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E-Billing: First Step Toward E-Business

By Michael Vizard Print this article Print

Eliminating paper bills can help provide a clearer overview of business processes, says Michael Vizard, Ziff Davis Media's editorial director.

For the better part of a decade, we've been hearing about the benefits of e-business. But when you look around the landscape, you have to wonder just how much e-business is really going on. Sure, almost everybody has some sort of enterprise resource planning (ERP) application installed, but very few of these systems do much more than automate some fundamental internal business operations such as accounting.

What makes the concept of e-business elusive for most organizations is that it usually requires business processes to be re-engineered, and the folks who control the business operation have little to no interest in trying to re-engineer processes because that would mean retraining everybody associated with each process. That, in turn, creates levels of inertia in the organization that no I.T. executive has the political clout to overcome.

This can create a lot of frustration in the I.T. community because after a while, it feels as though all you're trying to do is maintain the status quo at lower cost levels than the year before. In short, it turns I.T. people into glorified maintenance workers.

Fortunately, there is a solution to this e-business conundrum, as evidenced by two separate teams of I.T. people that altered, for the better, the way their respective companies handle a particular process without having to completely revamp the way the company as a whole does business.

The process in question is billing, which in most organizations is still largely a paper-based process that provides little in the way of value-add to the customer but lots of cost to the business. Highmark, a provider of health insurance, dramatically altered its approach to this business process by standardizing on e-billing software from Avolent. According to Al Dodson, Highmark's product manager for e-billing, the company's various subsidiaries had multiple approaches to billing based on a wide variety of systems. By centralizing all that billing activity, Highmark significantly lowered its costs by giving customers incentives to move to e-billing processes over the Internet that eliminated paperwork.

To accomplish this, Highmark needed a neutral e-billing platform such as Avolent, because retrofitting an existing billing system to suit the needs of a particular subsidiary would have required each of the other business units to change its own internal I.T. processes too drastically. Instead, the company now uses the Avolent system as a clearinghouse for its e-billing activities.

Automating the billing process can be just the beginning. Jon Clopton, director of network planning at Neutral Tandem, which provides telecommunications services, uses a software-as-a-service offering from Razorsight to gather business intelligence about the company's customers from data gathered in the billing process. A holistic view of billing data makes it easier for Neutral Tandem to identify its most profitable customers alongside those that wind up costing more to serve than they are worth.

In fact, you could argue that billing systems are the best place to do master data management of all billing records to get the best real-world view of the business. After all, ERP applications tend to reflect specific subsets of business activity such as accounting or human resources. The billing process encompasses all the real-world information that most executives are dying to get their hands on so they can see the real status of the business as they really know it.

What distinguishes both of these approaches is that they bring tangible benefits to the business in a hurry. While challenging, the process of automating billing is not so overly complex and fraught with political peril that it becomes impossible to accomplish.

In fact, the worst thing you could do is become overly ambitious. For example, most accounting systems in place today don't support electronic payments, so while it's great to send electronic bills, the corollary for payments may prove too big a challenge for most companies because, in many cases, it requires too much change to be imposed on business partners. By contrast, electronic billing requires only a modicum of change, and it allows for a package of discount incentives that can be passed on to the customer because e-billing eliminates a lot of the costs associated with paper-based processes.

As we all know, patience in business is always in short supply, so concentrating on distinct processes that add immediate value is always going to be one of the most astute ways to make a difference in a hurry.

This article was originally published on 2007-07-07
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