Automating Business Mailfrom SAP® Solutions

ESKER ON DEMANDwww.esker.com

Mail Services

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Table of Contents

Executive Summary ................................................................................... 3

Introduction ............................................................................................... 4

The Traditional Mailroom ........................................................................... 5

Global Outsourcing Trend .......................................................................... 6

Mail on Demand ......................................................................................... 7

Delivering the Way You Want It ................................................................. 8

Creating Real On-Demand Value ................................................................ 9

Mail on Demand Customer Success ........................................................ 10

About Esker ............................................................................................. 12

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Executive Summary

Business mail is a paradox. On the one hand, there has been a high level of investment in enterprise systems such as those from SAP. In a typical enterprise, 95% of business documents are issued by computers.

On the other hand, research shows that the vast majority of customers prefer to receive business documents such as invoices and purchase orders via postal mail. To satisfy this preference, businesses spend large amounts of time and money maintaining internal mailrooms or working with external mailhouses. Employees and departments continue to manually print and manage paper documents for mailing. Cash is tied up in equipment, supplies, maintenance and labor to support mail operations.

Large mailrooms are not a core competence of most businesses. In addition, their infrastructures are not designed to handle peaks in mail volume, such as end-of-month billing. Because mail volume fluctuates, equipment and other resources sit idle and under-utilized.

Today, there is a solution to the business mail paradox for SAP customers: an intelligent platform that automates every phase and every type of business document delivery. Using this solution, companies are able to mail business documents directly from their SAP systems through a hosted service called Mail on Demand. They pay only for what they use, eliminate the need for large mail equipment expenditures, make better use of IT resources, and benefit from:

§ Automated delivery of business mail as it is generated

§ Significant cost savings compared with conventional mail processes

§ 24/7 operational continuity

§ Reduced IT infrastructure complexity and support burden

§ A flexible alternative to costly mailhouses

In addition, validation before processing offers the ability to control the quality of a large print stream before it is printed and mailed. For example, when Accounts Receivable submits a large batch job, quality control staff can check a sample of the invoices to make sure the print stream is correct before sending to the Mail on Demand facility for processing. And with Mail on Demand, you can see when each document has been printed, folded, inserted, and stamped or metered.

The intelligent document delivery platform supports SAP communication and connection architectures. To the SAP system, the intelligent document delivery platform looks like a print destination. Users can manage documents through standard SAP desktop interfaces. Intelligent document delivery technology enables businesses running SAP solutions to realize the full potential of automated document delivery based on business rules through logic residing outside the SAP system.

In describing the value of Esker On Demand as a better way for SAP customers to deliver business mail, this paper explores the challenges of running an internal mailroom, the questions to be considered with regard to efficiency of current mailroom activities, as well as the benefits of outsourcing mailing activities. It offers a unique solution designed to deliver documents directly from enterprise applications to a secure outsourced mailroom — eliminating several costs associated with running an in-house mailroom.

Above all, this paper is designed to help CEOs, CFOs, CIOs and facility managers to learn, plan and evaluate the benefits of outsourcing mailroom activities.

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Introduction

Electronic media continues to change the face of communication. Within the next decade, several advances are expected in mobile commerce, handheld computers, and new printing technologies that will heavily impact the way consumers and businesses interact. Advances in technology have already made sending an email or an instant message as easy as picking up the phone.

Despite the advances in electronic media, print mail still proves extremely effective, and therefore, important. In fact, after two decades of computerizing the workplace, companies are still reporting a rise in the number of paper documents they send and receive.

As with electronic media, postal mail services have found their place in the market. Many companies are realizing that the cost of running an internal mailroom has become more and more capital-intensive, creating a negative impact on financials. As the Internet proves to be more secure, companies are looking for other avenues to deliver their business mail. These avenues are quickly opening up to third-party providers who specialize in outsourced mailing activities.

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The Traditional Mailroom

The mailroom is at the center of the company universe, creating a labor-intensive initial point of contact/handoff for all paper documents sent or received. Accordingly, problems and delays in the mailroom can tremendously affect the daily activities of a company. For example, a delay in sending invoices will cause a delay in receiving payments. A delay in sending payments to vendors could cause critical delays in receiving parts necessary to make products market-ready. Each of these delays has the potential to affect the solvency of a company. As mail volumes continue to grow exponentially, driven by business growth, companies struggle to keep up with the growing mountain of paper that engulfs most businesses on a daily basis.

Today, companies on average receive three million items per year, with a cost of manually processing mail estimated at $1.10 per document, according to Esker research. Recently Esker surveyed 500 North American billing and invoicing managers regarding their organizations’ practices and preferences surrounding the creation and delivery of transactional business documents. Results of the survey showed that despite the growing use of electronic billing and payment methods, the majority of billing managers (64%) still use postal mail as their primary means of delivering their invoices. As far as preferences for how they receive invoices, 74% of respondents said they prefer to receive billings via postal mail.

How much does your mailroom cost?How much are you spending on your mailroom? Most companies, medium to large, have stand-alone mailrooms to manage inbound and outbound mail — or for those without the space, basic equipment placed in a multi-use room to accomplish their daily mailing activities. The labor, equipment, time and postage costs required to run in-house mail operations are continually growing, pushing current mailroom setup past their comfortable processing limits. Processing high volumes of mail is a tedious and costly task. In some cases, extra labor may be required to operate the mail machines. And there is always a chance of errors from misfeeds, not to mention the high price of postage.

To survive in a highly competitive arena where all costs must be scrutinized, some companies choose to do their own metering and sorting of the daily mailing of statements, notices, etc., while working hard to meet post office delivery deadlines. Back-office and mailroom expenses are always escalating, budgets are limited and big dollars are at stake.

Manual Touch Point

Distribution

Customers

Post OfficeDelivery

Postal Network

AutomatedFolding

AutomatedStamping/Metering

Printing

SEMI-AUTOMATED PROCESS

Printing

Folding,EnvelopeInsertion

StampingMetering

MANUAL PROCESS

Conventional Mail Process

List of Expenses

ü Plain paper and envelopesü Printer and folding machine acquisitionü Printer tonerü Printer and other systems maintenanceü Consumables management timeü Overal mail process timeü Reprocess mail time due to usual problems

§ Long and tedious mailing procedure§ High dependence on production equipment - Printers - Folding machines - Metering machines§ High production and delivery costs

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Global Outsourcing Trend

With many companies focusing on their core business and trying to control costs, many of the tasks of facility management are being outsourced. The choice for outsourcing is therefore a strategic decision coming from the chosen strategy/philosophy. There are several factors determining why companies are choosing to outsource today.

§ Lower total costs of ownership

§ Operational cost control

§ Higher flexibility with personnel

§ Conversion of fixed costs to variable costs

§ Less capital utilized

§ Focus shifted to more critical business objectives

Making the decision to use a mail serviceThere are several questions you should ask yourself to determine the efficiency and effectiveness of your mailing activities. It is extremely important to view your current mailroom operations the same way you would view any other activity in your organization.

§ Have you developed standards to ensure a certain level of performance?

§ Can you handle peak loads such as end-of-month invoicing?

§ Does the mail arrive on time and to the right person?

§ Do you have a fully equipped mailroom, can you request a courier pick-up, can you track your mail and is it secure?

§ Are costs of your mailroom out of line with budget and a barrier to performance improvement?

Hosted servicesHosted services can give your organization a complete solution to automate any document process, allowing your employees to concentrate on more important activities. On-demand document process automation using a Software as a Service (SaaS) approach offers your company the benefits of automated document processing without the investment and maintenance of traditional on-premise solutions. A comprehensive and customized SaaS approach to managing document process automation includes capabilities such as:

§ 24/7 monitoring and management plus data backup & recovery

§ Clustering, load balancing, least cost routing and capacity planning

§ Security management, version management and performance management

§ Single and batch job processing

§ R eal-time status availablity

Reality CheckAre you manually handlingbusiness mail?r Yes r No

Do you have more than five printers in your organization?r Yes r No

Do you have a fully equipped mailroom?r Yes r No

Do you still archive purchase orders and invoices into folders?r Yes r No

If you answered “yes” to more than two of these questions, Esker on Demand can provide immediate improvements.

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Mail on Demand

Mail on Demand addresses mailroom inefficiencies by providing a cost-effective service solution that can quickly improve productivity and cost control. Key benefits of Mail on Demand include:

§ Significant cost savings. Lower or eliminate labor, paper, supplies, maintenance costs, mailroom equipment, and more. Offering pay-as-you-use economy, Mail on Demand allows complete cost predictability and control.

§ A low-risk solution. Existing business systems can be leveraged without custom programming.

§ Quality assurance. Reduce or eliminate manual handling and the possibility of errors, thanks to a completely automated process from start to finish.

§ Decreased time and labor. Send documents such as invoices, bills, POs, remittances, applications (for HR, or universities, or bank loans, etc.), claims (e.g., medical or dental), EOBs, or legal documents (e.g., mortgages) securely from the desktop to the On Demand Center providing fast and cost-effective mail processing services.

What is Mail on Demand?Mail on Demand is business document delivery as a software service, integrated seamlessly within existing business processes such as cash collection, purchasing and sales administration. You pay as you send documents directly from your enterprise applications, eliminating mailroom frustrations.

How does it work with SAP applications?Users send mail from their SAP system directly to an automated Esker On Demand platform. These documents are securely routed over the Internet to the On Demand Center, where they are processed and delivered. As part of a network of multiple, redundant, secure data facilities strategically placed throughout the world, each On Demand Center acts as a backup for the others — providing 24/7 mailing service.

Certification with SAP Business ByDesign™As an SAP AG solution partner, Esker Mail Services has the capability to integrate print-to-mail services directly with SAP Business ByDesign™, the on-demand business management solution dedicated to companies in the small and midsize enterprise (SME) market, as well as to subsidiaries of large enterprises running SAP solutions.

Real-time tracking in the SAP systemEsker on Demand enables users to follow their mail from start to finish using the Esker Document Manager — an easy-to-use, secure web-based client accessible from anywhere via a standard web browser. The Esker On Demand platform offers document validation and real-time status and tracking of jobs and documents. For the end-user, Mail on Demand offers an intuitive service that is as easy as printing a document or sending an email.

Mail on Demand advantages

Versus internal mailroom:§ No need to maintain equipment

§ Status notification in the SAP system

§ Preview before processing

§ No SAPscript required

Versus external mailhouse:§ Send batch or transactional mail (no minimums, mail

a few invoices at a time and receive payment faster)

§ Real-time tracking of job

§ Status notification in the SAP system

§ Preview before processing

§ No SAPscript required

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Delivering the Way You Want It

Mail on Demand electronically delivers your business correspondence directly from SAP and other applications to an external mail service that provides fast, high-quality, cost-effective, first-class mail processing. You can choose from several sending options to enhance the look and feel of your company’s business mail.

§ Choose envelope size

§ Print on one or both sides

§ Print in color or black & white

§ Send correspondence today or schedule another day

§ Add attachments

§ Add an address page

Once “send” has been selected, documents go securely to the Esker mail processing facility. At the mail processing facility, the treatment of correspondence is completely automated, minimizing human errors and protecting document security. No human intervention is necessary. All correspondence is printed, folded, stamped and forwarded to the post office.

Mail on Demand automation

A reliable networkEsker on Demand is part of the Esker network of On Demand Centers. With three major server and production facilities, Esker offers secure, reliable and cost-effective outsourced services.

Printin

g

Stuffin

g

Stampin

g

Automated Archiving

Distribution

Customers

Post OfficeDelivery

Postal Network

List of Expenses

ü Plain paper and envelopesü Printer and folding machine acquisitionü Printer tonerü Printer and other systems maintenanceü Consumables management timeü Overal mail process timeü Reprocess mail time due to usual problems

§ Quick mailing procedure§ No manual intervention§ No dependence on production methods§ Production and delivery costs reduced by around 50%§ Mail production cost reduced by 98%

DATA CENTER

MAIL FACTORY

RA 9852 1654 8GH

RA 9852 1654 8GH

USA UKFRANCE

SINGAPORE

AUSTRALIA

SPAIN

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Benefits of Mail on Demand with SAP solutionsThanks to flexible billing options for cost predictability and control, you only pay for what you use. Mail on Demand offers several benefits:

§ The internal mailroom function can be reduced or eliminated, resulting in significant cost savings

§ Accelerated business cycles due to faster business document delivery

§ Internal resources can be re-allocated from mailrooms to more productive activities

§ Document customization based on customer and supplier preferences

§ Status notification in the SAP system

§ Real-time tracking of job

§ Preview before processing

Creating Real On-Demand Value

No matter how Esker customers calculate their in-house document delivery costs, Mail on Demand works out cheaper. Every case is different, but it would be unusual not to save at least 50% of the ongoing costs of mailing business correspondence. It’s simple, old-fashioned finance that determines the success of Mail on Demand.

It’s obvious that overall costs are significantly reduced by Mail on Demand. Esker systems are on a much larger scale — so the unit costs are lower. That’s usually enough to convince most people, but several other cost reductions can be factored in. For example, customers are not paying for systems while not used — eliminating the mostly redundant peak capacity problem.

For CFOs concerned with more esoteric financial metrics, Mail on Demand customers achieve better capital efficiency. The capital used to buy printers, paper-folding machines, stamping machines and even mailrooms is no longer required. The capital can be used more productively elsewhere.

Mail on Demand also eliminates another area of financial dissatisfaction within organizations. Unlike traditional IT infrastructure, the costs of on-demand services are very easy to measure. This means that they are also easy to allocate within an organization. There are no more arguments between departments over allocated costs for shared resources. Accurate cost measurement also means that IT costs achieve a level of financial predictability, which is important for CIOs who bear responsibility for cost overruns on projects.

What the market is sayingMany market commentators expect the IT services on-demand market to mature more and more in the coming years. One major reason is the cost-cutting measures currently in process by the U.S. Postal Service that include eliminating next-day delivery of first-class mail and closing or consolidating over 220 mail processing plants. In a recent issue of CFO & Controller Alert, REL Consultants estimated that the cuts could add 2-4 days to the average collections cycle1. Efforts to mitigate these negative impacts, including the potential hit that working capital could take (slower distribution of invoices and receipt of payments), are key factors contributing to the current and future uptick in Mail on Demand solutions.

1 REL Consultants. (2012, April 2). Progressive Business Publications. CFO & Controller Alert

Cost ComparisonManual vs. Automated Mail

MANUAL MAIL

AUTOMATED MAIL

Cost per piece

Cost per piece

45% Cost Savingswith Mail on Demand

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Mail on Demand Customer Success

SAP France – Training Dept.

Challenge

§ Training center provides hundreds of courses to about 6,500 individuals every year

§ Needed to optimize manual, time consuming process for registration confirmation and invoicing

§ Invoice required a copy of the agenda and trainee signature, which was manually captured

§ Receptionist printed and collated the documents and mailed invoices

§ Receptionist copied the documents and filed them

Results

§ Automatic notification to trainee that form is recieved

§ Email automatically sent to administrator

§ Esker On Demand collates invoice, signature and agenda; mails and archives the documents

§ Labor savings was 1.5 days a week

§ Estimated savings of $85,000 per year

Trainee faxes registration, which is manually entered into the SAP system. No confirmation back to trainee.

Train session takes place later. Trainees sign attendance document.

Trainee

Training Session

Admin generates invoice; receptionist collates, copies, files and mails documents

Postal Network

Admin

Trainee faxes registration to Esker DeliveryWare, notification sent back

Training Session

Admin

Trainee

Database

SAP system generates invoice; Esker DeliveryWare attaches agenda and signature page, automatically mails and archives the documents

Database

Trainee attendancesignatures scanned

Registration form sent to Admin and entered into SAP System

Archive

Mail on Demand

3

2

1

4

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Mail on Demand Customer Success

Leading food manufacturer

Challenge

§ Printing and mailing invoices

§ Printing and mailing statements (approx. 3,500 x 10 pages per week)

§ Time-consuming

§ Inefficient

§ Prone to errors

Results

Invoices§ Delivery preference determined from

header page

§ Formatted for black & white if fax

Statements§ Delivery preference determined from

header page

§ Formatted for black & white if fax

§ Formatted for duplex printing to minimize paper/postage costs through Esker mail facility

Invoices Statements

Collate Invoices

Collate Statements

Statements

Delivery Preference

Delivery Preference

CollationDuplex Print Formatting

Status

Notification

Invoices Email

Mail on Demand

Fax on Demand

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About EskerEsker is a recognized leader in helping organizations eliminate manual processes, gain process visibility and control, and reduce the use of paper by automating the flow of documents into, within and out of the organization. With its comprehensive software platform and patented technology, Esker delivers the advantages of automated document processing either as a powerful on-premise solution or as an on-demand services (SaaS) leveraging Esker-hosted infrastructure to automate every phase and every type of business information exchange. Customers achieve significant and immediate operational efficiencies, cost savings and measurable ROI in as little as three to six months.

As an established SAP software solution partner with certified integration, and an SAP customer itself. Esker has made serving the needs of SAP customers a top priority. The results of the SAP and Esker partnership are demonstrated around the world by SAP customers who have automated document processes with Esker solutions. Esker has a dedicated R&D team focusing on SAP applications, and a primary objective to offer SAP customers the best solution for document process automation.

Esker was founded in 1985 and operates globally with more than 80,000 customers and millions of licensed users worldwide. Esker has global headquarters in Lyon, France and U.S. headquarters in Madison, Wisconsin.

For more information, visit www.esker.com.

Esker, Inc.1212 Deming Way, Suite 350Madison § WI 53717 Tel: 800.368.5283Email: info@esker.comwww.esker.com

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