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Speed of Change 3 – A Whole New Pandora’s Box

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Submitted by Harry Stephens, President/CEO of DATAMATX
April 26, 2018

It’s been over a decade since I wrote a column titled “The Speed of Change.” In it, I discussed how technology was completely changing our relationship with time, which in turn, was changing our business processes dramatically.  In 2007, the technologies we were figuring out how to integrate were the Internet, PDAs and the new iPhone. Fast forward four years to 2011, when I wrote a column called The Speed of Change 2.  In 2011, it was a whole new set of tools, like mobile applications and media tablets, social networking and cloud services, that were demanding our attention.  Within a short time, these tools, and more, were all part of our daily lives, setting a completely new standard.

Of course, since 2011, the speed of change hasn’t stopped. In fact, it’s accelerated. And while things have become easier in many ways because of these advances, things have also become scarier. In fact, what I am calling The Speed of Change 3 has opened a whole new Pandora’s box.  While technological advances have provided our businesses with the potential to create more efficient systems, they have also opened new avenues for data protection threats.

We all read about these data breaches daily. Recently, I just read that the average data security breach takes less time to pull off than it does to prepare a cup of coffee, with 93 percent occurring in less than one minute. Conversely, it can take a business a very long time to recover from one. In the business we are in, where sensitive data is part of our daily work, a data breach would spell disaster. Therefore, every company, no matter what size, needs to have a security program in place. While there is no one security product or control that can prevent data breaches, it is critical that in our type of business we do what it takes to maintain the highest level of security possible with processes and procedures that eliminate vulnerabilities in a timely manner.

At DATAMATX, we have always dedicated extensive resources and implemented additional processes to ensure our clients continue to have the highest level of confidence in the managing and processing of their data. This has included successfully meeting rigorous compliance requirements year after year with third-party audits to continue to achieve FISMA, PCI DSS 3.2 and SOC 2 + HITRUST CSF certifications as well as investing heavily in cyber liability insurance.

It also includes making continued extensive upgrades to our comprehensive information security policies and procedures, establishing a continuous monitoring program and developing a risk based approach to protect the data and physical security of our three facilities. Additionally, for many years now, we have had a disaster recovery plan in place, with three comprehensive, fully redundant facilities and now have a more defined business continuity plan to ensure we meet the ever increasing client SLAs and audit requirements. To be sure, all of this took an investment on our part in time, effort and money.  But what is the potential cost of a data breach in terms of time, effort and money—and a company’s reputation? I shudder to think. In a recent meeting at our facility, a cyber insurance expert we invited to speak presented a data breach case study of 50,000 PII records being exposed with a final cost of $29 million dollars with crisis management, customer notification, lawsuits and regulatory fines being paid.

Technology is constantly changing and with those changes come security and privacy threats every organization faces. At DATAMATX, we focus a great deal of our attention on ensuring data security compliance standards. And, yes, it requires an investment from a business standpoint that affects the bottom line.

However, if you want to play the game today in the service provider industry—and not be viewed as simply the low-cost provider—you must think about whether your company is doing enough to protect your clients’ data. Because it is their expectations that security is an integral part of your business model that has set the bar. So, let me leave you with this thought:  If you want to be successful in the transactional and direct mail business, then it is important to understand that security and compliance are now in the driver’s seat—and the real bottom line.

Until next time – Harry

Harry Stephens

Harry Stephens is President/CEO, and founder of DATAMATX, one of the nation’s largest privately held, full-service providers of printed and electronic billing solutions. As an advocate for business mailers across the country, Stephens is actively involved in several postal trade associations.  He serves on the Executive Board of the Greater Atlanta Postal Customer Council, Board Member of the National Postal Policy Council (NPPC), Member of Major Mailers Association(MMA), and member of the Coalition for a 21st Century Postal Service.  He is also immediate past president of the Imaging Network Group (INg), an association for Print/Mail Service Bureaus.  As an expert on high-volume print and mail, he has frequently been asked to speak to various USPS groups, including the Board of Governors, about postal reform and other issues affecting business mailers.  Find more information about DATAMATX at www.datamatx.com. 

Harry’s Corner – Here We Go Again – “6-2-5” is Back

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Submitted by Harry Stephens, President/CEO of DATAMATX
June 19, 2017

In my experience, few things are more true than the fact that knowing you need to do something—and then actually doing it—are two very different things. There is perhaps no better example of this than the longstanding (and ongoing) conversation about the financial difficulties of the U.S. Postal Service and what to do about them.

I read two articles on the subject in the Washington Post and The Wall Street Journal this past month, reporting that the latest entrant into this often controversial conversation is President Trump, by way of his 2018 budget plan. The plan leaves the door open for reducing the current six-day mail delivery “where there is a business case for doing so.”  You can expect that if this proposal materializes it will be met with upset, just as it did when then Postmaster General Patrick Donahoe attempted to unilaterally end Saturday mail delivery in 2013. That attempt stirred up strong resistance from members of Congress and the National Rural Letter Carriers’ Association, among others, and ultimately failed. Since then, proposals to address the Postal Service’s financial woes have not included reducing delivery.

Back in 2008, I floated the idea in this column of eliminating Wednesday delivery, recognizing that direct mailers prize Saturday delivery, when most of us are at home and have more time to look at our mail. Then in 2009, I wrote another column urging the need to take a hard look at eliminating Saturday delivery, and to step forward and propose other cost-cutting ideas if you have them.  Mail is important to all of us for many different reasons, so I am sure reducing mail delivery is still a difficult pill for many to swallow. However, I continue to maintain it may be a necessary step to help end the financial struggles of the USPS, which have been a problem for more than a decade now. We need to accept that we are going to have to reach a compromise somewhere. Corporate enterprises as well as postal customers, especially rural America, may have to give up something to keep postage rates affordable.

We all know that having a difficult problem to solve can be overwhelming and even paralyzing. But even taking small steps can make a difference. It reminds me of a story I like about a little boy on a beach littered with washed-up starfish. As the boy was throwing them back in the water one by one, a man came up to him and said, “Son, what are you doing? There are thousands of starfish on this beach. You can’t possibly make a difference.” The boy picked up a starfish and threw it in the water and replied, “It made a difference to that one!”

Of course, eliminating one day of mail delivery—whether that day is Wednesday or Saturday or another option—won’t solve all the financial concerns of the USPS. But when you consider that it will take carriers off the road for one day a week, and the savings that will be realized in terms of labor costs, gas and truck maintenance, it will certainly make a difference. And for that reason alone, I think it is worth talking about again.

My fundamental point has been and still is this: The financial viability of the USPS isn’t just the USPS’ issue to solve. It is an issue for everyone who relies on the mail, whether for business or personally. It is our issue, and I think the one thing we can agree on is that something needs to be done to address it. The problem is that actually doing something, as we all know, is a very different thing.

Until next time – Harry

Harry Stephens

Harry Stephens is President/CEO, and founder of DATAMATX, one of the nation’s largest privately held, full-service providers of printed and electronic billing solutions. As an advocate for business mailers across the country, Stephens is actively involved in several postal trade associations.  He serves on the Executive Board of the Greater Atlanta Postal Customer Council, Board Member of the National Postal Policy Council (NPPC), Member of Major Mailers Association(MMA), and member of the Coalition for a 21st Century Postal Service.  He is also immediate past president of the Imaging Network Group (INg), an association for Print/Mail Service Bureaus.  As an expert on high-volume print and mail, he has frequently been asked to speak to various USPS groups, including the Board of Governors, about postal reform and other issues affecting business mailers.  Find more information about DATAMATX at www.datamatx.com. 

Harry’s Corner – 47-47-6 Unintended Consequences

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Submitted by Harry Stephens, President/CEO of DATAMATX
November 21, 2016

We held our annual INg meeting at Orlando in conjunction with this year’s Graph Expo in September. One of the speakers at our meeting was a labor attorney and among the many things he spoke to us about was the upcoming Overtime Rule. For those of you that may not know specific details on this new rule, starting on December 1 2016, the salary threshold to avoid paying overtime will move to $913 per week (an annual salary of $47,476) from the current $455 per week.  Right now, hourly workers, lower-wage earners and non-managerial workers must be paid 1.5 times their hourly wage when they work more than 40 hours in a week. Under the new rule, an estimated 4.2 million workers, including those on salary, will be eligible for overtime.

On November 10th, at the Fall Board of Director’s meeting for the Georgia Chamber of Commerce, where I am on the board, the issue came up again. The Georgia Chamber of Commerce represents the unified voice of Georgia’s business community with the motto “What’s good for business is good for Georgia” driving its policy and legislative direction to ensure the future of economic mobility for all Georgians. So it makes sense that business and job creation are always a focus. I brought up this impending Overtime Rule at the meeting, encouraging both the local and national Chamber of Commerce to vocally oppose this type of job creation loss initiative as it will certainly have unintended consequences, hurting the people it intended to help.

For example, in lower-paid jobs where the minimum wage is also increasing, employers are put in the difficult situation of having middle managers making considerably less per working hour than new hires. Think of the restaurant industry where wages may be lower, hours are long and profit margins very thin. While this rule is meant to increase take-home pay, these changes may limit employment and advancement opportunities in this industry and others like it. Another good example—college graduates looking for their first job.  An employer will certainly have to think twice about hiring an inexperienced worker who needs time to “learn on the job” for an annual salary of $47,476.00 or unbudgeted overtime. Jobs are hard enough to get when you don’t have the right experience. This rule will make it even more difficult. Unintended consequences. Hurting the people it intended to help.

For every business, this rule causes a number of consequences as well, particularly when it comes to payroll. We essentially have two choices. If the increased salary threshold creates newly non-exempt employees to stay compliant, we need to either pay employees higher salaries, or pay overtime wages.

In preparation, classifying employees correctly as to whether they are exempt or non-exempt will be extremely important, particularly if you are in a business that has peaks in productivity at times that require employees to work longer hours, like month end or holidays. Because of this, I recommend checking out the Department of Labor or your state’s wage enforcement agency to get the exact requirements. The last thing a business needs is unexpected financial or legal consequences for not clearly stating an employee’s classification, entitlement to overtime and tracking of such.

It will also be important to have clear communication with employees about record keeping. For some who have been proud of being a “white collar worker” now required to keep track of time, this can be difficult. Explaining the rule and how it will affect them and your business will ease any misconceptions they may have about any changes in job description or pay.

Oh, and another piece of “good news.”  The minimum salary threshold will automatically increase every three years based on wage growth. The first automatic increase will happen on Jan. 1, 2020, which means more employees will become exempt as the threshold rises. Now, if you think you are in the clear because you are a small business, I have more “good news.” The Department of Labor FAQ fact sheet does say that “the proposed rule [applies] to employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more, and certain other businesses.” Ok. If your business makes less than $500,000 of annual revenue, is it exempt? It appears the answer is still no. Under the Fair Labor Standards Act (FLSA), individual employees may still be “covered in any workweek when they are individually engaged in interstate commerce, the production of goods for interstate commerce, or an activity that is closely related and directly essential to the production of such goods.”  Like I said earlier – research the information on the Department of Labor’s website or your state’s wage enforcement agency to get the exact requirements of the ruling.

There is no way around the fact that this ruling is bad for business—especially small to medium businesses that have a hard enough time growing their businesses as it is. We need dedicated employees who consider themselves professionals and want to work the long hours often needed to get ahead and grow in their profession. Employers will now have a hard time giving them that choice. Instead of benefiting workers, the rule takes away flexible schedules and maybe even certain career pursuits. For businesses, it places yet another financial burden to manage. Perfect examples of unintended consequences hurting the people it intended to help.

Until next time – Harry

Harry Stephens

Harry Stephens is President/CEO, and founder of DATAMATX, one of the nation’s largest privately held, full-service providers of printed and electronic billing solutions. He has been active in the Atlanta business community for over 40 years in various professional and trade organizations, most recently as a board member of the Georgia Chamber of Commerce.  As an advocate for business mailers across the country, Stephens is actively involved in several postal trade associations.  He serves on the Executive Board of the Greater Atlanta Postal Customer Council,  Board Member of the National Postal Policy Council (NPPC), Member of Major Mailers Association(MMA), and member of the Coalition for a 21st Century Postal Service.  He is also immediate past president of the Imaging Network Group (INg), an association for Print/Mail Service Bureaus.  As an expert on high-volume print and mail, he has frequently been asked to speak to various USPS groups, including the Board of Governors, about postal reform and other issues affecting business mailers.  Find DATAMATX at www.datamatx.com

 

Harry’s Corner – Adding Value with 3-4-1 is Another Win-Win

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Submitted by Harry Stephens, President/CEO of DATAMATX
October 5, 2015

I have just finished my usual round of September travels—starting with the Major Mailers Association, the National Postal Policy Council (NPPC) where I serve on the board, then on to the INg workshop and finally a visit to Graph Expo to see what is new. I always learn a lot on these whirlwind trips and this one was no exception. This year there was a great deal of buzz around inkjet technology and how it makes it more affordable to add color to our documents to keep print alive and relevant. It is a proven fact—color delivers value. Of course we still need to find a way to communicate the value it has in order to charge for it. That’s why the leaders in our industry are gathering as much information as possible on how to produce color at a reasonable cost—and work to make informed decisions on investing in equipment that allows for more affordable full color capabilities.

Delivering value was also the buzz at the NPPC meeting. James (Jim) P. Cochrane spoke to us about the need to make mail more relevant. We have to find ways to add more value to mail in order to keep it in the system. Jim is a 41-year veteran of the USPS and has been acting chief marketing and sales officer and executive vice president (CMSO) since April 2015. He reports to the Postmaster General. What I liked about Jim is that he understands the need to be flexible and change things if needed. He directed the advancement of new mail intelligence, engineering systems, information technology systems, payment technology, secure digital solutions and corporate information security to meet the changing needs of today’s marketplace.

As Jim spoke about relevancy and value, what immediately came to my mind was “2-4-1 and Everybody Wins.” It was the title of a column I wrote for this very publication four years ago. 2-4-1 came about at a Major Mailers Association meeting where Paul Vogel, the president and chief marketing/sales officer for the USPS at the time, spoke about improving the USPS experience for its customers. After his talk, one member brought up the idea that perhaps the USPS would approve allowing business mailers to mail a two-ounce piece at the one-ounce rate. Every major mailer at the meeting liked this idea, the USPS implemented it and it was highly successful.

I began to think about all I have been learning about inkjet technology having been at the recent Inkjet Summit and its ability to lower the cost per page; and if 2-4-1 was a success in increasing mail by making mailing more documents affordable, why build a better mousetrap—just make it larger by now allowing three ounces at the one-ounce rate. That would give business mailers a little more latitude and alleviate the worry of losing the discount to mail at the single piece rate if they were slightly over the two ounces—adding value. It would help support the demand for creating (and mailing) more documents in color—adding value. It would allow mailers to get the mail to the recipient faster as 3-4-1 would be at the threshold of the cutoff for Standard Mail—adding value. Of course, it would require a 6 x 9 envelope, but many folks are used to receiving transactional bills that way already.

As it turned out, adopting the 2-4-1 suggestion on the part of the USPS was easy. First, there were no legal restrictions to worry about and it didn’t need the PRC to rule or Congress to approve, as it was not a rate increase or a mandate. So adopting 3-4-1 could happen just as smoothly.

At these meetings, we openly discuss ways to create more value with printed mail. So after Jim spoke, I made the suggestion that moving up an ounce to ‘3-4-1’would be a serious additional stimulus for marketing via First Class. As I said earlier, I think Jim Cochrane is a person who welcomes changing things if it makes sense—and 3-4-1 certainly does. In 2011, in this very publication, I predicted 2-4-1 would be a win-win for mailers and the USPS and it was. I think 3-4-1 will be a win-win as well—providing the extra value needed to keep printed mail relevant.

What’s your opinion on 3-4-1? I am interested. You can email me at hstephens@datamatx.com. I hope to hear from you!

Until next time – Harry

Harry Stephens

Harry Stephens is President/CEO, and founder of DATAMATX, one of the nation’s largest privately held, full-service providers of printed and electronic billing solutions. As an advocate for business mailers across the country, Stephens is actively involved in several postal trade associations. He serves on the Executive Board of the Greater Atlanta Postal Customer Council, Board Member of the National Postal Policy Council (NPPC), Member of Major Mailers Association(MMA), and member of the Coalition for a 21st Century Postal Service . He is also president of the Imaging Network Group (INg), an association for Print/Mail Service Bureaus. As an expert on high-volume print and mail, he has frequently been asked to speak to various USPS groups, including the Board of Governors, about postal reform and other issues affecting business mailers. Find DATAMATX at www.datamatx.com.