Posted by Mark Brousseau
The ultimate goal of many small business owners is to see their products on the shelves of major retailers. In order to automate the transmission and receipt of any number of business documents—including purchase orders, remittance advice, invoices, advance shipping notices, hang tags, labels, and catalogue updates—many suppliers and retailers use EDI, or Electronic Data Interchange. However, EDI is Greek to most small businesses and very difficult to perform internally without significant expenditures of money and manpower.
In addition, suppliers that fail to submit automated business transactions according to retailer specifications are faced with pricey penalties known as “charge backs.” For the supplier, these chargebacks can result in fines in the tens or even hundreds of thousands, and irrevocably damage business relationships. For the consumer, this botched paperwork could mean those red open-toe Ferragamo pumps won’t be available for summer and Tickle Me Elmo will be AWOL for Christmas.
Fortunately, dedicated EDI providers can help small businesses automate this complex process, solve compliance issues, improve trading partner relationships, and focus on core competencies, all while reducing business expenses.
“While the manual workload required for non-EDI vendors is prone to errors, delays, and steep overhead costs, a dedicated EDI provider can be an invaluable asset for small businesses,” says Thomas J. Stallings, CEO of EasyLink Services International Corporation.
Stallings offers the following recommendations for small businesses thinking about choosing an EDI provider:
… Educate yourself about EDI, what it is, how it functions, and what it means for your business.
… Research the depth of the provider’s retail relationships, and the number of pre-existing EDI templates they have on file. (Retailers use fields in different documents in different ways. These individual templates, called “maps,” are what differentiates automated business documents for Wal-Mart from, say, Sears.)
… Make certain your provider is equipped with redundant backup that achieves 100 percent compliance.
… Ensure your provider keeps abreast of industry changes. (For example, about four years ago, several retail giants gravitated away from VAN-based EDI transmissions in favor of a new, secure protocol called AS2.)
“Electronic Data Interchange helps bring small business products to the shelves of some of the nation’s largest retailers,” Stallings says.
Showing posts with label electronic. Show all posts
Showing posts with label electronic. Show all posts
Friday, May 23, 2008
Wednesday, April 2, 2008
The Economy And Lockbox Demand
By Mark Brousseau
The recent economic volatility has got many people wondering whether lockbox providers are seeing a change in demand. To find out, I asked three lockbox industry veterans.
John Mintzer (john.d.mintzer@citizensbank.com), vice president at Citizens Bank, said interest in outsourced remittance processing continues to be steady even during the most recent economic volatility.
“Remittance processing is similar to the gaming industry in that the demand for remittance services doesn’t necessarily retrench or diminish during difficult economic times,” Mintzer explained. “However, the comparison stops there. While the client of the casino takes on more risk in the pursuit of wealth – capital – the remittance processing client is looking to reduce risk in the pursuit of protecting its capital.”
Customers with in-house lockboxes continue to evaluate whether it makes more sense to outsource, Mintzer told me. “There is significant appeal to outsourcing, because it simplifies the budgeting process by boiling the expense down to a per item basis. This eliminates the need to worry about changing labor costs, software and hardware upgrades, and the significant expense associated with business continuity.”
Steven Nugent (steven.nugent@firstdata.com), director, product management, at First Data Corp. doesn’t believe that economic factors have influenced the market’s interest in outsourcing as much as the ever-increasing unit cost per item due to electronic migration. “Companies have historically measured the value proposition of an outsourced lockbox against internal pressure to achieve margin goals,” Nugent told me. “It would surprise me if most in-house processors weren’t contemplating outsourcing prior to the latest economic downturn.”
Ron Victor (ronald.j.victorjr@jpmchase.com), vice president, Receivables Product Management for JPMorgan Chase, said his bank is seeing a decline in B2B check volumes of approximately 4 percent in the first quarter. “In my opinion, the key factors are the economic downturn, remote capture adoption [which flows into a separate P&L at JPMC] and electronic payment adoption.”
Victor added that the economic downturn certainly places a greater focus on intra-day collaboration (exceptions repair, data augmentation, invoice matching), straight-through processing, and remote deposit capture. “One key thing we have found is that the on-line user experience and ease of browser use are important to customer satisfaction,” he said.
Nugent also sees a stronger focus among billers on working capital management. “Value-added services designed to decrease time-in-process, such as intra-day exceptions processing and remote payment capture, take center stage in almost every conversation we have,” Nugent said. “Many of the payments processed through these channels carry a disproportionately higher dollar average. Image cash letter has become a standard for accelerating the back end.”
Mintzer, who will be a panelist with Nugent and Victor at TAWPI’s Payments in Transition conference this month in Las Vegas, added that his bank’s existing remittance customers continue to focus on line item processing charges. Some wholesale lockbox customers, as an example, are evaluating whether they can transition to retail lockbox services to reduce per item costs. “In some cases, this can work,” Mintzer said. “But there are many factors that need to be considered, including the return rate of the remittance coupon and the ability of the customer to absorb the upfront programming charges,” he explained.
What are you seeing? Post your comments.
The recent economic volatility has got many people wondering whether lockbox providers are seeing a change in demand. To find out, I asked three lockbox industry veterans.
John Mintzer (john.d.mintzer@citizensbank.com), vice president at Citizens Bank, said interest in outsourced remittance processing continues to be steady even during the most recent economic volatility.
“Remittance processing is similar to the gaming industry in that the demand for remittance services doesn’t necessarily retrench or diminish during difficult economic times,” Mintzer explained. “However, the comparison stops there. While the client of the casino takes on more risk in the pursuit of wealth – capital – the remittance processing client is looking to reduce risk in the pursuit of protecting its capital.”
Customers with in-house lockboxes continue to evaluate whether it makes more sense to outsource, Mintzer told me. “There is significant appeal to outsourcing, because it simplifies the budgeting process by boiling the expense down to a per item basis. This eliminates the need to worry about changing labor costs, software and hardware upgrades, and the significant expense associated with business continuity.”
Steven Nugent (steven.nugent@firstdata.com), director, product management, at First Data Corp. doesn’t believe that economic factors have influenced the market’s interest in outsourcing as much as the ever-increasing unit cost per item due to electronic migration. “Companies have historically measured the value proposition of an outsourced lockbox against internal pressure to achieve margin goals,” Nugent told me. “It would surprise me if most in-house processors weren’t contemplating outsourcing prior to the latest economic downturn.”
Ron Victor (ronald.j.victorjr@jpmchase.com), vice president, Receivables Product Management for JPMorgan Chase, said his bank is seeing a decline in B2B check volumes of approximately 4 percent in the first quarter. “In my opinion, the key factors are the economic downturn, remote capture adoption [which flows into a separate P&L at JPMC] and electronic payment adoption.”
Victor added that the economic downturn certainly places a greater focus on intra-day collaboration (exceptions repair, data augmentation, invoice matching), straight-through processing, and remote deposit capture. “One key thing we have found is that the on-line user experience and ease of browser use are important to customer satisfaction,” he said.
Nugent also sees a stronger focus among billers on working capital management. “Value-added services designed to decrease time-in-process, such as intra-day exceptions processing and remote payment capture, take center stage in almost every conversation we have,” Nugent said. “Many of the payments processed through these channels carry a disproportionately higher dollar average. Image cash letter has become a standard for accelerating the back end.”
Mintzer, who will be a panelist with Nugent and Victor at TAWPI’s Payments in Transition conference this month in Las Vegas, added that his bank’s existing remittance customers continue to focus on line item processing charges. Some wholesale lockbox customers, as an example, are evaluating whether they can transition to retail lockbox services to reduce per item costs. “In some cases, this can work,” Mintzer said. “But there are many factors that need to be considered, including the return rate of the remittance coupon and the ability of the customer to absorb the upfront programming charges,” he explained.
What are you seeing? Post your comments.
Friday, November 16, 2007
Online Bill Payment Pays Off
By Mark Brousseau
For financial institutions, integrating online banking and bill payment has the potential to reduce operating costs, expand cross-selling and up-selling capabilities, and increase consumers' interactions through the online channel, according to CheckFree Corp.
Online banking customers visit their financial institutions' sites an average of 11.2 times per month, according to the 2007 Consumer Bill Payment Survey, conducted by Harris Interactive with the Marketing Workshop, and sponsored by CheckFree. However, customers who use both online banking and bill payment services visit their financial institutions' sites 13.4 times and those who use electronic bills to receive and pay their bills visit the online banking sites an average of 15.1 times, according to the same survey.
Today, online banking and bill payment exist as separate applications on many financial institution websites -- meaning banks have a ready opportunity to improve their bottom line.
What do you think? E-mail me at m_brousseau@msn.com.
For financial institutions, integrating online banking and bill payment has the potential to reduce operating costs, expand cross-selling and up-selling capabilities, and increase consumers' interactions through the online channel, according to CheckFree Corp.
Online banking customers visit their financial institutions' sites an average of 11.2 times per month, according to the 2007 Consumer Bill Payment Survey, conducted by Harris Interactive with the Marketing Workshop, and sponsored by CheckFree. However, customers who use both online banking and bill payment services visit their financial institutions' sites 13.4 times and those who use electronic bills to receive and pay their bills visit the online banking sites an average of 15.1 times, according to the same survey.
Today, online banking and bill payment exist as separate applications on many financial institution websites -- meaning banks have a ready opportunity to improve their bottom line.
What do you think? E-mail me at m_brousseau@msn.com.
Sunday, November 11, 2007
Shifting Online Behaviors
By Mark Brousseau
In a keynote presentation entitled "Thinking Beyond Tomorrow" at TAWPI's Payments Automation: Beyond Capture & Clearing Conference last week in Florida, Sanjiv Sanghvi, president and CEO of Wells Fargo HSBC Trade Bank, noted that megatrends such as electronic payments are accelerating, and provided several examples of shifting online behaviors and interests:
Against this backdrop, Sanghvi told the audience that in order for financial services providers to survive in the emerging electronic payments environment (where more payment choices are coming), they must listen to their customers, and keep new product offerings simple ("adopt then adapt"). He also advised financial services providers to remember that technology is the enabler, not the end state (just like financial services). What do you think? E-mail me at m_brousseau@msn.com.
In a keynote presentation entitled "Thinking Beyond Tomorrow" at TAWPI's Payments Automation: Beyond Capture & Clearing Conference last week in Florida, Sanjiv Sanghvi, president and CEO of Wells Fargo HSBC Trade Bank, noted that megatrends such as electronic payments are accelerating, and provided several examples of shifting online behaviors and interests:
- 158 billion text messages were sent in 2006
- 8.4 percent of U.S. households are wireless-only
- 74 percent of single Internet users in the U.S. have taken part in at least one online dating-related activity
- More than 100,000 marriages a year result from people meeting on an online dating service
- 10 percent of cell phone users age 18 to 34 have "texted" someone out of their romantic lives
- MySpace is second only to Yahoo! in the U.S. market in terms of page views
Against this backdrop, Sanghvi told the audience that in order for financial services providers to survive in the emerging electronic payments environment (where more payment choices are coming), they must listen to their customers, and keep new product offerings simple ("adopt then adapt"). He also advised financial services providers to remember that technology is the enabler, not the end state (just like financial services). What do you think? E-mail me at m_brousseau@msn.com.
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