Saving the post system

12 Jan 2012

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Accenture Ireland managing director Mark Ryan and Brite:bill co-founder and CEO Alan Coleman

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Young Dublin start-up Brite:bill took a strategic change of direction and its technology is now being piloted by two of the world’s largest post offices.

There’s a term in the start-up world that became quite fashionable in the last year or two. That word is ‘pivot’ and is usually applied when a technology company realises it needs to change direction or focus in order to secure a more viable or relevant future.

In the case of Dublin tech company Brite:bill, the opportunity arose to switch from being a business-to-consumer (B2C) outfit to become a firm that would instead work with other businesses to serve consumers better.

The work of Brite:bill

Brite:bill was previously known as Getitkeepit and via the internet helped consumers to take charge of their billing paper trail and instead manage and pay bills via an internet portal. It worked successfully with banks and service providers like telcos to streamline how people paid bills.

However, company co-founder and CEO Alan Coleman realised there was a bigger opportunity, a global opportunity in fact, to help post offices around the world stem major losses due to declining postal volumes in a world gone digital.

A successful fundraising in 2010 was the opportunity to change focus.

Using Brite:bill’s technology, direct billers such as telcos and utility companies can provide a suite of online analysis tools that incentivise customers, both consumer and corporate, to adopt electronic billing and payment, reducing costs while also offering the potential to grow revenues through their online channels.

Brite:bill and Accenture partnership

THE DIGITAL POST OFFICE ERA – MOVING BEYOND PHYSICAL MAIL

$5.1bn: Losses by the US postal service in 2011

50pc: Global decline in postal volumes by 2020, according to Accenture

6.9pc: Annual revenue decline among post offices in Europe

€1.2m: Amount of venture capital raised by Dublin start-up Brite:bill via the Ulster Bank Diageo Venture Fund

Coleman, who previously worked with Accenture, got in touch with Accenture in Dublin. He knew the company had built up a business working with post offices and decided to pitch at forging an alliance.

"Accenture serves 17 of the world’s largest postal agencies and were aware of the challenges post offices were facing and had begun talking to a number of other software providers to enhance the digital capabilities they could offer," he says.

"They had spoken to major providers like Adobe, Pitney Bowes and Silicon Valley start-ups like Zumbox, Manilla and Doxo.

"We were given the opportunity to present our technology and we were ultimately selected by Accenture to be their technology partner. We signed a mutually exclusive global alliance agreement with Accenture in January 2011."

Accenture Ireland managing director Mark Ryan says that Brite:bill’s technology addressed a core business problem postal providers were facing and offered a route to future revenue growth.

It emerged earlier this week that Accenture is creating 100 new technology jobs for its Irish workforce during 2012, which will add to the positions created in the Accenture Analytics Innovation Centre that opened in Dublin last year. The company plans to hire graduates and experienced specialists in Java, SAP, cloud computing, mobile and workplace collaboration technologies.

Volume of post

The scale of the challenge facing post offices is enormous, says Coleman. "Post offices are hemorrhaging cash. The US Postal Service lost $5.1bn in 2011. Around the world, post offices are losing revenue and staff. Accenture forecasts that there will be a 50pc decline in postal volumes by 2020."

In the past year, volume trends show postal providers experienced revenue declines of 2.5pc in North America and 6.9pc in Europe.

The link between GDP growth and postal revenue growth has been broken. As GDP improves, postal volumes will continue to decline. Postal providers need to seek new markets to compensate for loss in volumes in their core domestic markets. One of the routes forward is B2C e-commerce.

"We believe that with digital mail technologies that allow consumers and businesses to manage their billing and improve their relationship with brands, there is an opportunity to capture and manage the loss and participate in the next phase of communications."

Coleman explains by pointing out a typical relationship between a mobile operator and a customer.

"What operators really care about is ensuring customers pay on time, consume more services and not call their call centres. The bill should be a regular touchpoint and could be used not only to collect revenue but also add value, answer questions and offer new things, such as better roaming packages. Digital mail is an opportunity to allow brands develop broader relationships with customers."

Options for postal providers

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Ryan says the options available to postal providers are to either try and regain market share or do something different.

"This all depends on how open post offices are to change. What’s happened is the postal industry has gone from a situation where the digital space was merely interesting to a situation where it has led to a rapid decline in their core business. They have to embrace
change and can no longer ignore it.

"There is a link between postal volumes and GDP. It used to be the case that if GDP went up, postal volumes went up. But that relationship is broken. Even though GDP is recovering, postal volumes aren’t."

Coleman points to the major postal strike in Canada this past year, noting that 250,000 people switched to digital channels and never came back.

"The digital channel is where people are increasingly accomplishing every day things, like paying a bill. Many post offices we are dealing with are driven to be innovative and are embracing this. They are investing heavily to make sure they are positioned for the future. They are doing so to be relevant in terms of how people pay bills, the relationship they have with service providers and their role in linking the virtual world with the physical world.

"The vision we have is that the postal provider should be the conduit for the bigger conversation. Traditionally, the post office was the hub that integrated consumers and business and drove commerce and it is no different to what they can do in the digital space.

"If you think back to when email got mass market appeal and suddenly became the hub for work and personal communication. That has changed in recent years because of the rise of social networking, and all that’s left is junk mail, spam and lots and lots of important information, such as receipts for payment, etc.

"The inbox is not the environment for this information. Postal providers can help people to manage and understand the important things they need.

"Postal providers used to be the physical link between the business and the consumer. They can still do that if they embrace the virtual world, too," says Coleman.

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com