional crews to physically shut off service -- which, these days, means ever higher fuel costs for those crews to do the job.
Add to that the additional cost burden of having to collect deposits for households now classified as high-risk when service is restored and having to, again, dispatch crews to physically turn on service.
And, sadly, these high-risk households may be cyclically delinquent at various times of the year, requiring repeats of this costly exception handling. Unlike other service companies, such mortgage lenders, wireless telecommunications or credit card issuers, utilities cannot just charge off debt and walk away from high-risk accounts. They must provide service universally to every household in their region.
It is no wonder that the words “delinquency” and “collections” typically generates stress and challenges for utilities.
Advent of “Virtual Collections”
Traditionally, managing delinquent accounts has meant an increase in staff with the accompanying challenges related to hiring, training and compliance, or an increase in dollars spent outsourcing debt collection to first-party collection agencies. Both of these are a significant burden for most utilities
Online payments for accounts that are current have been around since the late 1990s. Web technology specifically created for the collection of delinquent payments is a relatively new concept that only a few billers in recurring industries, such as utilities, have deployed, thus far.
When consumers are faced with the consequences of collections, our research strongly suggests that delinquent account holders are much more willing to resolve the situation via the privacy and convenience of the web, through what we refer to as “virtual collections.” In fact, 28 percent of consumers said they would be more likely to pay a past due bill if they had the ability to settle the debt via a web site, whereas only about half that number was likely to respond to a phone call or letter from a collection agent.
Web-based collections has proven to be a cost-efficient and effective tool in improving delinquency roll rates for early stage delinquent accounts, and increasing payments from later-stage delinquent accounts. It has also helped eliminate or soften many of the negative aspects related to managing these situations with consumers and has given account holders more convenience to resolve their delinquent status.
This is of particular importance, I believe, for utilities, because they must provide universal service and have, in effect, customers for life. Providing as positive an experience as possible, as consumers cycle all the way from delinquency and collections and back into good standing, just might give utilities an edge in competing effectively for those consumers’ on-time payments during good times and bad.
Adoption of web-based collections by delinquent account holders is increasing as users become more comfortable remitting payments online.
Account holders who make a promise-to-pay during a web session keep their promises—the average payment commitment experienced a 94% keep rate.
A key benefit to web-based collections is convenience—22% of logins occurred on Saturday or Sunday, or during off-hours when regulations or hours of operation prevent contact by billers, creditors and traditional collection agencies.
Overcoming Skepticism about New Collection Technology
From January to May 2005, we set up a pilot study with a large bank to test whether people would pay their delinquent bills at a web site offering them multiple ways to “self-cure” or resolve their debt online without assistance from a live agent. The bank was initially skeptical.
First, it questioned whether delinquent customers would even come to a web site. Second, management doubted that delinquent account holders, whom the bank had been unable to reach by phone, mail or an 800 number, could be convinced to pay their overdue payments simply because they could go to a web site to do so.
The study was a “champion-challenger” test where the bank randomly selected 10% of its delinquent accounts and changed how they were treated. The only variable in how these accounts were treated was the promotion and notification of the financial advisory nature of the “virtual collector” web site for those customers to make payments, learn about potential payment programs or perhaps settle out their accounts.
The bank realized a loss reduction of 310 basis points, which would translate to an annualized savings of $3.1 million for an organization with $50 million in delinquent balances.
Other studies by our company have shown that companies who implement specialized web sites for resolving delinquent accounts have seen positive results.
About 20% of the users who self-cure online do so during hours that companies’ collection operations, whether in-house or outsourced, are not traditionally open.
Almost half the users have not been successfully contacted by the company in the prior 6 months, if ever, and two-thirds of them are late-stage delinquent accounts.
Web users have higher rates and amounts of payment against higher average balances.
Consumers’ choice of the web increases over time: the web has about twice the activity today that it did a year ago.
Web site visitors paid a dollar amount three times more than the portfolio average and paid four times more often than the portfolio average.
Utilities, other Billers Out of Sync with Consumer Preferences
Only 8% of billers -- including utilities -- offer a web site that goes beyond accepting payments to allow consumers to cure their delinquency. This means that they are missing out on a significant opportunity to improve how they meet consumer preferences for making delinquent payments, while saving money at the same time.
As more consumers find themselves in unfamiliar territory, being delinquent on bills they have always paid on time, utilities should embrace the opportunity to adopt new collections practices that minimize credit losses and ease the pain for consumers.
Innovative technology cannot prevent people from facing tough economic choices between which bills to pay this month. But its effective use can limit the repercussions and costs for the companies that serve them.
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