Ensuring the Hand-Off from Service Bureau to Print Bureau

More hands in the pot can mean miscommunicated goals and frustration. What should telecommunications companies have in SLAs to eliminate surprises at the beginning and end of billing cycles?

“The bill is not junk mail; it is your link to your customer, so you don’t want it on someone else’s stock, and you don’t want it getting there late,” proclaims Tim Pasonski, director of systems management at KMC Telecomm, a New Jersey-based CLEC that provides voice, data, Internet and multimedia applications.

As one of the nation’s fastest-growing facilities-based CLECs, KMC has developed outsourcing partnerships with Datamatx and Billing Concepts that KMC claims enables it to focus more on competitive goals, as evidenced by its recent foray into the broadband data market with high-bit-rate digital subscriber line (HDSL). Outsourcing offers companies a chance for focused billing solutions with minimal integration, low cost of entry and low peripheral support (see sidebar “A Seamless Solution, page 56).

“Recurrent billers traditionally spend as much as a $1.50 per customer, per month, to issue statements and receive payments,” says Read Ziegler, chief marketing officer for Derivion, a service bureau focused on mid-tier service billers. According to Derivion, recurrent billers with 100,000 customers easily spend as much as $2 million per year issuing paper bills to customers.

This amount, Ziegler claims, can be reduced by as much as 75 percent if service providers are both aggressive in negotiating an outsourcing agreement and incorporate new technologies such as EBPP into their outsourcing model. He even notices a rise in outsourcing from larger billers, which traditionally turned to software and in-house solutions. “These companies realize that $250,000-plus just isn’t worth it. You get the OK on a billing model from your CFO, and three months later it’s obsolete.”

However, the lofty benefits of outsourcing are not always fully realized, as billers often fail to spell out expectations and outsourcers often fail to be honest about capabilities. Consequently, billers are often confronted with superfluous costs, unmet deadlines or inaccurate bill composition within each billing cycle.

Part of the problem is that service bureaus, which handle processing and rating, often outsource the print and mail functions to yet another party. If billers don’t have a handle on these triumvirates, outsourcing can lead to questionable print quality, incorrect invoices, watermarks, logos and bleeds.

Reasonable Expectations

Regardless of what roles the service bureau or print vendors try to take on, it is ultimately the biller’s responsibility to ensure all the revenues are correct and all invoices on the right track.

“Outsourcers have to learn they can’t be all things to all people, and billers have to realize they can’t be all things to all people” notes Mike Bonagura, president of OSG Billing Services in Englewood, N.J., which targets personal communications companies like TSR Wireless and Cbill with 24-hour turnaround billing cycles.

One of the common pitfalls Bonagura sees is lack of research in choosing partners. “You have to assess the experience of the vendor in invoice, print and mail, as well as their experience within telecommunications,” says Bonagura. “Then you have to set the expectation from the beginning and maintain it.”

Since these outsourcers are the last gateway before bills hit customer sites, they are taking on a biller’s most important item—its cash flow. Consequently, they need to do whatever possible to establish confidence with billers.

OSG, for instance, tries to preclude human error in its billing processes. “We only do electronic highlight color printing with red, green or blue highlight computers, and will not purchase paper with logos from carriers,” Bonagura notes. “We leave no room for an operator to put the wrong paper in the machine and print invoices off someone else’s paper, so we eliminate that possibility.”

Derivion sets up detailed project plans and review periods so there are no surprises.

“Since we are an EBPP-based firm,” Ziegler says, “our billers generally have the end goal to establish gateways for e-commerce. In the SLAs we outline how e-commerce will serve as a launch pad for offerings from enhanced customer care to targeted cross-selling.”

AccuDocs, which provides on-demand publishing, direct marketing, document processing, information storage and EBPP, gets clients to sign off on forms before handing the designs over to programmers. “We devise a comprehensive business requirements document that outlines formatting of the billing feed, printing of the invoices, postage costs and delivery times,” says Martin Steber, AccuDocs president and CEO. “On the front end, we’ve developed methods for having the client sign off on each component—where the logos should go, which pages are duplex, and so on. After we test it, the customer signs off again.”

The company uses verification modules and business rules, which acknowledge and track bits and bytes the biller transmits to the host system. “If a telco has 20 billing cycles, one of which is much larger than the others, we make sure the variance isn’t too high or low by checking if invoices weren’t cut off or doubled up,” says Steber. “Too many companies focus on who to blame if something goes wrong. Rather, they should focus on a team-based atmosphere where parties involved possess the expertise to pull together a document, and verify all data has been transmitted when and where it’s supposed to.”

Datamatx, a print and mail outsourcer, controls all aspects of processing—starting at data acquisition and ending with the U.S. Postal Service. It makes use of on-line product menus where customers check off yes-or-no questions on bill composition, timing for delivery and the distribution channel. “This eliminates any miscommunications or ambiguity,” says Harry Stephens, CEO and president of Datamatx. “The closer we get to billers’ goals, the more we can help them achieve what they want, and the more they can help us tweak our product.”

Once the SLA is completed, service and print bureaus should offer mock-ups or on-line review of invoices and run customers through production lines to make sure they’ve met customer expectations.

Outsourcer-to-Outsourcer

It is imperative that service bureaus and printers establish SLAs as well. ITDS puts together “master contracts” that outline timing, print quality and project management. “If we have a spec for an invoice, it is at this stage that the print vendor can come back to us with choices: you have ‘x’ amount of time and ‘y’ amount per bill, and ‘z’ cost per bill for the print characteristics on this production line,” says Mike Gillette, general manager for ITDS’ office in Champaign, Ill.

Other than hashing details out with customers, Gillette notes, it is in the best interest of the service bureau to ensure it doesn’t outstrip the capacity of its preferred print and mail service providers. ITDS holds periodic meetings with OTS and VestComm to keep abreast of the capacity and flexibility of their production lines. “We want to make sure that our print vendors are flexible enough to switch billing cycles from one production line to another,” says Gillette.

To improve reliability and timeliness, ITDS is working with Output Technology Solutions to get billing feeds to the print side before they’re approved on the billing side. That, Gillette contends, would save hours in the billing process. “That doesn’t happen miraculously. We don’t want to shoot ourselves in the foot. If the print side uses the original file after a problem is found in the original, that could be a problem.” But he believes that “once controls are in place, we could have a mechanism to get the file stored there early.”

Despite such precautions, problems are inevitable. “Unfortunately, an exact time of when billing gets to OTS is unknown to us,” he says. “It is supposed to be the same day every month, but there are some issues in terms of invoice issuance we are still hashing out with account managers and project managers.”

Some outsourcers attribute part of that problem to billers’ lack of understanding of production schedules. “At the first and last day of every month, it’s like an anaconda trying to swallow a pig,” observes Stephens at Datamatx. As a result, he says, outsourcers must educate clients about the benefits of migrating to weekly or even daily billing cycles. “We need our customers to understand volumes and why it’s difficult to guarantee quick turnaround at certain times of the month.”

If a print or mail house handles bills for telecommunications, credit unions and utility companies, huge volumes will be processed at the first and last of the month. “It is important that billers understand the outsourcer can’t satisfy all the unique needs and demands of 200-plus customers, all of whom want things differently and immediately,” says Bonagura. He urges that agreements specify the consequences of the customer’s actions.

Datamatx heeds that advice, and spells out the repercussions of changing turnaround time. “We help billers understand that even if it’s just an hour earlier or later, it can make the difference of an entire day in the billing cycle,” notes Stephens.

But no matter how accurate the production timeline, all involved have to be prepared for problems. “As a result, outsourcing should be a relationship, not just a contract,” Stephens says. “If a bad file is transmitted to us, we can’t say, ‘Oh, you screwed up, so we can’t print it now.’ Rather, we try to correct the problem. And if you don’t complete your part on time, then you can’t expect us to complete ours; it’s a partnership.”

Visibility

By having visibility of where the job is—in transit from the customer site to the service bureau, or being formatted—billers stand a better chance to head off problems.

For example, if sequence numbers are broken or inconsistent, the billers should make sure their partners will check whether statements are coming off someone else’s invoices, about to be sent to the wrong address.

OSG, for instance, commits to giving customers viewable file formats within four hours, if they can transmit sequential data. “They will have a viewable file format to download to their location for on-line review, so they can determine if they rated correctly,” notes Bonagura.

Datamatx will track sequence numbers with a 3-of-9 bar code, and a scanner attached by the inserter. “This will be a big improvement over traditional methods, where people watched sequences by reading the addresses of outgoing envelopes. We now will have software that will put up a red flag if sequence numbers are broken,” says Stephens. That quality check will virtually eliminate the chance of sending statements to the wrong addresses. “The whole system will shut down until the source of the broken sequence is found. Then we reinsert and start over again,” he says.

To further confirm a file was received in full, Datamatx re-totals invoices with internal software that matches the amount with that of the bills.

Case Study: A Seamless Solution

When KMC Telecomm switched billing systems June 20, it made sure its first billing cycle under Billing Concepts and Datamatx ran smoothly. “In our SLA, we tried to think of everything that could possibly go wrong and worked through it with all parties involved,” says Tim Pasonski, KMC’s director of systems management.

KMC outlined how Datamatx would receive and print image files, and hashed out details about everything from physical printing of bills to stuffing the envelopes and sending them out to subscribers. The SLA spelled out that Datamatx’ quality assurance group would be fully responsible for content, integrity and accuracy.

For example, “They are in charge of making sure that if 50,000 pages are supposed to be there, that 50,000 are transmitted,” says Pasonski. “They verify that if we have10,000 customers, 10,000 bills are printed.”

As a result, Datamatx looks at files to ensure print images are correct, and examines line and record counts of image files to verify all are received at the fulfillment center. If there is a break in the transmission, a red flag goes up and the process is stopped until the problem is found.

KMC wanted most activity to be handled in San Antonio, where Billing Concepts is located. Test bills are run to ensure all the necessary data is present and interfacing up to the taxing and rating systems. Once Billing Concepts does a backup of the system, it starts bill calculations, generates print images, and pushes them through a T1 line into a secure folder.

Datamatx then pulls the files through a firewall and handles the rest of the process in Atlanta. It extracts the files, formats them through a postal database, and prints them. After checking the print image files for quality assurance, it stuffs envelopes, takes care of meter and postage, then sends the bills out to subscribers. E-mail confirmations go out to all parties involved, breaking down files by city for marketing purposes and by number of images for accounting purposes.

“This has worked quite well,” Pasonski says. “We’ve had no disconnects go unnoticed, because the size of file and record counts are verified in the Datamatx network prior to any processing.”

To further increase bill accuracy, a 12-member KMC team worked for 90 days with Datamatx to centralize records into one system, alleviating some of the burden on KMC’s resources, which were dealing with multiple systems. “The database and rating information is more accurate, now that we merged nine print image files into one,” says Pasonski.

By December KMC will take advantage of on-line bill review through Datamatx’ partner, Derivion. “It will be less expensive if we can send these huge files over the Internet over FTP,” acknowledges Pasonski. “In one data stream, we will parse out to Derivion what the customer wants for EBPP,” says Harry Stephens, Datamatx CEO and president. He is participating in information sharing sessions with Derivion and KMC to hash out bill presentation.