Building the business case for EBPP

The first step in building a business case for the implementation of electronic bill presentation and payment (EBPP) is to look at the business drivers specific to your organisational goals. What do you want to achieve with this project? What result would convince your management of the value of implementing an EBPP solution or part thereof?

Cost reduction is always a good place to start when building a business case. In many IT projects, the actual reduction in operating costs can be difficult to measure because they relate to human efficiency and other soft benefits. But in the case of delivering your documents electronically rather than via the traditional print and post method (the first step towards EBPP), you can achieve tangible and measurable savings.

Click-throughs to your Web site can provide a new source of Web traffic and added marketing opportunities.

Alison Wright, sales and marketing director, The E-mail Corporation

For a headline indication of the financial benefit - look at the hard costs of producing and delivering an invoice or statement. This would include the cost to print, collate, fold, insert and post or courier a physical document. If you can get to a figure for this process, you can compare that to the operating costs of an electronic delivery process. This comparison should be sufficient to spark considerable interest from your financial director.

Then add in the soft costs that would be reduced, such as the administrative tasks associated with the paper process, the risk of human error and the effort required to deal with the inefficiencies of the traditional process. This includes, among other aspects, the turn-around time for `return to sender` issues to be addressed and outdated records to be updated. Much of this can be improved in terms of efficiency by the automation and reporting achievable through the electronic process.

Then add back the costs of setting up an electronic delivery system, as well as the soft costs of establishing new processes associated with enabling and supporting this new channel. These must also be considered to arrive at a true return on investment (ROI) result.

At this stage you also need to look at the percentage of your customers that have e-mail and/or Web access. While electronic delivery of statements and invoices might be hugely cost-effective when compared to the paper channel, if you can only realise this cost benefit on an insignificant percentage of your customer base, then it may not be a worthwhile project.

According to the Goldstuck Report: Internet Access in South Africa, 2002, "only 1 in 15 South Africans had access to the Internet at the end of 2001, and this will improve only marginally to 1 in 14 at the end of 2002". That may be a low figure when compared globally, but if you look at the total number of South Africans connected - 3.1 million by the end of 2002 - there`s a lot of savings to be made by using that connectivity for processes like e-billing.

Doing a rough cost estimate comparison between traditional billing delivery processes and an e-billing should be sufficient to get the support of the financial gurus in your organisation.

Now let`s get the marketing director excited. Historically, billing was viewed as a mundane but necessary task in the running of a business, typically managed by people stuck away in a basement somewhere. But nowadays, with the advent of customer relationship management (CRM), the billing process is an important `customer touch point` that can be used by the marketing department to communicate with, and cross-sell to, existing customers.

The first question to ask is whether your specific customer base will perceive electronic delivery as an improvement in customer service. This depends on how Internet-savvy your customers are, and their readiness to utilise the online channel.

If the profile of your customer indicates that they are firstly connected, and secondly relatively comfortable online, then the option to receive invoices and statements by e-mail will be perceived as an improvement in customer service. The introduction of this option will result in an increase in customer satisfaction with your service.

If your customer base is not yet online, but will be in the future, you will need to include an extended education and adoption period, which will affect your ROI calculation.

The traditional print and post invoicing method has, over the past few years, matured into an opportunity to market to existing customers. This includes `statement stuffers` and other sales/marketing material inside the statement envelope.

Moving these marketing messages onto the electronic channel will not only save money, but will open up all sorts of functionality that the paper method cannot deliver. Design features and colour no longer spike your production price. Click-throughs to your Web site can provide a new source of Web traffic and added marketing opportunities. Reporting on the activities of your customers, (ie where did they click therefore what are they interested in), can be hugely valuable to your marketing efforts.

You can even take this a step further and design your marketing efforts in such a way as to measure the sales achieved through the cross- and up-selling efforts directly associated with e-billing. That will give you another figure by which to justify establishing the electronic channel.

Electronic delivery of invoices could turn out to be a revenue-generating exercise, increasing your product and service penetration in your existing customer base.