Columbia House Automates Processing More than 250,000 Forms Daily

Today, Oct 2004 by Bue, Margaret

Founded in 1984, J&B Software offers complete, tailored solutions and services for mission-critical payment, transaction and document processing. Our flagship product, TMS Image(TM), is the only integrated, modular system that enables you to seamlessly add capabilities such as ARC conversion, electronic billing and payment, out-sourced online data entry and smart forms capture. TMS Image(TM) handles more than two billion checks annually and runs on all leading transport systems.

The Columbia House Company - with the largest direct mail order music and video club membership in the industry - has approximately 8.5 million members and a lot of paperwork. On a daily basis 120 Columbia House clerical employees process up to 100,000 deposits, 200,000 order cards and 70,000 new member applications.

Even with these volumes the goal is same day turnaround due to the businesses' daily batch process requirements. "While we don't want to sacrifice quality or customer satisfaction, we're very focused on reducing expenses. The biggest opportunity for us to cut costs was to improve and expand our automation processes," said Brian Callahan, director of clerical operations. Columbia House explored a number of ways to reduce costs including improved recognition on the orders and payments being scanned, the ability to scan other miscellaneous orders and scanning and performing recognition on all new member applications.

To accomplish these goals, the company is utilizing two Unisys NDP 115Os and two Unisys 500 scanners. "The Unisys solution provides the appropriate balance of cost and performance with the ability to scan as many as half a million documents per day. We handle this volume and additionally perform a Fed sort too," added Callahan.

Columbia House needed a customized solution because of its unique business requirements. "Unisys and other hardware vendors recommended J&B Software, because of the company's ability to customize their solutions and enable us to achieve our business goals," said Callahan. Columbia House selected J&B Software's TMS Image(TM) system for remittance processing along with TMS iPage(TM) to perform automated "smart forms" capture. The goal was to replace their old remittance software, leverage the scanners, apply advanced recognition technologies to automate forms processing, and use images for archiving.

"We engaged J&B Software as a consultant to help us identify where we had opportunities to improve processes. After gaining an understanding of the workflow, they helped us leverage our investment in their remittance software for other types of work," said Callahan. The business case showed that by investing $2 million Columbia House could generate annual savings of $1.4 million. "We planned to accomplish these savings by improving the recognition rate of scanned items, scan bonus certificates and other order items that had been manually keyed and to scan all new member applications," noted Callahan.

Columbia House has more than 300 different styles of drop cards, which are inserted into publications to solicit new membership applications. "Our marketing department utilizes different layouts for our drop cards to appeal to various audiences. They were reluctant to standardize their marketing efforts to accommodate our forms processing requirements. Using J&B's TMS iPage Doctus solution, we are able to keep everyone satisfied," Callahan stated.

"TMS iPage Doctus utilizes a capability that J&B calls 'document understanding' to automatically identify the type of drop card and its layout," said Callahan. With this knowledge, J&B applies Intelligent Character Recognition (ICR) technology to go after the enrollment data and enable high-speed automated capture.

With a timeline of eight months for implementation, the companies worked closely to keep the project on track. Communications and teamwork were key. Weekly project meetings, project schedules with milestones, and the flexibility to develop alternate solutions and processes enabled the team to be successful. All of the necessary functionality was delivered for Phase 1 and, more importantly, costs were contained.

In subsequent phases, DynaFind, developed by Mitek Systems, was successfully integrated into J&B Software's TMS solution to automate the capture of data from option card mailings. DynaFind automatically determines the form ID, which TMS matches with an image definition that enables ICR. Then, TMS updates a file with recognition results that are subsequently validated. If a document fails validation or does not meet the confidence threshold, it is routed for review and correction using TMS. "The J&B solution that we implemented in Phases 2 and 3 enabled us to apply ICR technology for full-page processing, which cut costs by reducing document sorting and data entry," added Callahan.

Columbia House declared the project a success with the following results:

* Realized a better ROI than originally projected.

* Scan all orders with 70% accuracy.

* Scan all new member documents for recognition, proofing and archival purposes.