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PTEXXXXX XX/14

ON THE OUTSIDE, LOOKING IN

ICTF

Lisbon May 2015

David Scott FCICM (Grad), CGCE

Verizon Enterprise Solutions

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An overview of the Verizon International Bill to Cash

team’s transformation to an out-sourced operation.

Insights into the rationale & planning for the move

The cornerstones of the transformation

The key areas of focus

How this translates to potential opportunities for you

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• The best, most reliable networks in the

industry

– The largest U.S. wireless company with

the largest 4G LTE network

– The largest and fastest all-fiber network

in the U.S.

– One of the largest, most reliable and

secure global networks

• 2014 revenues of $127.1 billion

• #16 on the Fortune 500 (2014)

• Approximately 176,320 employees

(Q1 2015)

ABOUT VERIZON

Using technology to address big challenges

Verizon Innovation Center in San Francisco, CA

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Verizon Global Network

LEGENDVerizon Private IP Available

Verizon Submarine Cable Investments

Major Submarine Cable Systems

Future Submarine Cable Systems

Terrestrial Network

Data Center

Cloud Data Center

Capital City

Connecting City

Satellite

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What was the Rationale for the

Outsource Transformation ?

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Our Finance Priorities

Integrate, Streamline

and Consolidate Processes

and Systems

Deliver Value to Our

Business Partners and

ProvideMeaningful Information

Drive Organization

Alignment and

Optimize Resources

Maintain Strong

Controls and

Fiduciary Oversight

Develop Finance Talent

Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosureor distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.

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Global system consolidation and alignment

SAP – nSAP, CM, BD

<5 Billing systems (1 strategic billing platform)

SAP – dSAP & iSAP

40+ billing systemsSystems

Retained team = consultative / specialist

Outsourced team = structured training

VZ Learn / Induction / Development plans / Mentoring / ICM Learning partnership

No formal training / development plans / induction

People & Development

Simplified Processes

Increased Automation

Detailed & controlled documentation

Core processes created, established & robust. Documentation comprehensive, same format, up to date & available to business

Ill-defined

Documentation missing / differing formats

Process & Documentation

Extended scope = International Bill to Cash

Outsourced Operations

Specialist retained team

Centralised

C&C in-house

Selected outsourcing

Support teams

Aligned with sales org

De-centralized,

MM outsource

Customer management not aligned to business strategy

Teams do all activities

Operation & Structure

CurrentRecent PastDistant PastArea/Time span

Chartered Institute of Credit Management (CICM) : Corporate Member

Learning Partnership (2009); QiCM (2010); ICM’11 Best Practice

International Credit & Trade Finance (ICTF) : Corporate Member

Our Team’s Evolution

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The key cornerstones to the

Transformation……

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• Transition plan

– Extensive timeline to document & train

– Phased introduction

• “Lift and Shift” principle

– Mirror the current processes

– Use current employees to train incoming staff

– Map & document processes

– Test understanding

• Benefits:

– Existing processes

– Defined roles & responsibilities

– Benchmark performance versus recent history

The Outsourcing Approach

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• Who is impacted by the change ?

• What is their perspective?

• How to address their concerns ?

• Active engagement positive endorsement

Stakeholder Engagement

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Effective Change Equation

Sound business solutions / strategies do not guarantee success.

Stakeholders committing to the solution is required for success.

S x C = R

S = Solution (Qualitative / Technical)

C = Stakeholder Commitment

R = Realized Business Results

S x C = R

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Knowledge Transfer

Donald Rumsfeld,

USA Secretary of Defense, 2002

• How many of your

processes are not

documented?

• Do you know all the tasks

your staff undertake?

• How much do you rely on

staff experience & initiative

to resolve issues ?

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Please estimate what %age of the processes are

detailed to operator level

for your area of responsibility ?

A. Less than 10%

B. 10 - 25%

C. 25 - 50 %

D. 50 - 75%

E. > 75%

Process DocumentationQwizdom

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• Pre-Outsource KPIs

– Limited number of specified annual targets

– Monitor Performance year-to-date

– Monthly dashboard with commentary

• Outsource Contract

– Multitude of activities to monitor & control

– Strategic / Technical / Operational

– Contractual penalties

– Historic benchmarking

– Robust statistics : “one version of the truth”

– Under-performance Root Cause Analysis

Performance Management

Analysis

Paralysis ?

What you

measure is what

you get….

…or…

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Performance Monitoring

Above Target Between Target And Minimum Below Minimum EMEA - IBM Hard Go Live APAC - IBM Hard Go Live All

Sample KPI dashboard :

Measures:

• Contractual (CPI)

• Key (KPI)

• General (GPI)

Benchmarks:

• Historical Actuals

• Minimum threshold

• Target SLA

Sample KPIs Format Min Target

BRA-01 Bill Run Generation Time cDays X Y n n n n n n n n n

n n n

BRA-03 Time to activate Bill ing bDays n n n n n n n n n

BRA-04 Order Process Time 10 cDays n n n n n n n n n

IR-01 Bill ing Inquiry Non Contained (P2) < 15 cDays n n n n n n n n n

IR-02 Bill ing Inquiry Contained (P1) < 5 cDays n n n n n n n n n

IR-03 Customer Services Response Time 1 bDays n n n n n n n n n

n n n

AR-01 Daily Cash Application 1 bDays n n n n n n n n n

AR-02 Refund Processing Time < 5 bDays n n n n n n n n n

AR-03 Unapplied Cash Clearing 30 cDays n n n n n n n n n

XF-01 Credit Check Processing Time 1 bDays n n n n n n n n n

XF-02 Aged Debt Greater Than 60 Days % n n n n n n n n n

XF-03 Suspension Processing Time 1 bDays n n n n n n n n n

MONTH 5 MONTH 6 MONTH 9MONTH 1 MONTH 2 MONTH 3 MONTH 4 MONTH 7 MONTH 8

BRA-02 Corrective Credits Adjustment Values (Quarterly) %

IR-04 Customer Satisfaction Survey – Transactional (Quarterly) Score

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Identify under-performance…

Target SL: Minimum SL:

Description:

Description: Description:

Description:

Description:

Description:

Action Owner Target Date To Correct Actual Completion Date Approved By & Date

Root Cause Analysis - Choose an item.

Immediate Action Taken To Resolve Issue (Including External Customer Communication If

Applicable):

Follow Up Action(s) Required To Prevent Reoccurrence:

Summary of Issue Description Including Dates & Times:

Work instructions followed? Choose an item. External Customer impacted? Choose an item.

Date Identified: Other – Please Advise:

Achieved SL:

Delivery Centre: RCA Reference:

Reported By: CPI/KPI/GPI & Number:

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Celebrate Success….!

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Outsource structure = Management opportunity

Delegate operational BAU

Costs are transparent

Processes simplified & documented

Robust performance monitoring in place

Focus on improving :

Key Areas of Focus

Strategic

direction

Streamline Processes

Best

Practice

TransformOperations

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Regional / Global

Elements

Consistent

Quality &

Documetation

Shared systems

and automation

Global

customer

consistency

Organisational

structure

Master data

management

Local System Local Tax &

Regulations

Global,

integrated

processes

Local

Statutory

Reporting

Local

Country

Elements

Ensure compliance to policies and

procedures

Robust governance and/or

management control

Consolidated views of reliable data

and information ‘Single version of the

truth’

Standardisation (and optimisation) of

processes to improve service levels

Retaining the flexibility to meet local

requirements and serve our customers

at the local level

Leading to:

Leverage scale and efficiencies

through consolidation

Reduce Costs and Increase Flexibility

Completing the Jigsaw

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? Building the stakeholder relationship

? Capturing all your team’s knowledge

? Validating the scope & consistency of your KPI measures

? Actively reviewing when things don’t go to plan

? Fine-tuning your processes

? Looking to the future

An Opportunity for You ?

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