Solution-based outsourcing

Today, Jun 2003 by Lindsey, Michael

Increasingly, corporations are turning to outsourcers to meet critical business needs. Corporate financial pressures, technology constraints and the desire to refocus on core competencies are driving the migration of business functions to outsourcers, spawning a multi-billion dollar industry.

As recently as 25 years ago, most transactions were processed either by a bank or by corporations "in house". Today, outsourcing is a common component of strategic planning for most organizations.

Thousands of outsourcers have emerged, performing every conceivable business function. Most offer a narrow product mix, the niche approach. Outsourcers that offer multiple products generally have one or two specialties with minimal capabilities in other areas.

In the financial services industry, outsourcers provide retail lockbox, wholesale lockbox, data entry, traditional AGH, e-payments, information reporting, wire transfers, check processing, bill print/mail, credit card services, securities processing to name a few. Only the very largest outsourcers offer services beyond a local or regional level. Geography is not a factor for many services due to their "electronic" nature, but for paper-based services, as with real estate, the most important factor is location.Over the past 20 years, customers and prospects have come to us seeking outsourced services for disaster backup, full-page forms (ICR) processing, retail lockbox and data entry.

Last year we formed Convergent Payment Processing Services, an outsourcing company. The initiative has resulted in new customers for both J&B Software and Convergent, and opportunities to provide additional services (remote data entry and disaster backup) to existing customers. Our strategy is to leverage the investment J & B Software has made building a portfolio of payment and document processing software and constructing a development engine.

Convergent's mission is to provide a full range of high quality, cost effective outsourcing services from a geographically dispersed network. From a product perspective, Convergent offers:

* Wholesale and retail lockbox processing

* Check processing

* Full page document (ICR) processing

* ARC conversion

* iPay (EBPP)

* Remote data entry

* Image archiving, web access, interactive exception handling

* Disaster backup processing

With respect to the network, we anticipate growth from two to ten U.S. locations. The network is a hub-and-spoke configuration; each site has high-speed Internet lines to a remote data entry facility and our U.S. network. Central administration, client servicing, network monitoring and troubleshooting are handled in Blue Bell, PA.

We provide straightforward processing applications, plus a variety of customized services. Here are examples:

* Wholesale lockbox processing, with the check accompanied by a four-page form requiring ICR

* Low-volume retail lockbox processing for a property manager requiring physical deposits to 150 demand deposit accounts

* Check processing for a small bank, including in-clearings, out-clearings, teller work from multiple locations, statements and return items processing

* Remote data entry (online) from our subsidiary in India for a company with multiple U.S. processing sites

* TMS iPay provided in an ASP model for a utility

* Investment account deposit processing for a broker, with interactive exception handling and ARC conversion

* Mortgage payment processing with ARC

* ARC processing via ASP model

* Wholesale, retail, ARC processing for a branch bank, with disaster recovery for the main location

* "Hot backup" processing for a large single-site retail lockbox application with ARC conversion, plus DR and peak processing

Why do we want to provide all these services? The answer is twofold and simple:

* Because we can. With J & B Software as the parent, Convergent has an almost unlimited supply of software and development support. J & B Software provides TMS Image(TM) application software and enterprise modules supporting Convergent's basic product functionality, plus an inventory of customized applications.

* Because customers want solutions not products. Outsourcing is easy if the provider has a square peg and the customer has a square hole. Most times it doesn't work that way. With our array of software, services and locations, we are providing hybrid, tailored solutions.

Ultimately, our mission at Convergent is to provide unique, value-added processing services on an outsourced basis. We are dedicated to a solutions-based approach to our customers; if that seems somewhat contrarian, then so be it.

Michael Lindsey is director of Outsourcing Business Development for Convergent Payment Processing Services, Inc., a division of J & B Software, Inc. He can be reached at (312) 986-8145 or MikeL@TMSImage.com.