Business-to-Business Billing No Easy Task

NEW YORK (03/10/2000) - Business-to-business Internet bill-payment systems are more expensive and more difficult to implement than consumer billing systems, a Gartner Group Inc. analyst said at an e-commerce conference here earlier this month.

The problem is that instead of dealing with individuals, such Internet billing involves interaction with varied kinds of payment systems and business processes.

The upshot is that implementing business-to-business online billing typically means having to re-engineer business processes, said Avivah Litan, the analyst at Stamford, Conn.-based Gartner who presented a report on this topic at the conference.

"There's a long way to go" before companies can take full advantage of Internet payment options, said Nina Vellayan, director of product development at the Student Loan Management Association (Sallie Mae) in Reston, Va.

Sallie Mae has already implemented a new billing system that gives more than 5 million student-loan borrowers the ability to pay their bills over the Internet. The system has worked so well that Sallie Mae is now trying to get more than 3,500 colleges to use its billing system to let students pay college-related bills over the Web.

But Vellayan said it will take more than a year before Sallie Mae is able to conduct similar transactions in a business-to-business setting.

Business-to-business billing is more difficult because business bills are often much larger than consumer bills - sometimes running into tens of pages long - and they are sent to accounts payable systems instead of individuals, Vellayan said.

Costs Underestimated

In addition, companies that outsource Internet billing systems to avoid implementation expenses often underestimate the cost, said Tony Sidiropoulos, director of marketing at Inc., an electronic-bill presentment and payment service bureau in San Antonio.

The company offers a range of consumer billing services to customers such as Sallie Mae and Chevron Corp. in San Francisco, but it hasn't begun pursuing the business market.

"The tendency [in business-to-business] is for people to look at the consumer market and say, ‘If you can charge them 40 cents [per] transaction, why can't you do the same for us?'" Sidiropoulos said.

The fact that online billing touches upon many different aspects of a business - such as payables, treasury, controllers and audit - will also require the re-engineering of a variety of business processes, the Gartner report said.

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