Perhaps never in the history of commerce have businesses been required to adapt so fast to changing conditions as those driven by the introduction of the internet. Of the world's six billion inhabitants, over 1.9 billion use the internet. Conditioned by the convenience of social networking, online shopping, and instant access to information of every conceivable kind, the "wired" generation expects the business world to keep up, in the form of tools individuals can use to manage interactions with the businesses they patronize. That individual expectation crosses over into business-to-business interactions, putting pressure on IT departments to provide instant resolution of billing or other customer issues so that their clients can keep up with end customer demands.
Just as ATMs and online banking have overtaken face-to-face interaction with a teller, self-service portals and web-based technologies such as Electronic Invoice Presentment and Payment (EIPP) have become increasingly important tools leveraged by companies looking to retain ever-more sophisticated customers and lower the overall cost of accounting operations. But even with increased acceptance of online services, companies should not take a "build it and they will come" approach to EIPP implementation. Active encouragement of widespread customer adoption of such tools remains a critical factor in deriving maximum benefit from these cost-saving technologies.
Meeting Customer Expectations with EIPP
As Facebook, Twitter, and the millions of emails sent daily have proven in spectacular fashion, the advantage of the internet age is the ability to connect people--and businesses--at many levels, instantaneously, at low cost. Paper invoices and call-center resolution cost 2-50 times as much as self-service resolution and electronic invoicing.
In addition, failure to capitalize on the growing acceptance of internet technologies to manage or enhance all aspects of the customer relationship is to disregard the powerful influence of the web and its distinct advantages in speed, cost and interaction over "snail mail" and paper invoices that require manual handling at multiple stages of the Order to Cash (OTC) process. With each "touch," the chance of error increases and time is added to the cycle, delaying payment and affecting cash flow. At the same time, paper invoices are inaccessible to customer service representatives attempting to answer questions from unhappy customers, negatively impacting revenue in the loss of customer loyalty and goodwill.
EIPP is a web-based technology that automates and streamlines the business process through self service, shortening the time it takes to collect on invoices, a metric measured as Days Sales Outstanding (DSO). Reducing DSO improves cash flow as well as the customer experience and cuts the cost of customer support. EIPP allows businesses to manage vendor and customer relationships in ways that increase efficiency, provide wider and faster access to information, and reduce time, labor hours, and money spent on the entire OTC process.
Quite aside from the very real reduction in the cost of ink and paper for hard-copy invoices and postage costs, companies who use EIPP offer their customers choices that encourage loyalty and extend relationships. In Genpact's experience, customer retention is one of the biggest drivers of overall business impact, no matter the type of process improvement. Implementing EIPP to meet customer expectations of convenience, speed, and easy management of their business transactions can therefore be a key factor in preventing customers from taking their business to another company that does offer the customer experience they want.
Genpact's experience with a particular client demonstrates this point very well. Faced with customer rebellion over multiple invoices for various services provided by the company's several business lines, this client instituted Genpact's EIPP solution to produce a single, integrated invoice for all services, easily tracked by the particular asset that accumulated the charges. This proved to be a "win-win" for both the client and its customers. Genpact's client was able to eliminate hundreds of thousands of manually-produced paper invoices, reduce errors, and lower costs. The client's customers were able to instantly track assets with higher maintenance costs, helping them to reduce their own operating expenses. By capitalizing on the flexibility EIPP offers in creating customized invoices, Genpact's client gained a competitive advantage over rivals still invoicing by business line while winning a great deal of customer goodwill and continuing revenue.
Winning Customer Acceptance
There are few technical obstacles for most companies to implementing a web-based invoicing system. Modern business is nearly 100% "wired", with reliable access to the internet at speeds conducive to online transactions. Devices ranging from PCs to smart phones allow customers ready access to their accounts. Larger companies especially, juggling millions of dollars in costs and hundreds of thousands of invoices per year, have every incentive to shift to a more efficient system now that technology supports it. Inevitably, however, not all businesses (or their customers) will be equally acceptant of a shift to EIPP. Worries over data security, a reluctance to budget for the required technology, or resistance to changing well-established procedures can all make senior managers hesitant to implement an EIPP system. There are steps that can be taken, however, to encourage customer participation that ultimately will bring significant advantage to both biller and payer.
Know the Needs of Your Customer
No two customers are the same when it comes to business needs. Why, therefore, assume that all customers will embrace or reject EIPP for the same reasons?
Before implementing EIPP, it is well to understand the customer's current approach as well as their use of and comfort level with internet technologies. Older companies with a stable work force may offer greater resistance to changing long-established processes, demand specialized invoices, or prove uncomfortable with giving up paper invoices or relying entirely on an electronic system that could become unavailable at inconvenient times.
Fortunately, EIPP provides a great deal of flexibility in addressing such concerns as creating invoices that provide a branded look or information of specific value. Overall, surveys conducted with customers have shown that EIPP features of interest to customers fall into two general categories:
- Features that streamline reconciliation (the process of receiving, approving, and paying an invoice)
- Features that improve access to billing data such as supporting documents and scanned images of checks or invoices
Adapting your own EIPP system to address customer preferences in these areas can greatly improve adoption rates. Likewise, understanding how customers view the advantages of EIPP will provide insight into their readiness to adopt it or do business with a supplier who does. Companies who see value in EIPP are more likely to select business partners who invoice using EIPP over those with more cumbersome systems.
Focus on Internal Adoption First
"Eat what you sell" is especially apt with regard to EIPP adoption. Companies should successfully implement EIPP internally and ensure all personnel are comfortable with it prior to attempting to persuade vendors and customers to get on board. Because EIPP provides visibility into invoicing from end to end, sales and customer service representatives can readily answer questions without referring them to busy billing department personnel, an easy way to gain customer goodwill and deepen relationships. Incentivizing employees to learn and use the system, such as providing cash incentives to enroll customers, is a good way to serve the overall goal of increased efficiency and reduced DSO.
Constantly Raise EIPP Awareness with Customers
Every time a customer contacts the business with a question presents an opportunity to promote the use of self-service portals to obtain answers. Understand how your customers and business partners resolve their own billing issues, whether that is by a call center, the sales representative, or email. A business can encourage adoption of self-service electronic invoicing by providing appropriate reminders at every contact point, such as on-hold messages to raise awareness of alternate, self-service means of obtaining answers; scripts for customer service representatives to use after successfully resolving the customer's issue by telephone; or auto-responder acknowledgements to emails.
Make it Easy to Use
Modern customers have become conditioned to speed and ease of use in online transactions because businesses have learned the painful lesson that
complexity drives people away. Efforts to encourage use of EIPP should include making it as simple as possible to enroll in the system and for enrolled users to obtain useful information from it. Ensure that current and relevant information is readily available regarding billing data. Customers have no incentive to use the system if they cannot access the information they need to resolve their questions or complete their transaction.
Encourage Adoption through Active Marketing
Before customers can participate in the supplier's new EIPP system they must first be made aware it exists. As part of the implementation strategy, a company implementing EIPP should plan to actively market it to customers. Discounts, offers made on invoice envelopes, customer training sessions, and notices on customer portals and corporate websites can all be effective in raising awareness and encouraging participation. These should be accompanied by clear directions and easy, click-through enrollment from the portal. Taking the lead in helping customers train their personnel to use the new system can help ensure that they see benefits rather than obstacles to adoption.
Efficiency Adds Up to Revenue
In hundreds of customer engagements, Genpact has seen the dramatic and
positive business impact of lowering DSO. EIPP provides a powerful tool for reducing DSO by automating the process, eliminating manual touch points where errors occur, and providing speedier resolution of billing errors and customer questions. For one company, EIPP implementation provided $2.5MM in initial annual savings that grew to $25MM per year, with an additional $1.5MM per year in postage savings, an achievement touted by the company's CFO as "Our highest ROI project of the year."
Reducing end-to-end costs for producing, tracking, and processing invoices is only one component of the benefits gained by implementing EIPP. As technology continues to advance, providing more and easier access to information, expectations are raised among customers that can never be lowered short of some catastrophic failure of the entire internet. With the pressure on to have answers to any customer question at employees' fingertips, businesses may find that implementing tools such as EIPP is not so much a matter of choice but of survival. In highly competitive environments, vendors may find themselves shut out of contracts because their customers no longer want to deal with paper. Customers may demand self-service portals rather than require incentives to use them. In either case, both biller and payer will benefit from the flexibility, cost savings, and comprehensive approach to invoice management offered by EIPP.
|
|
Editor
|
.png)
|
|
|
|||||||||||