Cost versus value – who wins?

By Laura Knox, inside sales team leader, DataSource Mobility

In today’s ever challenging economy it’s no surprise that we see technology customers focusing more and more on cost ... and while I am all about getting a bargain and finding the right solution at the right price for my clients, I often find myself explaining that cost does not always equal value.

Much more goes into the concept of value than the upfront purchase price of any solution. You have to think about potential downtime if the equipment breaks, repair costs, replacement if your workers refuse to use the machine because of poor performance, replacement cost if a device fails, upgraded warranty fees (most low cost solutions come with little or no warranty coverage) and the time any IT staff must spend to keep the devices working properly. So, if we are looking at overall value rather than upfront value the emphasis moves from simply finding something cheap to finding something that is high quality.

Now, most people with a healthy knowledge of IT matters already understand that inferior parts and inferior quality plus lack of service are what equal the attractively low price point of generic industry devices – and they are very anxious not to get stuck trying to support devices that will need constant attention and repair - but try explaining this to a person without IT experience who is tasked with finding a top quality solution at a “bargain bin” price and things get tricky.

So, for those of us who are not IT aficionados but need to make smart decisions for the companies we own or are employed by, the question becomes; how do I tell a high quality device from all the other options? Below is a list of questions that I strongly encourage these folks to ask before purchasing any equipment from a potential vendor.

$ vs. ROI vs. TCO

1) What is it made out of?

2) What type of service and support is included in the cost being quoted (and what will you have to pay extra for)?

3) What is the typical lifespan of the device?

4) Are parts and labor outsourced or does the manufacturer actually make the product?

5) Has it passed any level of rugged certification?

6) What is the typical failure rate for the device?

What do you think?

Slower Distributed Capture Growth?

By Mark Brousseau

Panelists at TAWPI’s Capture Conference admitted that they were surprised by the slowdown in growth of distributed capture solutions reported by TAWPI’s 2009 Document Management Study.

“When we looked at the report, we thought it was a very interesting statistic,” said Andrew Pery, chief marketing officer at Kofax, said during the panel discussion this morning in Ft. Lauderdale. “Based on our own experiences in the market, both distributed capture and remote capture are proliferating and there is increased adoption for both because of the benefits they provide.”

“The study shows that global and Fortune 500 companies are the primary users of distributed capture solutions with smaller firms using it in a more limited basis,” said Dana Showers of Capture Sage.

KeyMark CEO Jim Wanner told attendees that the recession has undoubtedly played a role in distributed capture “not taking off.” But Wanner said there is another issue within organizations that may be inhibiting growth: “There is a huge disconnect between the individuals responsible for scanning and the individuals making decisions on MFP devices. These individuals frequently don’t communicate effectively on how to solve the challenge of capture within the organization.’

The results of the TAWPI aside, the panelists saw growth ahead for distributed and remote capture.

“Distributed capture will continue to grow,” predicted Ken Kriz, manager of strategic alliances for AnyDoc Software. “But it can’t grow at its previous pace because it cannot overtake centralized scanning. Some organizations will utilize distributed capture, and some of them will not.”

“The use of Citrix has really taken off, which will help distributed processing,” Showers added.

Pery noted that despite the popularity of ATM banking, 63 percent of respondents to a recent study said they prefer to interact with a bank branch employee – illustrating that the ability to deploy remote capture solutions and multi-function devices are becoming more strategic. “We’re also seeing expanded use of capture at the fringes of the enterprise, such as with field agents,” he said.

Going forward, the panelists saw mobile phones as another remote input stream for images.

“High-production users won’t use cell phones to scan documents in the back office, but they might be one of the inputs into a high-production system,” Kriz told conference attendees.

What do you think? Post your comments below.

Gaining Control Over Stranded Payments

Significant changes in the payments landscape and the intense growth of Remote Deposit Capture (RDC) over the last three years has triggered the necessary expansion of RDC from capturing check deposits only to providing the capability of capturing retail and wholesale remittance payments, as well.

That’s according to Sam Golbach, senior product manager for WAUSAU Financial Systems.

These changes have created new payment processing workflows and allow financial institutions and remittance processors (lockbox providers, corporate billers) to offer new, creative solutions to customers and in-house operations for capturing “stranded payments,” Golbach told me.

Stranded payments can be defined as payments received at remote locations via walk-in, over-the-counter, mail or other delivery methods. Goldbach said the steps to process, post and deposit are different than the central remittance processing site or sites. “Today, remittance solutions can be tailored based on customer needs or an organization’s internal processes to address the challenges that stranded payments pose,” he said.

To capture remote payments, remittance processors can combine remote and central payments into a single workflow with aggregated reporting, A/R file updates and archives, which creates a compelling business case when one considers the revenue-generating benefits realized through remote capture such as lower processing costs, improved workflow efficiency and funds availability and reduced bank accounts and sweeps, Goldbach explained.

He said early adopters are enjoying an innovative offering that is quickly gaining momentum and driving demand for other remittance processors to take notice and invest in remote capture technology. While vertical growth has been most evident in the healthcare segment, this is just the tip of the iceberg. Interest from brokerage, insurance and property management firms is quickly taking shape, Goldbach noted.

“For lockbox providers, this is a solution that continues to open doors to new markets, enhancing existing customer relationships, driving additional fee revenue, expanding market share and increasing deposits to succeed in today’s marketplace,” he concluded.

Is your lockbox offering corporate remittance capture?

Post your comment below.

Remote Remittance Capture Grows

By Mark Brousseau

While some lockbox providers have been disappointed by what they see as sluggish demand for their remote remittance capture solutions, Chris Rohner (chris.rohner@fnis.com), national remittance sales at Jacksonville, Florida-based Fidelity National Information Services (FIS), says the demand and volume has met her company’s expectations. FIS has about 20 financial institutions doing some form of remote remittance capture, Rohner told me.

The thing to keep in mind, Rohner notes, is that distributed capture isn’t for every lockbox client. “It works well when the customer has remote locations with walk-in payments, and they don’t want to be bothered completing the transaction,” Rohner said. “A good example of this is tax processing, where a municipality might have a lockbox, but also accepts walk in payments. At the end of the day, they want to receive one file and one set of reports. This is ideal for distributed capture.” In addition to municipalities, Rohner said FIS is seeing strong demand for its distributed capture solution from utilities and property management firms.

And she expects interest to pick up as FIS rolls out flatbed scanning capabilities for supplemental remittance documents. Today, the company only captures checks and coupons, with MICR and OCR read technology. It also offers a remote deposit capture solution to automate check deposits to a bank, and a consumer capture solution, as well. “We do a lot of due diligence before recommending a distributed capture solution,” Rohner told me.

How would you describe demand for remote remittance capture?

Post your comment below.

Remote Deposit Capture Delivers

By Mark Brousseau

A whopping 78 percent of respondents to a recent TAWPI Question of the Week say that their organization is receiving payback on its remote deposit capture deployment. Only 6 percent of the 86 respondents said they weren't receiving payback, while 16 percent said they didn't know. How is your organization faring with remote deposit capture? E-mail me at m_brousseau@msn.com.

Moving Money-Treasury Management Group looks to Tackle Remote Capture

by Harvey Spencer contributing editor and published in TAWPI's TODAY Magazine click here for a complimentary subscription to TODAY.

Back in 1980 when I worked for NCR in Dayton, OH, I was responsible for implementing one of the early PC based Treasury Workstations. This software kept track of a company’s investments and then dialed the corporation’s bank accounts before the Treasurer arrived. By the time he arrived at 8:00 am, he had a complete cash position laid out and could make investment decisions faster. We were going to sell this to the banks so that they could sell them to their customers. As my Beta site, I installed this into NCR’s Treasury Department – then a $5 billion company – and the Treasurer reckoned that he gained two basis points in the market through having faster access to this information a lot of money. This all came back to me as I contemplated the impact of Check 21 and the push to install Remote Capture systems by Banks in corporations. As with Remote Capture, the banks thought that since the Treasury Workstation would give better control to their customers, they could create a closer liaison with them by selling these systems. This proved fallacious as large corporations, such as NCR, wanted to control their own relationships and did not want the banks’ systems in their Treasury areas. We are now seeing the same scenario played out –the banks want to put remote capture stations into corporations.

They cite the major reasons as being:

_ Improved Float Elimination of transportation/courier costs
_ Branch Account Consolidation
_ Fewer Processing Errors
_ Convenience and Safety

These are clear benefits, and from the bank’s viewpoint it saves
major costs, since their customer is effectively performing the
expensive proof and encode operation instead of them. However,
the problem with this approach is that it ignores the needs of the
corporation. What happens if the company wants to change its
major banking supplier? Must it return its Remote Capture system?
While I think that Remote Capture as supplied by Banks will be
successful in the SMB market, I doubt that it will fly in large corporations
over the longer term. As with the Treasury Workstation,
large corporations will want their own systems and will use the X9
standards to deliver standardized images to the banks they choose
or to a 3rd party service.

Clearly, they will vary this in order to:

_ Reduce costs
_ Reduce bank accounts
_ Optimize cutoff times
_ Improve float

The banks will compete fiercely on this, but they now have a different playing
field from the traditional paper based one. For instance at – a Kansas bank – told me that they had extended their Check 21 today value cutoff to 6:00 pm Central
Time. Well that is fine if you on the East Coast, but if you are in California,
it is 4:00 pm – not much better than traditional times and a West Coast bank who makes their cut-off at 6pm gives East Coast companies up until 9:00 pm to deposit their check images. Services are appearing to facilitate this flexibility and decide how best to clear items. For example CheckFree introduced a service to enable automated clearing decisions to be made in order to leverage the new NACHA BOC rules which allow a small quantity of business checks to be cleared through lower cost ACH. SWIFT – used by banks to enable the secure movement of transactions internationally which corporations could only access through bank partnerships announced an enhanced Corporate Access capability named SCORE, which allows publicly listed corporations to electronically interact with a closed group of participating financial organizations. It is slowly reducing banking control. In addition, Remote Capture effectively means that a two-step operation must be performed:

1. Scan and balance the payments sending the check images
and cash letter to the bank
2. Post the payment to the AR system

It seems that it would be much more effective to integrate the posting with the capture. Two solutions I saw were Remitco, which is offering customized solutions to enable this integration, and, Creditron, a small Canadian that company has integrated into Microsoft Dynamics (formerly Great Plains). Trintech, specializing in transaction verification, is expanding into integration. From the perspective of TAWPI members, this seems like an emerging opportunity. On one side we have Invoice or AP processing starting to be installed – these systems, particularly when linked with procure-to-pay solutions allow far better and faster management of outgoing payments. On the other side we have Remittance or AR which is changing with the advent of remote capture, ARC and Check 21 and is becoming more integrated and distributed. Together the Corporate Treasurer can gain better and faster control over both the outgoing and incoming cash. At present, most Treasurers get end of day cash reporting – but more advanced companies are getting intra-day reporting. The business future will require real-time reporting but that is some way off according to Bent Benjaminsen, Senior Vice President Strategic Initiatives at Avantgard, a subsidiary of Sungard Systems. Linking AP and AR systems provides potentially huge benefits to major corporations and it seems that many AP and AR inputs will continue to be paper based. Like the Treasury Workstations of old, the bank controlled Remote Capture solution will not hold up in
major corporations, but its adoption will open doors to systems from those companies who capture paper and integrate with the AR systems as well as order-to-cash. But I predict that those who can provide integration of both AP and AR systems automation will be the big winners.