Escaping the Paper Trap

Business telephone invoicing is a complicated process. A single commercial account maygenerate hundreds of thousands of calls in a single month. Companies have stringent auditing and verification requirements for invoicing in order to minimize employee misuse of wireless and long-distance privileges and to prevent fraud. In addition, customers usually need to allocate these expenses to appropriate business units within their companies, so they prefer to have invoices broken down by department, division and/or group.

When thousands of calls are involved, meeting these demands is not an easy task. The ability to satisfy sophisticated invoicing requirements can mean the difference between winning and losing a large and profitable service account.

Delivering account-winning customer service is further complicated because many commercial customers are demanding billing via electronic data interchange (EDI). They want to receive the benefits of electronic commerce (e-commerce) such as streamlined auditing and processing as well as errors.

EDI Consolidated Invoice Previously, there was no EDI document sophisticated enough to handle the complex requirements of these commercial accounts. The existing EDI invoice document could not handle the multiple line items and breakdown requirements for customers in the wireless industry. Service providers were focusing on marketing initiatives, network build-out and fraud prevention instead of developing a robust EDI invoice to meet user requirements.

But now carriers are starting to address the commercial billing issue by using the consolidated service invoice (the 811 EDI document). With EDI billing, an invoice is sent in a standardized, machine-readable format directly to the customer's computer. The EDI document also can be sent via a commercial e-commerce value-added network service provider (VAN or VASP). When a VAN or VASP is used as an intermediary, the invoice is placed in an electronic mailbox and stored until the customer retrieves it electronically. Once received in the customer's computer, assuming the proper systems are in place, the invoice can be audited, verified and broken down automatically by internal cost centers at the department, division or group level.

In an integrated EDI program, the required invoice-management processes are performed instantaneously. Manual handling is necessary only for non-compliant exceptions, which are referred out of the system automatically and passed to the appropriate individual electronically. All of this means time and cost savings for the customer. Because EDI is a non-labor-intensive process, businesses can re-assign staff to more challenging and productive work.

The EDI consolidated service invoice is especially valuable in complex billing situations because some customers want their wireless bills broken down by department, phone number or call detail. Currently, government agencies are taking advantage of the consolidated service invoice. Four years ago, federal government procurement rules mandated that Federal Telecommunications Services use EDI service orders and EDI billing for telephone service. Now, the government requires EDI for wireless invoices as well.

Many other large organizations have implemented this document with their service providers. For example, some major wireless carriers in the Northwest are sending this invoice to their top commercial accounts. One reason that carriers are choosing this option is because the EDI invoice transaction can protect your bottom line. Recently, a major landline telephone company implemented this document with more than 100 large- and medium-size customers. The carrier estimates that the consolidated service invoice document saves it $14 million per year because of improved productivity, elimination of paper handling and elimination of payment lags. Such savings are equally available to wireless carriers.

The electronic consolidated service invoice also strengthens trading relations, enhances customer-service levels and can improve your position in this highly competitive industry.

Financial E-Commerce To reap additional benefits from e-commerce, wireless carriers can implement financial e-commerce with the consolidated service billing. Although the customer derives the greatest rewards from its implementation, closing the loop electronically with financial e-commerce delivers substantial advantages to the carrier.

Financial e-commerce involves using the EDI electronic payment order/remittance advice and electronic funds transfer (EFT), or the automatic transferal of money from one bank account to another. With EFT, no paper documents are issued, so there are no checks to be lost, forged or stolen. In addition, users don't have to worry about forgetting to send payments or finding time to make bank deposits.

There are many possible configurations for financial e-commerce in the wireless industry. Customers can send EDI payment orders to their banks electronically. The customer's computer system can be configured so that once the consolidated service invoice has been audited and verified, the payment order can be generated automatically, without human intervention. The transmission can be sent directly or through a VAN or VASP.

When the bank receives the payment order, it transfers the specified funds to your bank. ETF uses the banking industry's Automated Clearinghouse, and the information surrounding the funds transfer is sent in standardized electronic formats. Once the funds have arrived in your account, you are alerted electronically with another payment order, used as a remittance advice.

Occasionally, customers object to EFT. These objections typically involve float. But experienced e-commerce users have found that float isn't an issue as the customer and service provider work together for a mutually rewarding financial e-commerce arrangement.

Financial e-commerce benefits the customer in several ways. Because the payment always is made automatically on a scheduled date, there are no late payments and no penalties. The customer saves time and labor because there is no need for accounts payable personnel to prepare paper checks manually. As a result, productivity is enhanced, and the costly errors that often accompany manual processes are eliminated.

There are even greater benefits for the carrier. You can optimize cash flow and management because you will know, in advance, when and how much money will be arriving in the bank account. You will experience fewer late payments, payment errors and bad debts. With fewer late-payment penalties levied to customers, trading relationships improve, becoming partnerships in the truest sense of the word. Because the data received from the bank goes directly into your internal computer system, the company eliminates the time, labor and errors that surround re-keying.

Other E-Commerce Solutions Some wireless carriers and customers are implementing other e-commerce solutions: the EDI service order, the EDI service-order acknowledgment, the EDI service-order change and the EDI service-order-change acknowledgment.

The customer uses the service order to order wireless service, such as a phone line, voice mail or call waiting. In most EDI applications, the service order is the first electronic document to be implemented; hence, many large corporations are familiar with this transaction and are capable of sending it to vendors.

The carrier sends a service-order acknowledgment as a turnaround document. It recognizes the order and confirms availability of the requested services.

The service-order change is used to modify the new order. For example, if the customer has ordered voice mail via a service order and has learned from the service-order acknowledgment that voice mail is unavailable, the customer may send a service-order change to request call waiting instead.

The service-order-change acknowledgment is sent from the carrier to the customer. It recognizes the modification and confirms availability if a service has been ordered.

Typically, carriers implement these solutions after the invoice and financial e-commerce are in place, even though they fall at the beginning of the buying cycle. Because of the important benefits they carry, these EDI documents merit inclusion in a company's e-commerce program. If a customer needs wireless service immediately, the service order and its accompanying documents substantially reduce waiting times because the orders are received into and processed by the carrier's computer instantaneously. Like other e-commerce solutions, the service order, service-order acknowledgment, service-order change and service-order-change acknowledgment eliminate the labor, paper shuffling and errors associated with manual processing. They improve productivity and provide a better audit trail for both parties. These four documents completely close the business loop so that the entire buying cycle, from ordering through payment, is handled electronically.

Implementation Challenges Despite the many rewards, there are challenges with implementing an e-commerce solution. Many carriers do not have an experienced staff to implement and maintain e-commerce and EDI, which makes it difficult to handle certain complex EDI documents such as consolidated service invoice. The invoice is a complicated transaction with nine hierarchical levels. Therefore, some inexperienced carriers have trouble installing in-house EDI implementation.

Another challenge involves mapping, or linking EDI to the wireless provider's internal business applications. Mapping the invoice is particularly rigorous because of the document's complexity. Carriers that want to establish a direct e-commerce connection have to build a communications gateway for EDI. If there are multiple trading partners, the gateway may need dedicated lines and modem pools to operate around the clock.

In addition, carriers need highly robust connectivity. Enormous electronic files will be involved because of the amount of data contained in the invoice. Some files can be gigabytes long, requiring T3 phone lines. But most wireless carriers only have a T1 line. If a T3 phone line is present, it probably is being used for other purposes. In addition, carriers need frame relay or asynchronous transfer modes so that transmission can occur at a rate of 300Mb/s.

With these challenges in mind, some carriers are deciding to outsource EDI processes to a commercial e-commerce VAN or VASP. The VASP will have the expertise needed to implement even the most complex EDI transactions, relieving the carrier of the need to hire or train its own staff. The VASP can assist in mapping EDI to the carrier's business applications or can provide software to accomplish the mapping function. It also will handle all connectivity issues and will have the robust technology that huge EDI documents require.

E-Commerce of the Future Businesses are recognizing that e-commerce applications such as EDI and EFT are inevitable. As more wireless carriers implement e-commerce, electronic billing solutions will continue to increase competitive advantage in the industry. E-commerce will become a competitive necessity. Carriers taking a pro-active approach to implement e-commerce now are positioning themselves for a leadership role, while companies taking a reactive position may find themselves left behind as lonely paper pushers.

Winter and Bright are director and marketing manager, respectively, for the Sterling Commerce Telecommunications and Electronics Industry Commerce Business Division. You can reach them through the company web site at www.stercomm.com.

E-commerce offers several advantages over paper billing for wireless customers:

* Improved productivity

* Easier auditing of employee expenses

* Easier verification via the customer's internal computer system

* Easier internal cost allocation

* Elimination of re-keying and other manual effort

* Elimination of paper shuffling

* Time saving

* Fewer late-payment penalties.

For wireless providers, the benefits of e-commerce invoicing include:

* Improved productivity

* Elimination of re-keying and other manual efforts

* Time saving

* Faster payment

* Fewer errors

* Accurately estimated revenue dates

* Improved cash-flow forecasting

* Fewer bad-debt experiences.

As computer services reach mass-market penetration rates, service providers are finding that electronic billing makes life easier for everyone involved, especially the customer. International Billing Services (IBS) is just one of many vendors taking steps to help carriers provide electronic billing options. IBS' Electronic Billing Solution enables you to send electronic bills and statements to your company web site, or to electronic bill consolidation web sites. And thanks to a recent partnership agreement with NETdelivery, IBS has the ability to harness invited push technology using the Electronic Delivery Management (EDM) solution. This technology allows automatic delivery of personalized electronic statements to any customer's PC. Customers can install client software on their PCs to automatically log on to the Internet to retrieve bill and statement information. They can view, analyze, organize and pay bills without being logged on to the Internet.

IBS and NETdelivery are setting out to prove the usefulness of electronic billing through a pilot program based on EDM technology later this year. This pilot program will involve several IBS billing customers.