Staying Ahead Of The Remittance Processing Game
AT&T Corporation's Remittance Management Organization(RMO), Lade Center, operates seven days a week, twenty-four hours a day, in order to process more than 9 million domestic residential and wireless customer payments each month. As a union shop with over 100 highly skilled employees, efficiency is very important to RMO. Wausau Financial Sytems' cost-effective solution to AT&T remittance processing requirements has helped RMO stay in business by making them highly competitive with lockbox and other non-union processors.
THE BUSINESS
The Remittance Management Organization (RMO), Lisle Center, of AT&T Corporation opened in late 1989 as a "read and key" shop using 16 OPEX Rapid Extraction Desks (model 48s) and 14 BancTec 9400 workstations to open and process approximately one million customer payments per month. While still operating in "read and key" mode, the center's volume grew to 3.5 million payments per month. During 1994?1995, AT&T began processing payments and balancing to the remittance coupon using an NCR 7780 workstation and "in?line" Courtesy Amount Recognition (CAR) software. By late 1995, RMO had migrated to a two?pass image shop, using NCR beta software.
In 1997, at the beginning of a tremendous surge in payment volume, AT&T decided to search for a more stable and established solution from leading remittance processing providers.
THE CHALLENGE
As a fully unionized shop, RMO's specific challenge was to find a remittance processing system that would be cost effective and provide, through increased volume, the ability to retain the 100 full?time Communication Workers of America employees who work in three shifts, 24 hours a day, seven days a week. "In this industry, a union?represented shop is thought to be too expensive to be able to compete with non?union lockbox service providers," said Brad Sounders, District Manager of AT&T's Remittance Management Organization. "We wanted to prove this myth wrong. If we weren't successful, we knew we would likely be shut down, and the remittance processing outsourced."
To keep costs down, RMO wanted to utilize as much of their existing NCR hardware as possible. The system also had to be able to meet explosive growth in payment volume.
THE SOLUTION: IMAGERPS FROM WAUSAU FINANCIAL SYSTEMS
According to Jim Pickens, Operations Manager of Remittance Processing, "We looked at three vendors, including Wausau Financial Systems. Wausau was the only one that had a working solution in place. In addition, we could use our NCR equipment to reduce equipment costs."
In September 1997, RMO migrated to Wausau's IMAGERPS platform. RMO's present hardware includes:
"The implementation went very smoothly," said Pickens, "from the requirements analysis to programming and installation. In fact, judging from our experience, the implementation cycle is one of Wausau's biggest strengths."
On the software side, RMO is using Wausau's IMAGERPS remittance solution. With IMAGERPS, checks are read, encoded, endorsed and prepared for deposit with minimal operator intervention. The system features a two?pass, high?speed power encode and upgraded Courtesy Amount Recognition (CAR) capabilities with gray scale imaging and OCR software. The multi?result CAR software enables reading of the handwritten dollar amounts in the courtesy amount field on checks and stubs. With IMAGERPS, AT&T has achieved an impressive 90 percent CAR read rate, compared to 55 percent on their previous system.
At AT&T, the IMAGERPS system includes a host emulation capability that enables an operator to toggle over to the host system if he or she has a question about a check and payment stub that do not match.
Two IMAGERPS databases, the NSF database and the MICR database, are also used to eliminate operator intervention and save time. With the NSF database, a returned check can automatically be associated with the proper account number without keying any information. With the MICR database, a check that is received without a payment coupon can be automatically matched to an account number.
THE BENEFITS
Reduced Error and "Kill" Rates Reduce Costs
Because of higher recognition rates, the need for manual keying has dropped by 33 percent, thus decreasing the number of full?time stab required for manual entry from 37 to 20. These personnel could then be reallocated to other mission?critical areas.
Additionally, the 'CAR kill rate' which reflects a successful match between the amount written on a check and the owed amount showing on the remittance coupon has been higher than expected. During the past year, RMO's volume has grown by 50 percent (from 6 million to more than 9 million payments per month), yet the volume of checks requiring keying has been reduced from 2 million to fewer than 1.25 million per month.
Decreased Processing Time = Greater Productivity
Despite increased volume, RMO continues to process and make deposits on 97 percent of customer payments received each day within 24 hours, and the remaining 3 percent within 48 hours, thus meeting its mission of "processing and resolving remittances accurately, completely, and timely, at a "Best in Class" unit cost level."
"The architecture of IMAGERPS with one file per batch and a main database containing just a bunch of pointers is what enables us to process such high volumes," said Pickens.
Shorter Payback Time
RMO's monthly cost savings have exceeded predictions. According to Saunders, "The remittance processing system from Wausau has paid for itself in a shorter length of time than forecasted in the original business case."
Enhanced Ability to Compete
First, and perhaps most important, RMO has disproved the myth that union shops cannot be cost competitive when competing against nonunion lockbox providers. RMO continues to be a low cost provider when compared to external lockbox banks that are also processing payments for AT&T According to Saunders, "Without IMAGERPS from Wausau Financial Systems and the commitment of our people, we wouldn't be able to be cost effective and compete with non?union lock box banks. Technology is the only thing that keeps us ahead of the game." Wausau Financial Systems
THE BUSINESS
The Remittance Management Organization (RMO), Lisle Center, of AT&T Corporation opened in late 1989 as a "read and key" shop using 16 OPEX Rapid Extraction Desks (model 48s) and 14 BancTec 9400 workstations to open and process approximately one million customer payments per month. While still operating in "read and key" mode, the center's volume grew to 3.5 million payments per month. During 1994?1995, AT&T began processing payments and balancing to the remittance coupon using an NCR 7780 workstation and "in?line" Courtesy Amount Recognition (CAR) software. By late 1995, RMO had migrated to a two?pass image shop, using NCR beta software.
In 1997, at the beginning of a tremendous surge in payment volume, AT&T decided to search for a more stable and established solution from leading remittance processing providers.
THE CHALLENGE
As a fully unionized shop, RMO's specific challenge was to find a remittance processing system that would be cost effective and provide, through increased volume, the ability to retain the 100 full?time Communication Workers of America employees who work in three shifts, 24 hours a day, seven days a week. "In this industry, a union?represented shop is thought to be too expensive to be able to compete with non?union lockbox service providers," said Brad Sounders, District Manager of AT&T's Remittance Management Organization. "We wanted to prove this myth wrong. If we weren't successful, we knew we would likely be shut down, and the remittance processing outsourced."
To keep costs down, RMO wanted to utilize as much of their existing NCR hardware as possible. The system also had to be able to meet explosive growth in payment volume.
THE SOLUTION: IMAGERPS FROM WAUSAU FINANCIAL SYSTEMS
According to Jim Pickens, Operations Manager of Remittance Processing, "We looked at three vendors, including Wausau Financial Systems. Wausau was the only one that had a working solution in place. In addition, we could use our NCR equipment to reduce equipment costs."
In September 1997, RMO migrated to Wausau's IMAGERPS platform. RMO's present hardware includes:
- Two OPEX MPS 30 sorters, which sort the mail according to thickness and other factors (such as detection of metal paper clips or staples). Envelopes that contain more than the normal check and payment stub are set aside for manual extraction.
- Three OPEX System 150s with Image Export Modules (IEM), which open envelopes, extract and separate checks from stubs, orient checks properly, and perform the pass one scan.
- Two OPEX System 150s, which only open, extract, and separate check and stub and are used only for overflow.
- 14 OPEX Model 50 manual Extractors, which open non?standard envelopes on three sides, after which enclosures are sorted manually.
- Nine NCR 7780 Pass 1 and Pass 2 check transports.
- 30 Image Display Terminals.
"The implementation went very smoothly," said Pickens, "from the requirements analysis to programming and installation. In fact, judging from our experience, the implementation cycle is one of Wausau's biggest strengths."
On the software side, RMO is using Wausau's IMAGERPS remittance solution. With IMAGERPS, checks are read, encoded, endorsed and prepared for deposit with minimal operator intervention. The system features a two?pass, high?speed power encode and upgraded Courtesy Amount Recognition (CAR) capabilities with gray scale imaging and OCR software. The multi?result CAR software enables reading of the handwritten dollar amounts in the courtesy amount field on checks and stubs. With IMAGERPS, AT&T has achieved an impressive 90 percent CAR read rate, compared to 55 percent on their previous system.
At AT&T, the IMAGERPS system includes a host emulation capability that enables an operator to toggle over to the host system if he or she has a question about a check and payment stub that do not match.
Two IMAGERPS databases, the NSF database and the MICR database, are also used to eliminate operator intervention and save time. With the NSF database, a returned check can automatically be associated with the proper account number without keying any information. With the MICR database, a check that is received without a payment coupon can be automatically matched to an account number.
THE BENEFITS
Reduced Error and "Kill" Rates Reduce Costs
Because of higher recognition rates, the need for manual keying has dropped by 33 percent, thus decreasing the number of full?time stab required for manual entry from 37 to 20. These personnel could then be reallocated to other mission?critical areas.
Additionally, the 'CAR kill rate' which reflects a successful match between the amount written on a check and the owed amount showing on the remittance coupon has been higher than expected. During the past year, RMO's volume has grown by 50 percent (from 6 million to more than 9 million payments per month), yet the volume of checks requiring keying has been reduced from 2 million to fewer than 1.25 million per month.
Decreased Processing Time = Greater Productivity
Despite increased volume, RMO continues to process and make deposits on 97 percent of customer payments received each day within 24 hours, and the remaining 3 percent within 48 hours, thus meeting its mission of "processing and resolving remittances accurately, completely, and timely, at a "Best in Class" unit cost level."
"The architecture of IMAGERPS with one file per batch and a main database containing just a bunch of pointers is what enables us to process such high volumes," said Pickens.
Shorter Payback Time
RMO's monthly cost savings have exceeded predictions. According to Saunders, "The remittance processing system from Wausau has paid for itself in a shorter length of time than forecasted in the original business case."
Enhanced Ability to Compete
First, and perhaps most important, RMO has disproved the myth that union shops cannot be cost competitive when competing against nonunion lockbox providers. RMO continues to be a low cost provider when compared to external lockbox banks that are also processing payments for AT&T According to Saunders, "Without IMAGERPS from Wausau Financial Systems and the commitment of our people, we wouldn't be able to be cost effective and compete with non?union lock box banks. Technology is the only thing that keeps us ahead of the game." Wausau Financial Systems