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By Gina Ferrara, Senior Analyst, Madison Advisors
Organizations that currently operate an internal print and mail production facility probably have had the “should we outsource” conversation at some point. Some may have broached the subject more than once, and may have gone one step further by distributing an RFP. Inevitably, within the organization there will be different opinions on the subject; however, there are several factors to take into consideration before making this decision.
While our nation (and world) currently battle COVID-19, which has caused thousands of deaths, put millions out of work and wreaked havoc on the US economy, businesses in every industry will need to focus on ways to remain profitable. A renewed focus on increasing efficiency, reducing risk and reducing costs may drive large financial, insurance and healthcare services organizations that produce millions of transactional communications to consider revisiting the outsourcing discussion once again.
Financial considerations
Outsourcing print and mail does have financial benefits. Capital expenditures associated with an equipment refresh for end-of-life or end-of-lease equipment are eliminated, including expenses associated with maintenance contracts on the newly purchased equipment. Declining print volumes due to increased electronic delivery will drive up the unit cost per mail piece. Since postage is the biggest cost in customer communications, a decline in volume poses the risk of losing postal discounts if zip code densities are not met. By outsourcing to a third-party service provider, a company can benefit from the provider’s buying power for consumables such as ink, paper and envelopes and potentially reduce postage expense as work can be comingled with other clients’ to increase postal densities.
Risk is also mitigated with service providers that have invested in workflow automation software and have the processes in place to ensure quality controls, document integrity and mail piece tracking so every mail piece produced on the shop floor is tracked during the manufacturing process. Additionally, service providers are subject to strict data security standards, especially if they print for highly regulated industries such as healthcare and insurance.
Disaster recovery
In-plants that operate a single site have to contract with a third party for disaster recovery and business continuity services to ensure production of critical communications in the event of a disruption; whereas print service providers have multiple redundant production facilities and conduct testing for many scenarios, including natural disasters or power interruptions to ensure minimal impact. The current health crisis has forced manufacturing plants to shut down for one or more days to disinfect the facility when employees test positive for COVID-19. Multi-site print service providers have the ability to route files to another facility while one is closed for cleaning to ensure critical communications are processed and mailed, thus providing peace of mind to their clients and the ongoing ability to meet set SLAs.
The downside
Drawbacks to consider regarding outsourcing include risks associated with sending customer data outside the company firewall. Internal lines of business may feel a loss of control due to their inability to perform quality checks on critical documents at the print center. Other items to consider when calculating the financial benefits of outsourcing relate to contract negotiation, transition costs and pricing. A typical contract duration is 5 years, anything less than that will result in higher pricing. Many service providers include a certain number of hours of development time as part of the transition; however, be mindful of any additional development time necessary for prepping non-optimized files for production as this may quickly eat up that time.
The all-important vendor relationship
Above all, an important factor to consider when making the decision to outsource is the relationship with the chosen service provider and their ability to create a true partnership with your organization. Open communication between both organizations and collaboration during a challenging time will be critical to ensuring a successful relationship.
By Keith Woedy, VP of Research & Practice Lead, Madison Advisors
One of the hottest buzzwords in business circles nowadays is robotic process automation (RPA). In the communications area, RPA is attractive because it allows organizations to fix problematic data in their legacy systems, automate processes, expedite master plans of delivery, lower the error rate and free up knowledge workers to do things that are more mission critical.
For all the above reasons, we are seeing many companies compartmentalizing certain aspects of RPA by investing in point solutions that turn unstructured data into structured data. For example, thousands of filled-out forms may come into one department of an insurance organization, some of them typed and standardized and some of them handwritten with any number of content forms and with little room for predictability. Currently an organization must deploy a point solution or robot to put the unstructured data—data that doesn’t conform to fixed rules or constraints—into a structured format by using Optical Character Recognition (OCR) and Natural Language Recognition (NLR). Then the insurer can deploy RPA robots to “read” and manage the data from the forms to assist in the execution of a host of mission critical processes including invoicing, customer requests and quality assurance checks. This is a single, relatively simple RPA use case.
To extend the example, while this solution resides within one department of the insurance company, its benefits and impact most likely have not been shared across the organization’s lines of business. It’s even more likely this solution has not been integrated within the organization’s overall strategic direction due to the challenges companies face with cross-functional communication.
With the attention RPA technology is getting and the real potential it offers, several RPA vendors have gained significant funding to continue their R&D and come up with an ever-expanding range of applications. It’s partly for this reason that we suggest some caution before adopting the simpler, single-purpose RPA technologies that are currently available.
If RPA development follows the typical path of technological development, the relatively small, but expert, development firms likely will be acquired by larger firms with a broader array of related offerings. In the near future, RPA solutions may be more effectively implemented for use on an enterprise-wide scale, integrating with the processes of many or all of the business units in a large organization. We’re all familiar with “data silos”—isolated and disparate islands of information within an organization—and how difficult it can be to combine and use the data from these various sources. By investing in multiple single-use RPA solutions, as we’re seeing in many enterprises today, organizations may be missing the bigger opportunity to improve efficiencies, reduce costs and improve both customer and employee satisfaction. By taking a step back and evaluating the automation opportunities that could be integrated across all lines of business versus deploying one process at a time, customers can leverage RPA’s benefits exponentially.
While RPA technology can reduce error rates, improve efficiencies, positively affect time to market, and improve customer satisfaction at the business level, we’d like to see enterprises focus on the idea of creating a Center of Excellence that takes full advantage of all RPA has to offer. A Center of Excellence team, comprised of internal experts, can help define business objectives across the enterprise, standardize on the framework for deployment, and provide overall leadership. We see this as intelligent business process management or an integration platform as a service. We recommend the use of best practices during implementation and the adoption of governance over how RPA can be used to benefit the whole organization, not just one business unit.
Look at how your customer communications processes are handled end-to-end and how they interact with the adjacent processes within your company; and then partner with an organization that understands your business and has the process capability to deliver an RPA solution that works across the enterprise.
By Kemal Carr, President
Madison Advisors is pleased to announce the publication of the 2020 Capture Service Provider Market Study. We have been following the capture service providers (CSP) solutions, as well as the latest trends in the inbound document processing market.
As part of the study, Madison Advisors conducted in-depth interviews with participants to assess their capabilities, service offerings, strategic direction/roadmaps and differentiators. Our research also includes trends in intelligent automation (IA) technologies, such as robotic process automation (RPA) and artificial intelligence (AI), and how these tools are transforming service offerings and traditional pricing models.
The capture industry has experienced significant changes in the last 5-6 years due to the speed and reliability brought to inbound workflows by bots and AI tools. CSPs are now more focused on automated software technologies compared to the decades-long focus on hardware and highly trained data entry teams. Advanced software technology tools streamline inbound workflows by applying automation to the document sort and classification steps, increasing data capture accuracy and improving the speed of document processing.
Study participants have changed their pricing models to reflect these enhanced workflows—trends about which the study provides insight. Emerging technology impacting the capture industry is also covered.
Key topics included in the study are:
CSPs are adapting their services to provide additional transparency and end to end chain of custody tracking to satisfy clients’ document governance requirements. Once considered a value-added service, this type of tracking is now a required offering of top tier providers.
To purchase the full research report “Capture Service Provider Market Study,” click here.
By Kemal Carr, President, Madison Advisors
Those hosting the recent Quadient Analyst Day gave us a status update of the company unification with Neopost, as well as the direction it is taking for the future. Themed “Mission CXM,” Quadient Analyst Day discussed their move from CCM to CXM—the more nebulous customer experience—and how it is working to develop more sophisticated components to take its customers along that path as well.
Quadient Inspire R14, the latest version of Quadient Inspire, is slated for release in February 2020 and one of its elements is an update of the cloud-based Scaler tool, now equipped with AI components that can identify and extract errors. Quadient reported they’ve been successfully running that product through customers’ documents, identifying and uncovering typos or errors in general. For example, in one instance, an insurance company’s document was missing the word “not” in a message that stated, “We are responsible for...” That would certainly be a significant material omission.
Inspire Scaler may function primarily as a rapid deployment tool for those migrating or upgrading to Inspire R14, which Quadient has revised for a simplified user experience, enhanced personalization and preference management, and connected stacks—and it can be built to scale. All of this facilitates the evolution from CCM to CXM, which is a fuzzier concept since it involves customer interaction and can vary from business segment to business segment, and even between lines of business. CXM doesn’t only push out messaging, it also receives customers responses and processes and analyzes those responses.
Apparently driven by the different and precise needs of the various industries it serves, Quadient plans to focus on promoting R14 to vertical markets and has hired experienced vertically focused leaders in banking, insurance, utilities and additional fields, to reach these clients. These experts know and understand the challenges of their business areas and can speak with considerable knowledge to prospects.
Quadient also will be working through hosted managed services partners. This is different from using SaaS (software as a service) or the public cloud. With hosted managed services, the customer works with a dedicated and highly skilled third-party service provider who leases dedicated servers and will do the setup and maintenance, day-to-day management and other tasks, depending on the negotiated contract. The arrangement takes the burden off an in-house IT department, yet still gives the customer more security and control than a SaaS provider or public cloud services.
Compared to taking a do-it-yourself approach with the attendant learning curve, as well as trial-and-error deployment, hosted managed services offer the best solution for successfully implementing a complex CXM system. We like to use this analogy: You want to fly from Chicago to Dallas. You can build your own plane and learn how to fly it, or you can go to United or Delta and simply buy a ticket. The choices a business makes depends on its specific situation, of course, but there are several options available for them, and on the software development side, Quadient is making intelligent use of these options.
Quadient’s Analyst Day was held at the Udvar-Hazy Center of the National Air & Space Museum in Chantilly, Virginia. Part of the day’s agenda was a tour through this amazing facility, which houses among other items, the B-29 Enola Gay, which dropped the atomic bomb on Hiroshima, and the space shuttle Discovery. They were installing a Predator drone as we toured. Quadient tends to take you to places you might not think of going on your own—and that applies to its products and services as well.
By Susan Cotter, Senior Program Manager/Analyst
Transactional printers often work under very tight client deadlines and aggressive SLAs, so when they’re hit by something like a hurricane, earthquake, flood, tornado or fire, it has the potential of being a disaster for both the enterprise and its clients. The solution is to find a disaster recovery provider or another printer that can be trusted to get those critical jobs out on time – or as near on time as possible.
There are two kinds of disaster recovery provider (DRP) services. Cold DRP services are dedicated to disaster recovery. The way they typically work is to run regularly scheduled tests throughout the year so they’re prepared to jump into action should your operation make a disaster declaration. In the case of a disaster, cold DRPs should be prepared to accept your work and begin producing your output within 48 hours. They can be expensive, however.
The second type, warm DRPs, usually are less costly. These companies typically have their own print customers but reserve capacity to take on the extra work when necessary. Warm DRPs may run live production for their clients on a regular basis, as well as test jobs to ensure they can duplicate your finished product as closely as possible. The chief drawback here is that warm DRPs do have their own print customers who may claim top priority in a nationwide or regional disaster situation.
Within the framework of these two options, you have several other important things to decide before a making a commitment:
Above all, set realistic expectations. The DRP may not be able to replicate your work exactly, so determine what is acceptable quality for you and your customers. Location is another factor. If a hurricane impacts the entire East Coast, for instance, and affects both your shop and the DRP, this can cause significant delays. Does your DRP have a backup, or can you work with them if they’re located some distance away? Finally, while your shop is down, you might consider arranging to have one of your own staff on site with the DRP in an advisory or quality control role.
By definition, a disaster is something you don’t count on and cannot immediately control. The very best you can do is to be prepared.
By Kemal Carr, President
At the end of September, Neopost, headquartered in Paris, France, announced that it’s changing its name to Quadient – previously the name of one of its business units, the one that provides primarily multichannel CCM capabilities and likely some portion of Neopost’s Business Process Automation (BPA) services and customer experience management (CXM) solutions as well. In fact, it’s difficult to untangle these lines of business, and for the reason that they probably are not meant to be untangled. Rather, Neopost (now Quadient) appears to be moving toward the comprehensive integration of all that it has to offer.
With the name change, Quadient’s management seems to be taking another step ahead and is creating a vision—for itself and for customers and prospects—of its own future in the integrated CCM, CXM, and BPA spaces. This is where we’re seeing growth in the field of digital automation and transformation as organizations move away from traditional, physical customer communications to digital channels and management.
The more Quadient can pull all the pieces together into a unified CCM, CXM and BPA solution for enterprise, the more I think they’re on the right path. Our enterprise clients don’t want to add complexity to an already complex and broken process, so using two solutions where a single unified offering exists, makes managing the offering far less difficult.
Adding to this, traditionally what businesses have done when they have a very specific need in one line of business is to buy another point solution. However, this then creates a whole separate silo outside of the normal existing process and only makes support and related costs go up. Isolated customer data silos become obstacles to overcome in developing and delivering consistent messaging and direct and personalized interaction with customers.
What we see is that enterprises today are looking for a complete digital and physical solution—one-stop convenience. Executives are frustrated with buying CCM solutions from this vendor and digital services from that vendor, and then having to cobble them together themselves, or spend money on integration services or hire more IT staff.
As Quadient, the rebranded Neopost is looking to satisfy both current and future customer demand for integrated communications solutions, now under a single and well-respected name. It will be exciting to keep watching this space to see how Quadient continues to adapt.
By Susan Cotter, Senior Program Manager/Analyst
I recently had the pleasure of presenting at the In-Plant Printing and Mailing Association (IPMA) conference with Jason Fonner, Director of Print Operations at HM Document Solutions (HMDS). In 2018, HMDS embarked on its digital transformation journey with the purchase of new hardware and software technologies. Madison Advisors was honored to be selected by HMDS to assist in its digital transformation journey and partner selections.
The presentation, “Digital Transformation using Customer Communications Delivery Hub with Inkjet Technologies,” highlighted best practices and HMDS’ journey towards a successful implementation and winning back print applications that previously had been outsourced. Our audience included decisions makers for in-house printing and mailing operations at various points in their own technology refresh projects.
Our presentation focused on the vital part played by in-house operations due to in-depth knowledge of the enterprise’s business needs and organizational structure. As such, in-house operations have a crucial role in building a center of excellence for enterprises to streamline their customer communication strategies and bridge the gap between online and offline channels. The concept of creating a center of excellence for a project like this was extremely well-received.
We walked our audience through the key steps of a successful transformation roadmap:
1) Developing an optimization strategy
2) Discovery and analysis
3) Creating a target operating model
4) Building a strategic roadmap
5) Partner and technology selection
6) Building business cases and a transformation strategy
7) Integration with chosen partners
HMDS’ center of excellence included subject matter experts from print operations, marketing, finance, risk and product segments. Their digital transformation involved strategic investments in inkjet technologies and partnering with an established Customer Communication Management (CCM) software provider. As a result, the in-house operations team has won back 20% of the enterprise printing that had been outsourced to outside providers. Quite a win for Jason and his team! HMDS’ journey continues, and it’s been our pleasure to have been part of it along the way. IPMA gave us a great audience to discuss the process and demonstrate how Madison Advisors can help other like-minded organizations succeed in their journeys.
By Gina Ferrara, Senior Analyst, Madison Advisors
Madison Advisors just released a new research report, “Enterprise Output Management Systems, 4th Edition: Moving Beyond Print Management.” Our 3rd edition was published in December 2010 and since much has changed over the years, it was time to present our new findings on the latest trends in this industry.
Enterprise Output Management Systems (EOMS) play an important role in the production of customer communications. This technology is not often top of mind when one thinks about customer communications management technology, unless, of course, you are an enterprise in-plant or print service provider that manages print production. Initially, output management systems were used to manage the production of printed communications. Now these solutions offer so much more than that. New features and functionality provide enhanced workflow and automation with additional output capabilities that give organizations the ability to offer multi-channel delivery and a better customer experience. Enterprise in-plants and print service providers can benefit from some of the key findings in our report, which include:
EOMS solutions can ingest data files from multiple systems and in multiple formats, transform that data and direct it to the appropriate output channel. In the past, these solutions were adopted to manage multiple print devices by combining and splitting print jobs to optimize utilization of print hardware. Now, EOMS solutions have grown beyond traditional print production management with enhanced workflow and automation, robust print transformation capabilities, and additional delivery channels such as email and SMS—all of which streamline print production operations and allow service providers to increase their value proposition beyond print and mail.
To communicate with customers electronically, organizations are looking for solutions that can provide multi-channel delivery for high value customer communications in order to keep up with consumer expectations and remain competitive in the industry. EOMS solutions can provide this functionality, without having to make changes to the document composition process upstream, giving service providers the ability to ingest legacy output and enhance the document by adding color, variable content, such as targeted messaging or graphics, and delivering the output to electronic channels, as well as an archive solution.
Madison Advisors anticipates EOMS technology to continue to expand capabilities and become the pivot point allowing organizations to transition legacy output into enhanced communications that can be delivered across multiple channels to meet consumer expectations for multi-channel delivery. These solutions will take on a major role in the overall CCM ecosystem as technology providers continue to upgrade their solutions in response to changing market trends.
To purchase the full research report “Enterprise Output Management Systems, 4th Edition: Moving Beyond Print Management,” click here.
By Susan Cotter, Senior Program Manager/Analyst
It is exciting to see how new capture technologies continue to evolve and how their impacts on traditional inbound workflows are providing Capture Service Providers (CSPs) with new and innovative ways to interact with their customers. In our recent brief, “Inbound Document Capture – New Innovations and Strategies,” we outline new strategic opportunities for CSPs to integrate their services into clients’ workflows by integrating inbound and outbound document workflows with Customer Communications Management (CCM) tools. We also cover how advances in workflow tools, analytics and dashboards are changing the landscape of traditional service models offered to clients.
Our brief includes innovative CSP strategies for:
Emerging technologies are allowing CSPs to be more strategic with expanded service models that provide tools not traditionally associated as part of inbound document processing. This brief expands on these considerations with a specific focus on Capture Service Providers, but much of the information is also relevant to in-house operations. CSPs embracing these opportunities will provide additional value to their clients that ultimately improves the experience of their customers.
To access Madison Advisors’ brief “Inbound Document Capture – New Innovations and Strategies,” click here.
By Gina Ferrara, Senior Analyst, Madison Advisors
“Growth Driven: Fueling Your Mailing and Shipping Success” was the theme this year for the National Postal Forum, held May 5-8 at the Indianapolis Convention Center. As a first time attendee and presenter, this conference—which hosted over 4,000 attendees, 125 exhibitors and 100+ educational workshops—did not disappoint. From the moment I arrived at Indianapolis airport, I could immediately sense the excitement for the Indy 500, which was a prominent theme throughout the NPF conference. The keynote session on Monday morning “fueled” the excitement even more when Judy de Torok, Manager of Industry Engagement and Outreach for the USPS, kicked off the session with this eye-opening statement: The total number of laps driven in the Indy 500 is 18,000 which equates to 47,000 miles—yet this is only a fraction of the miles covered by the United States Postal Service every day. Wow!
The crowd welcomed Megan Brennan, 74th Postmaster General and CEO of the USPS, with a standing ovation. She also echoed the racing theme and stated that while the Indy 500 is held once a year, the USPS races every day and makes 159 million pit stops across 42,000 zip codes, and drives the USA forward at full throttle. The USPS connects people and businesses by delivering an exceptional customer experience that drives business growth.
I was pleasantly surprised to hear Postmaster General Brennan highlight the same themes that I discussed in my presentation, “Why Print is Still an Important Communication Tool.” In a world where consumers are bombarded by digital interactions, it was affirming to hear her discuss print as a significant component of an omnichannel communications strategy and the important role the USPS can play. Today, marketers have more tools and digital delivery channels available for prospecting, yet it is still hard to convert a prospect to a customer. Because consumers spend more time with physical mail, a digital-only strategy will not work alone; thus, it is important for digital and physical to work together.
Informed Delivery and Informed Visibility are the latest innovations from the USPS that can help marketers turn every interaction into action by combining digital content with physical mail to increase customer conversions. With the Informed platform, the USPS is able to provide the right data, at the right time, to the right people who can make business decisions and accelerate their customer experience (CX) strategy. Since its launch in 2017, 10,000 rich-content campaigns have been generated using Informed Delivery. At a rate of 500,000 new Informed Delivery subscribers per month, you can bet that marketers will be jumping on board to take advantage of the opportunity to supply ride-along content that provides an easy and effective call to action with a direct mail marketing campaign.
Providing education, creating partnerships and helping to build business are all part of the mission of the National Postal Forum. Mail creates captivating moments and it can move people to act. Marketers who generate omnichannel campaigns that incorporate print and digital interactions and take advantage of the technology offered by the USPS will speed ahead of their competitors in the race to win new customers and gain greater market share.
“Drivers, start your engines!”
© 2024 The Madison Advisors
