Verizon Business Finds Discipline with SAP – A Case Study
- Streamline and standardize global financial reporting and operations
- Implement a professional services organization
- A business model to reengineer and consolidate global processes
- A full-cycle implementation of SAP
- More consistent and timely financial reporting
- Standardized financials across global business units
- Improved business processes; better management of people and resources
The Enterprise Solutions division of Verizon Communications is expanding its global services capabilities, and a massive SAP implementation supported by CSC is providing more consistent financial transactions.
Enterprise resource planning projects are notoriously challenging, especially on this scale. After the $8.6 billion acquisition of MCI in 2006, Verizon needed to integrate hundreds of disparate financial systems scattered across the globe. By any measure, the implementation, called nSAP, was enormous. Verizon Business has 24,000 users, 217 company codes, 140 countries, 61 currencies and 23 languages, with the business and finance units running 19 different modules of SAP.
The goal of the project? “One single version of the truth,” says Mike Stefanski, senior vice president and CFO of Verizon Telecom and Business. For Verizon Business, this means having a single set of financial reports across all business units and geographies to ensure consistency and accuracy. Stefanski says, “The biggest business benefit nSAP brings to us is the consistency of workflow and the ability to route approvals that have to go all the way through the system. As opposed to being a chunky process, now they route through the business very cleanly and smoothly.”
Leveraging the strengths of one of the world’s largest IP networks, Verizon Business provides professional services to thousands of customers. The need for nSAP grew from the aftermath of the merger with MCI. Scott Pelham, executive director of financial systems at Verizon Business, says, “When we came into that environment, we found that we had 46 different ledgers in place on the MCI side, so consolidation was a must. There were so many manual processes, spreadsheets and back-page normalizations happening that it was a very difficult and manual environment in which to operate.”
Verizon Business has successfully integrated MCI’s operations and standardized global financial processes on SAP. Pelham says, “nSAP provides the operational discipline of a single code block or data set across the company so that when you’re looking at something anywhere in the world in SAP, it’s the same.”
Streamlined systems are essential to running a successful operation, adds Tony Skiadas, vice president and CFO of Verizon Services Operations. For example, standardizing accounting, and payables into one system lets the company maintain tighter control of its financials. “nSAP delivers more simplicity around not having to go to multiple places to get your results. It’s helping streamline our reporting and our analysis by getting it in one place under a single architecture,” he says.
The nSAP project was remarkable not only for its immense scope, but also the relatively short time frame it took to complete, less than 18 months. CSC provided essential technical support to Verizon Business to get the project completed quickly. Pelham says a key to this was having all the resources and a team structure in place. “CSC was able to bring valuable resources to bear in a timely fashion. We’d ask for something, and they’d bring the right people in.”
CSC’s role was to envision a process model to reengineer and consolidate global business processes in areas such as finance, procurement and invoicing. Steve Sparling, a vice president in CSC’s Technology and Consumer Group, says, “Verizon had the capability, but they did not have the business model. CSC helped create a foundation to allow Verizon to add functionality to its business.”
The project’s main thrust was the implementation of SAP ERP Central Component (ECC) 6.0, along with SAP modules that enable functions like production planning and asset management. For example, nSAP can record, translate and handle every currency in the world, and local currencies are consolidated and reevaluated in U.S. dollars. With a common set of financial reporting and master data achieved, Verizon Business manages resources and people more efficiently, while improving controls and compliance.
Valued business partner
CSC served as a valued business partner, according to Stefanski. Looking to get as much off-the-shelf functionality out of the system as possible, CSC helped Verizon prioritize and manage the entire workflow as well as manage all the constituents.
“The discipline and the vision CSC provided of how you can implement an overall ERP system were very critical for us.” Stefanski also praises CSC’s thought leadership role. “CSC understood what our objectives were, where we needed to go and what we were trying to accomplish. They brought a partnership mentality to the project as opposed to a vendor mentality, and that really helped to get the project completed successfully.”
CSC’s deep knowledge of the business was important to Verizon’s executives. Skiadas says, “CSC’s insight into the system and our own processes, and their experience of having lived through this with others, was very instrumental for us.
CSC knows the processes and how others have used SAP, so by bringing all that together they were able to be a trusted adviser to help us get through this.”
Successfully running financial operations in SAP has proved vexing for many big companies, but not Verizon Business. Pelham says, “A significant amount of SAP implementations — or any ERP implementations — fail out of the gate. The secret sauce in this is getting the team and the partnering, and CSC and SAP were outstanding in helping us to do that.”
The key players at Verizon Business agree that an important factor in the success of the project was getting executive buy-in. SAP is a unique type of software that demands cross-functional cooperation, and Verizon Business leadership had to convince each division that they needed to standardize on it. “The top-down support was fantastic,” says Pelham. “Our executive leadership was 100 percent behind us.”
A driving force behind the nSAP implementation was Fran Shammo, who now serves as CFO of Verizon Communications. Pelham says Shammo reminded everyone that the business doesn’t stop moving, and communicated a need for constant urgency throughout the project.