The combi solution – the new generation of hybrid mail

Introduction – A Competitive Market

The Swedish Post (Posten) acted early to adopt hybrid mail, a mail system that improved both the time efficiency and environmental friendliness of the postal service.

In 1993 the Swedish postal market was deregulated, allowing new competitors, such as City Mail, to hit the market. E-mail started to grow rapidly and Posten invested huge resources to become a part of the e-revolution. At the same time, every major bank was spending tremendous sums of money to create new Internet Bank solutions. These investments paid off as more and more people signed up for on-line internet bank accounts.

“Suddenly” the market had changed. We now had competitors that were quickly gaining market share whilst the rapid growth of internet banking posed another threat.

During this period Posten spent a lot of money on different e-solutions. Posten created an Internet bank solution that could connect to all the major banks. It was also one of the major players in supporting e-invoicing between businesses (EDI). Despite these positive steps to apply cutting edge practices, all of Posten’s new solutions faced inherent structural problems. Hybrid Mail, Internet Bank solutions, and EDI were placed in different and almost water proof departments of Posten. As a result, there were very few synergistic opportunities being generated between departments.

Furthermore, Posten’s major customer in hybrid mail had realised the potential of e-distribution. It sought to decrease its distribution costs through e-distribution and began looking at other competitors beside Posten for physical mail distribution. The modern customer wanted a modern hybrid mail solution that offered all of these benefits.

The Response – Modern Hybrid Mail

 

 

The Hybrid Mail management team and I lobbied Posten to invest in a modern hybrid mail solution. We succeeded in getting support for a proposal that would incorporate e-distribution and postage optimisation, even though this solution ran the risk of actually decreasing postage sales in the short term. The strategy was to keep the customer by providing an attractive hybrid mail solution. By doing so, we could ensure that physical volumes of mail would continue to be delivered by Posten whilst we also earned money from e-distribution.

Posten made a major investment in software (Streamserve) in order to modernise the old hybrid mail engine. The software provided the functionality and flexibility necessary to harmonise with existing products to create a new solution; a solution that would optimise business processes and reinforce competitive advantages for Posten’s customers.

The Combi Solution

 

 

The Combi Solution that hit the market in 2006 focuses on   functionality and making it simple for the customer. To simplify for the customer, the solution comes with one contract, one file, one integration, and one price. By combining stand alone products, the customer only needs one contract with Posten to get multiple output channels, which include Internet Bank. By using the capabilities within the Streamserve product it is possible to use the same file for all distribution. Moreover, we only have to integrate it once for all the different outputs. All distribution, excluding postage, has the same price on a sliding scale based on volume.

The sending customer does not have to separate the file; removing the hassle of placing one for e-distribution and one for the physical distribution. The file is handled within the Combi Solution where it is sorted according to the recipient’s requirements into Internet Bank, e-mail, SMS, and EDI.  All remaining documents are then sent through the regular mail.

The target market for Combi Solutions is administrative mail, which demands a certain level of distribution security. To meet this requirement, all e-distribution comes with a reject handling failsafe. If an e-mail, SMS or Internet Bank invoice does not reach the electronic recipient it will be transferred back into the physical mail stream and delivered through the regular mail.

Customer Friendly

 

 

By adding e-distribution into hybrid mail, Posten has created a  modern hybrid solution. Of course, the challenge of a free market where customers are looking to other and possible cheaper distributors of physical mail still remains. The Combi Solution attacks this challenge by slaughtering a couple of holy cows in the postal  world. Customers can now optimise their physical volumes by either time or volume as a part of Combi Solution base functionality. This means that the customers can configure every hybrid mail stream to maximise utilisation of the current price model, according to the set rules, for distribution with Posten. For instance, it is possible to save different volumes and release them when the volumes have reached  a certain level with a lower price. It is also possible to co-sort  documents so that they are placed in the same envelope in order to save postage.

Future Opportunities

 The Combi Solution is the first generation of a modern hybrid mail system. As we sit here today, we are shaping the next version to suit customer requirements and Strålfors  capabilities. There are a few trends and obstacles that the next generation will focus on:-

Trans-promo: First, we will enhance the possibilities within the Combi Solution to incorporate promotional material. Techniques are available that allow the customer marketing department to use the space in the  ttransactional document to promote products through a simple  user interface. The trans-promo can be individualised by using the information within the transactional document and/or information coming from separate databases.

 Colour: The Combi Solution offers colour today but the price is still a little too high to make the customer move from customised off-set  paper to colour printing. However, the printing market is getting close to delivering high speed colour printing for a price that the customer is willing to pay. The next generation of hybrid mail will have the capability to use colour printing on all documents and thereby increase the possibility to individualise the document and to reduce the amount of customers requiring customised papers and envelopes. With a full colour printing facility, printing efficiency will increase whilst the logistical complexity surrounding customised paper will decrease.

More power to the end user: Today, end users can choose whether they want their invoice to go directly to the bank on-line in the Internet banks. At Strålfors, we are looking to expand this power of the recipient by offering our customers a solution for their volumes where the recipients choose on-line what their choice of distribution will be.

Internationalisation:The economy is global and in the near future Europe will be liberated from the postal monopoly. The next generation at Strålfors will focus on providing a global perspective for our international customers. The customer will then only need one partner, Strålfors, to handle e-distribution, printing, and optimised distribution in each country. Thus, our service will make their businesses not only more cost and time effective, but also more environmentally friendly as we increase the volume of documents being transported electronically.

Even though the postal market is opening up, international rules that hinder a true development of global hybrid mail still remain. The UPU is currently trying to create a centralised international hybrid solution that also will handle Terminal Dues. This begs the question, why does this counterproductive protectionism persist? By simply solving the issue of handling Terminal Dues for international hybrid mail, Strålfors and our competitors will be able to truly revolutionise hybrid mail as we know it, providing benefits to business, the environment and our global clients.