Billing Process and Technology Review
Business Issue:
Our client, a major US stock exchange, required assistance with a review of their existing billing system and processes. The client had recently in-housed the billing function from their parent company and was in the process of completing the rollout of a custom developed billing application. The new application was intended to fully support the exchange’s four separate and distinct business lines, but due to the diverse nature of these business lines and an evolving marketplace, a large number of manual workarounds were still in place. The client’s goal was to reduce the total cost of ownership of the billing function by highlighting structural impediments to operating efficiencies and identifying opportunities to capture cross-product synergies.
Our Approach:
The Arc Partners team worked closely with the client to review the current billing process and construct detailed process flow diagrams for each of the four business segments. A standardized format was used for each business segment to create process flows for the following key sub-processes; data capture, data adjustment, customer information administration, business rule and fee schedule administration, invoice production and presentment, revenue recognition and payment collection. Based on these diagrams, a side-by-side analysis was conducted to highlight opportunities for simplification, standardization and cost reduction. As part of this analysis, the process flows were color-coded to highlight manual process, areas of inefficiency and cross-product inconsistencies.
The current state assessment also included a detailed financial analysis of the total cost of ownership of the billing function by business segment and sub-process. The financial analysis was used in conjunction with the process flow diagrams to identify areas where redesign would have the most likely material payback.
The process flow study concluded that the client had limited opportunities to reduce billing function related operating expenses given the existing billing application. As a result, Arc Partners conducted a comprehensive evaluation of billing engine and EIPP software providers. Twenty vendors were investigated and a short-list of five vendors was identified to prepare custom demonstrations for the client. The custom demonstrations were based on the client’s most complicated billing scenarios and used real transaction data.
Value Received by Client:
The client gained a comprehensive understanding of their billing processes both from an operational and financial perspective. This enabled them to reduce operating expenses, make key personnel decisions and develop a long-term technology roadmap. As a result of the vendor evaluation, the client decided to implement a commercial off-the-shelf billing package and redeploy IT resources to focus on the exchange’s core trading technology. The new billing technology solution reduced manual intervention and enabled the client’s operational personnel to focus on higher value-added activities. In addition, the billing function is more responsive to changes in the marketplace and customer service has been significantly improved.