|
|
 |
Case Studies
Outsourced Customer Care & Billing Platform to Achieves $1 Billion in Synergies
Problem
Shareholders had been assured that the merger of two Fortune 200 telecommunications carriers would generate over $500 million of synergies within the IT organization alone. A significant portion of these savings were anticipated to be delivered though rationalizing the legacy customer care and billing platforms and outsourcing the platform's operational services to the selected vendor. The newly-combined carrier asked Pace Harmon to determine how to best consolidate these systems and capture the savings while protecting against a negative customer experience.
Approach
Pace Harmon was engaged to complete a comprehensive analysis of both legacy platforms, develop a recommendation as to which platform best accommodated the combined entity's unique business needs, and execute the outsourcing transaction. With each day costing significant sums of money in lost synergies, Pace Harmon proceeded as follows:
- Rationalization began with a comprehensive diagnostic of the customer care and billing platforms at both legacy companies. Pace Harmon conducted detailed interviews to understand the universe of requirements, business considerations, and issues. Based on the data gathered and an analysis of existing contracts Pace Harmon developed a robust financial model to reveal the financial impacts of selecting either vendor
- Pace Harmon conducted an extensive Request for Offer (RFO) process, focused on obtaining the requisite information to make an informed decision. The activity included the coordination of stakeholder participation, document drafting, and response scoring. Through this process, over 70 business and IT experts reviewed vendor responses to more than 500 questions, with oral presentations attended by 50 company personnel
- In parallel with the RFO evaluations, Pace Harmon coordinated an independent 3rd party analysis of the vendors, concentrating primarily on the financial viability, performance references, and historical system performance and stability
- With the orals and response scoring complete, Pace Harmon assembled the business case and financial analysis, including an exhaustive comparison of quantitative results (NPV, ROI, EBITDA, TCO). The financial analysis revealed that one of the two candidates, though not the lower cost solution, provided the greatest value because of its tightly integrated, proven architecture, lower risk of delays in development and deployment, and the better alignment of its feature/functionality set to the needs of the business. Pace Harmon recommended the adoption of that leading platform
- Pace Harmon provided executive leadership with thorough advice on best practices for the agreement structure, SLAs, contract terms & conditions, and PMO implementation, such that adoption of the new platform could occur seamlessly. Pace Harmon also served as an active voice at the negotiation table, ensuring that the contract became the manifestation of a long-term, mutually beneficial relationship
Outcome
Pace Harmon recommended an outsourced solution that was forecasted to deliver over $1 billion (i.e., more than twice the IT synergy target) over the 8 year term of the relationship while minimizing risk and simplifying the transition. Pace Harmon's recommendation received broad organizational buy-in from both pre-merger entities due to the program's effective change management and communications planning, and the comprehensive participation of the impacted organization and executive leadership. Particularly importantly, given the size of the decision and the potential sensitivities associated with the decision, both vendors agreed that the process was thorough and fair, as did an extensive review conducted by the internal audit function.
|
|
| Outsourced Customer Care and Billing Platform to Achieve $1 Billion in Synergies: |
|
