E-services see boom in busting economy

  • 2009-05-07
  • By TBT Staff
RIGA - At a time when many companies are seeing a loss, the e-services sector is seeing a profit 's a surprise to everyone, including the e-services companies themselves.
Itella Information is one of the companies in Latvia that has seen their turnover in 2008 increase by 22 percent, and profits by 48 percent, compared to 2007. The company, owned by the government of Finland, has not only increased their profits by using electronic services, but studies have shown that electronic invoicing may decrease carbon emissions by up to 90 per cent.

Itella Information has studied the carbon dioxide emissions of the electronic iPost service and the traditional paper process in Finland. According to the results, the carbon dioxide emissions from the production process of a fully electronic letter are approximately 40 per cent lower than those of a paper letter delivered in the traditional way.
"It was a surprise for everyone here in the Baltics that we turned out to be so crisis resistant. In Finland they are reading newspapers and wondering what is going on and it somehow doesn't fit together that we have profit in our company this year based on the Baltic economy," said Aldis Greitans, board chairman of Itella Information in Latvia.

"We're seeing about a 20 percent growth each year. The only problem is that turnovers are only proportional to the size of the country, and Latvia is small, so we're not making billions," said Greitans.
Already this year, Itella Information has gained over 500,000 e-service contracts, up from 6,000 in 2001. This shows that not only businesses are using electronic billing, but ordinary citizens have started using e-services as well.

The reason for the popularity and profitability is simply logical, Greitans told TBT.
"Everyone can use e-billing for all kinds of payments, saving time and resources."
"We receive invoice file from customer, the big secret of our business is we provide something called multi channeling. They want to see this bill in electronic form. [In the] initial process we divide the invoice into two parts, one part going to electronic versions and one converted to a print version."
"The electronic variant is converted into a file which looks like the printed and a notification is then sent to customers to see that they can pay online," he said.

The innovative system, started by Scandinavian companies, has allowed Itella and other e-service leaders to rise above competition and introduce lower fares for clients. Due to the precision of e-billing, clients are more likely to use e-services in Latvia as it means that fewer employees are needed for the billing process.

"Then there is one more system called the gyro system for the collecting of specific payments. For example traffic penalties can be paid this way because it has to be reconciled with less mistakes very precise and very fast so we are using this interface for that," said Greitans.

The Secretariat of the Special Assignments Minister for Electronic Government Affairs also announced recently that the number of Latvian banks allowing customers to use the e-banking systems has risen from two to three, while Itella's e-billing is used by 20 local banks.