Company: Albany Software
Submitted by: The itpr Partnership
Date: July 2002
eTransactions software products from Albany Software are allowing Scoot to slash its administrative costs while delivering an innovative and unique service to its subscribers. Freelance journalist, Alison Classe investigates.
A web-oriented company has to be on top of its technology to have survived the economic vicissitudes of the past couple of years. Scoot, the web and phone-based business and service directory, has avoided the trap of putting all of its sophisticated software at the front end and then being let down by labour-intensive internal processes. Instead, Scoot has focused on installing the right systems to run its back end activities too.
One inconspicuous yet crucial part of the back-office operation is Albany Software’s ALBACS system, which manages every aspect of Scoot’s collection of payments from customers via BACS.
ALBACS allows Scoot to offer a unique service to its subscribers – the option of paying according to the number of leads they receive, rather than using conventional charging methods, where the first year’s subscription is paid up front, with quarterly billing of a fixed tariff thereafter. “That’s probably the single most important differentiator for our business, and one that would never have been possible with conventional cash collection methods,” says Drew Mason, Scoot’s Back Office Development Director.
Clerical labour savings as high as three days per week are being achieved in return for minimal technical effort, since ALBACS is that rare thing – an application that runs itself without any dedicated internal support. “You don’t have to worry about ALBACS – it just does its job quietly and effectively in the background.”
Scoot’s down-to-earth approach to technology means that it is ideally positioned to seize the opportunities of the forthcoming upturn in the economy. The fact that so much of Scoot’s administrative process is automated – with scaleable products like ALBACS – means that staff costs can stay down as business builds up.
A BUSINESS FINDER FOR THE 21ST CENTURY
Scoot is in the business of bringing buyers and sellers together in a convenient multi-channel forum. The main access methods are by telephoning Scoot’s 24-hour, 7 days a week call centre or via the Internet at www.scoot.co.uk. Faxed and e-mail enquiries are also welcomed. Underpinning the business is a classified database that allows web users or call centre agents to search for a particular type of business within a specified area.
This classified database contains both ordinary entries and subscriber entries. Subscribers are businesses that pay to have more information included and to receive priority treatment. For example, a surfer looking on Scoot’s web site for a hotel in Edinburgh will be presented with a list of subscribing hotels first. Scoot can also put an interested customer directly in contact with subscribing businesses, by transferring a phone enquiry from the call centre to the subscriber, or by providing click-throughs from the web site-listing to the subscriber’s site, or to an e-mail facility.
Scoot chose ALBACS because of its price/performance proposition, broad functionality and ease of use. In addition, Scoot was impressed by the professionalism of Albany Software’s staff who demonstrated a clear understanding of its business requirements.
Scoot is not a company that shies away from taking on software development projects internally where appropriate, but in this case it didn’t make sense to opt for a bespoke application. Drew Mason explains, “We have our own internal development team, and we’ve developed our own web-site and our own applications for areas like CRM, since the needs of our business are very specific. But when there’s something like ALBACS on the market, it didn’t make sense to develop a product in-house. It’s also easier to be sure we’re satisfying compliance requirements when using a tried-and-tested product like ALBACS.”
Now ALBACS is used for all Direct Debit-related activity within the company, from creating new mandates to collecting funds and reporting any anomalies. Over 20,000 merchant businesses are listed in Scoot’s directory and they generate between five and seven thousand payments per month. ALBACS is able to handle this volume of transactions with ease, which ensures that Scoot is able to collect funds quickly and reliably without causing any disruption to day-to-day business activities.
ENABLING A UNIQUE SERVICE TO BUSINESS
Scoot’s unique charging structure is directly enabled by ALBACS. Some subscribers choose conventional charging, which involves a subscription fee to cover payment for the first year and quarterly billing of a fixed tariff thereafter. But many merchants are opting to pay most of their charges as a per-lead fee – the exact amount of which is determined according to the type of business – with much lower regular tariffs. The first option has the advantage of predictable outgoings, but the second allows greater flexibility together with a low-cost entry to the service. It’s up to the individual business which option they choose.
Drew Mason believes that Scoot is the first and still the only business of its kind to offer the option of per-lead pricing and ALBACS is an essential element of this service. “Charging this way means we have to collect large numbers of payments every week, each of which can be as low as a few pounds. It just wouldn’t be feasible to do that by cheque.”
With ALBACS in place, there’s very little overhead to providing per-lead charging. Telcos deliver an electronic record of calls, which can be sorted by subscriber, whilst click-throughs are collected automatically by the software driving the web site. All that information is pulled together into the billing system, which generates invoices for transfer to the sales ledger. This in turn initiates ALBACS’ Direct Debit facility, enabling the collection of charges at the touch of a button.
A business such as Scoot needs fast, efficient collection of all its payments and using ALBACS, collecting payments on a regular weekly basis is simple. “We used to collect payments via cheque before we introduced pay-per-lead charging, but this was a strain on internal resources and it was also less reliable. There were always problems with cheques that had been written incorrectly – cheques are a fallible medium.”
ALBACS not only helps with actually collecting funds but also with setting up individual customer banking arrangements. “We never get payments failing because the instruction is incorrectly set up, thanks to the stringent validation within ALBACS. It integrity-checks the account code against the sort code and so on, complying with the requirements for automated Direct Debit instructions and reducing the amount of time it takes us to enter into a new contract.”
COMPLETING THE LOOP
Scoot is working on further streamlining its operations. Using electronic returns received from ALBACS Messaging, Scoot’s IT team will be computerising the reconciliation of the payments that were claimed from customers with those that were received, flagging up the remainder for investigation. Inevitably, some Direct Debits fail and, in the case of the majority of banks who generate their failure reports via BACS Messaging, the notification can be received electronically. These reports detail the reasons for each failure – for example the account may have been closed or someone may have cancelled their Direct Debit instruction. In terms of sheer labour saving, Drew Mason believes that ALBACS Messaging will remove three days of clerical effort per week.
By feeding consolidated electronic exception reports from ALBACS Messaging into Scoot’s custom-built CRM system, it will also become easy to investigate these exceptions, because all of the information will be in one place. “We’ll be able to look at the exception reports together with any issues that have caused the customer to cancel their account. That will allow our customer services people to enter into a meaningful dialogue with the customer. Our use of ALBACS is about better customer service as well as better cash collection and cashflow management.”
Another change that is planned is a move to take advantage of ALBACS’ compatibility with paperless Direct Debit. With this arrangement the Direct Debit can be set up while the sales person is still talking to the customer on the phone or while the customer is signing up on-line. “If you can complete the sales process on the spot you’re more likely to succeed. Sending someone a mandate – even though it’s been completed and just requires a signature – is not as good from a sales perspective. It’s far better to sign them up straight away and then just send a written statement of what they’ve purchased.” Drew Mason points out that this method would also represent less hassle for the customer, and would allow them to start benefiting from Scoot’s service sooner. “It will add up to instant gratification for the customer and earlier payments for us.”
Scoot is also looking into the possibility of collecting payments from credit cards in the future and whatever other new ideas it wants to try, it is confident that ALBACS should be able to handle all the payments aspects. “We can implement changes to our processes and systems secure in the knowledge that we can just throw any BACS transactions at ALBACS. It does everything we could possibly need in that area”, says Drew Mason.
Summarising the benefits of ALBACS, Drew Mason confirms, “Without automated Direct Debit cash claims, we wouldn’t have been able to implement the differentiator that is at the core of our business: pay-per-lead charging. It helps that ALBACS is such a reliable, stable implementation – as far as I know we’ve never had to call Albany for support. This is the best kind of invisibility.”