Only your utility company can determine what is "core" or "non-core" in your meter-to-cash processing. However, if you determine that bill print processing is non-core and you elect to evaluate outsourcing this function, this article provides suggestions on how to approach this evaluation.
This is not an inclusive list, but rather a high level overview of key items that I believe should not be overlooked and that will help your company make an informed decision on your processing strategy. Many of these items do not get the level of attention they deserve during the evaluation and tend to be the cause of "surprises" that arise later.
A critical initial step in preparing to conduct a bill print processing evaluation is to have a good understanding of your current processing.
- Determine the number of bills, notices, letters and any other items that you will need to be printed on a daily and/or monthly basis. In addition, project your monthly volumes for the next three to five years. Remember to take into account the projected reduction in the number of printed bills due to customers migrating to e-billing options.
- Investigate your current processing to determine the time in your daily processing cycle when the file(s) from your Customer Information System (CIS) are ready to be passed to your bill print processing step. Typically, a utility company will have several files being passed at this point in their processing. List each file by the time of day that it is ready and include the number of customer documents it will be sending to the print processing step.
- Identify all the paper forms that you use in your print processing. Define each paper form by listing the details about the form, such as, style, size, paper stock, color, any pre-printed ink colors, and perforation positions. Do this same work for any envelope stock.
- Determine the time it takes once your bills are delivered to the US Postal Service for receipt by your customers. This is also known as mail float.
Having this information will facilitate your evaluation and will reduce the potential for surprises that may arise later in your evaluation process.
Request for Proposal
Most utility companies will issue a Request for Proposal (RFP) document as part of their due diligence in conducting a bill print processing evaluation. Since utility companies have been using the RFP approach for decades, this article will not go into the details on how to handle the RFP process or how to establish your evaluation team.
One of the major objectives of your RFP should be to learn how the respective bill print outsourcing vendors handle their business. Identify each vendor's standard processing procedures and strong points. Use this information to determine if this processing option will bring value to your bill print processing.
It is suggested that your RFP be developed with two separate documents: (1) Business -- operational and technical and (2) Financial -- cost of services. Using this approach will help your evaluation team first to focus on the operational and technical evaluation of the bill print outsourcing vendors and to rank the vendors by how well they will meet your requirements. Following this, your team can evaluate the cost of using each vendor and then rank them by cost. Comparing the two ranking lists will facilitate building a short list of two or three vendors that have earned the next level of evaluation.
Business RFP: A proven approach for the Business RFP document is to follow the flow of bill print processing. The following lists key items to consider by each processing step.
- Setup and Implementation -- Identify the tasks needed to migrate to an outsourced bill print processing solution. Understand the schedule of tasks to be completed and which party is responsible for each task.
- Forms Acquisition and Storage -- Provide detailed specifications for your current bill forms and envelopes and work with the vendor to confirm how they will meet your requirements. Understand the vendor's forms and envelopes ordering practice, including lead times and inventory handling and warehousing.
- Data Transmission -- Identity every file that will be transmitted to the vendor each processing day. Include the time of day this file is ready for transmission and the average size of each file. Understand the vendor's security procedures for handling incoming transmitted files and how the vendor tracks incoming files to ensure your files are received as expected. Learn about the vendor's practice for handling issues with receiving transmission when they arise.
- Printing and Insertion Processing -- Understand the printing and insertion equipment the vendor has at each of their processing locations. Request information on their quality control procedures. Have the vendor explain how they ensure the "integrity of the envelope", which is defined as how they ensure each envelope contains only the bill pages and inserts for a single customer.
- Mailing -- Confirm with the vendor the timetable they will be committing to meet that will ensure your daily bills are being delivered to the US Postal Service in a "same day" processing window. Understand the projected time it will take for the bill envelopes to be received by your customers.
- Quality Control and Service Level Agreements -- Understand the tracking options (dashboards) that the vendor offers to provide your company with the ability to inquiry via an online web-based tool to monitor and audit your daily work. Learn how your team will be able to use this tool to track your work as it progresses through the vendor's processing. Establish service level agreements that will be tracked on a daily basis and reported monthly that ensures your processing expectations are being met. Learn about the vendor's customer service support and how they will be communicating with your team to meet your processing requirements.
- Back-up and Disaster Recovery -- Understand how the vendor handles short term back-up situations, such as a printer or insertion machine being out of service. Discuss the steps that will be taken to ensure your same day mailing requirement will be met if equipment issues like this occur. In addition, it is important to understand how the vendor handles disaster recovery situations, such as their center being out of service due to a fire or natural disaster. These are situations where your work will need to be processed at an alternate location where the vendor either owns that location(s) or has an on-demand processing arrangement.
It is suggested that the Business section of your RFP is not just made up of "yes/no" type questions. Instead, use questions that require the vendor to answer your questions with an explanation of their processing procedures. How they build their responses will give your evaluation team a better understanding of how thorough and efficient the vendor's standard business practices are.
A RFP comparison methodology will need to be established. This will use a weighting or priority scheme assigned to each RFP question. Additionally, a scoring scheme should be developed to grade or rate the vendor's response to each RFP question. Combining the weighting and scoring schemes will allow your team to build a total score for each vendor indicating how well they will meet your requirements.
Financial RFP: The Financial RFP document that accompanies the Business RFP document should require the vendors to explain their pricing methodology. You should provide your actual volumes by bills, notices and letters to allow the vendors to provide a complete proposal. Vendors should also be required to specify any non-daily charges, such as, fees related to setup, training, inventory handling, etc.
A bill print processing evaluation is a valuable tool to help your company make an informed decision on the direction to take for your customer bill print processing.
Critical factors that lead to a successful evaluation are:
- Have the appropriate areas of your company represented on your evaluation team.
- Do a fair and unbiased comparison of the vendors you invite to respond to your RFP.
- Identify all pricing elements.
- Compare to your in-house processing costs.
- Ensure that you have the information needed to make a solid business decision.
As your company evaluates outsourcing your bill print processing, it should be stressed that electing this approach creates a partnership between your company and the vendor. Typically, these arrangements are for a three to five year term. Since this is a mission critical processing element in your customer bill delivery strategy, a strong working relationship with the vendor is important.
Earlier in this article it was stated that this is not an inclusive list, but rather a high level overview of key items that I believe should not be overlooked when conducting a bill print processing evaluation. Having the appropriate information will help your company make an informed decision on your processing strategy.