How Verizon Wireless Stitched Together the Back Office for the Network that Blankets America

New Jersey isn't exactly the cherry capital of the world, but excluding those on Atlantic City's slot machines, the state does boast 26 varieties. Some are sweet, like the early-season Cavaliers or the late-season purple plums of Somerset. Some are tart, like the dark red Kristins or the Royaltons, which actually do better in New York but settled for New Jersey — much like the state's inhabitants. Some cherries are categorized by color: white, gold and pinkish white-gold.

It's safe to assume, however, that this pomological splendor is lost on Roger Gurnani — which is odd because for the last few years he has been one of the wireless industry's most notorious cherry-pickers.

Gurnani is vice president and chief information officer of Verizon Wireless. He and his team — including Tom Madsen, executive director of IT — are nearing the end of one of the largest back office and IT consolidation and integration projects in the history of, well, history. Until the pending merger of Cingular and AT&T Wireless concludes, Verizon Wireless holds the crown as the largest wireless provider in North America. But even when Cingular and AT&T collide, their system integration challenge will pale compared to the one Gurnani has just been through.

Verizon Wireless became the biggest by acquiring or accumulating the assets of Airtouch Communications, Bell Atlantic Mobile, GTE Wireless, PrimeCo PCS, Alltel Cellular, Ameritech Cellular, CommNet and Frontier Cellular. Each acquired property came with its own core competencies, collections of operations support systems and cadre of independent leaders. From the many, one Verizon Wireless has emerged — at last.

Gurnani chose to incorporate these competencies and best practices into the new Verizon Wireless, although he wouldn't specifically identify the strengths individual companies brought to the table. He was able to pick and choose those that best fit his vision. This cherry-picking strategy proved to be useful elsewhere as well, as Gurnani applied it to consolidating and building his integrated back office.

Gurnani said his team is 95% done with their consolidation efforts. “We have a couple of markets we expect to complete in the next couple of months, and then we will be all done,” Gurnani said. “After four years of consolidation, it's good to see it finally come to an end. It's been fun.”

But after a short conversation with Gurnani, it's hard to believe he means it. One would expect a mighty sigh of relief to blow in from the Northeast when this project is finished. But when asked if he's due for a long and well-deserved vacation, Gurnani appeared not to understand the question.

“It's been fun,” he repeated. “It's been fun to be part of a growth environment. It's fun to be where there is lots of innovation in technology and new products and new services.”

And so we believe him. Gurnani has been through many mergers and acquisitions — too many to count, he said — but concedes this was the biggest by far. However, before he will discuss his methodology or his philosophy for success in this project, he makes one thing perfectly clear.

“It is actually my team that deserves most of the credit,” Gurnani said. “I feel very guilty every time someone comes to take my picture simply because I head up the IT organization. It is my team that has helped me shape and mold our IT strategy and the strong IT portfolio we have.”

So just what has his team accomplished? In the last four years, they have completed the integration of 48 different markets into what Gurnani calls their directional target systems — internally developed systems and best practices geared toward achieving a single look and feel across all markets. They also have reduced the number of major systems from 150 to 28.

“We are down to our core portfolio, which is the number of systems we think we need to run a wireless business,” Gurnani said.

Verizon Wireless is not quite down to one billing system, and probably will never be, but Gurnani said the company is down to one set of customer-facing systems and a single bill format, and that's what matters.

“Our strategy when we became Verizon Wireless was to have one face to the customer and be consistent across the company with how we sell our products and services and service our customers,” he said.

There's also that cost thing. Streamlining the business and leveraging economies of scale was and remains important. Patrick Kelly, analyst and partner at analyst firm OSS Observer, said Verizon Wireless still has a way to go despite being the second most efficient North American wireless operator behind Nextel Communications in terms of operating income per subscriber. Kelly said Nextel also ranks first in having the lowest customer turnover and the highest monthly average revenue per unit. Not coincidentally, Kelly said, Nextel is the only mobile carrier among the top five that has consolidated all of its billing and customer care systems into a single platform.

Gurnani sees things differently. He admitted that his company's ARPU is lower than some of its competitors, but said those competitors have the advantage of concentrating in high-revenue niche markets.

More important, he said, is the cost per subscriber.

“We have the lowest across the major competitors,” he said. “So I don't agree that we are lagging behind.”

With proper credit given to his team, Gurnani admits his methods for success include challenging his people to take on big, complex tasks and to make sure they understand the impact on the business of their individual projects.

“Once the team sees the value they are creating, it has a tremendous motivational impact on them,” Gurnani said.

He pointed to a recent report by The Yankee Group that put Verizon on top of the overall business-to-business market as an example of seeing not only the value, but the results. “And it's not just that report,” he said. “Every report that comes out helps us tie results back to specific initiatives.”

With the integration project winding down, Verizon Wireless' IT department is focusing on the future. Not that all the changes the company made over the last few years didn't have the future in mind — they did — but with the deployment of its 3G network, the future has arrived. And that future is in data.

Supporting the growth of advanced data services requires a fundamental shift in one of the most fundamental areas of IT: billing and customer care. Everything a billing system has ever promised to do must become real and real-time.

“In the old telephony world, you collected your call detail records about who was calling who from the telephone switch,” Gurnani said. “In the data world, you may get transport information from the switch, but you have to gather other billing events from gateways, content servers, message platforms and more, and then correlate them and mediate them in order to produce a meaningful bill.”

In the new data world, the bill is the easy part. What's crucial is knowing how and when to deploy flexible pricing, having the ability to offer short-term, long-term and personalized services, and manage a myriad of third-party content providers and the revenue sharing that comes along with them. Other functions, such as identity management, authentication, security and device management, which once were distinct OSS entities, must now have real, real-time interaction with the billing system.

To put these capabilities in place, Gurnani called on Tom Madsen, executive director of IT. Madsen, a converted economist, began in Verizon Wireless' data division with Bell Atlantic Mobile about eight years ago. He's Gurnani's go-to guy for new initiatives, starting with self-service and customer relationship management capabilities for the company's call centers. Over the last few years, Madsen's team built a convergent rating engine and what he calls the service creation and management system (SCM).

The SCM provides all the functionality Verizon Wireless believes it will need to support advanced data services. It provides a place to catalog various services, content, applications and even partners.

Madsen made what he calls a combination build/buy decision when putting together the company's SCM because, “We wanted to make sure we can continue to evolve the technology internally to be able to meet our needs,” Madsen said. “We want to be able to provide a lot of differentiation and don't want to be locked into a ‘me too’ product.”

It's difficult to determine which pieces of the overall solution are built and which are bought. Openness may be blooming within the systems of the large operators but it still hasn't broken ground when it comes to revealing what they consider competitive secrets.

“We license software from most of the major suppliers, but that does not mean we are running our entire business on their platforms,” Gurnani said. “It means we have cherry-picked certain modules and incorporated them into our portfolio.”

Verizon Wireless doesn't reserve its cherry-picking for major vendors, although the modular approach they all have adopted makes it much easier. “We try to make sure we have the right to customize technology [we license],” Madsen said. “We try to evolve the products, especially from the smaller folks, so they can take it to market and we can get their technology at very economical rates.”

The rating engine has been deployed since 1991. It is indifferent to the content it crunches or the network it reads that content from. “Next-gen services no longer look like minutes of use. You are dealing with downloadable applications, gaming, pictures and messaging as well as different types of networks like 802.11 or GPRS. So you have to be agnostic,” Madsen said.

You also have to be flexible — or at least your billing system does. Gurnani said the goal of the IT department is to make all services easy to use. “Simplicity is the key,” he said.

In addition to the catalog in its SCM that lets the company package pricing models on a whim, the interface that lets customers self-provision their products and services and the rating engine that allows events-based billing for any type of business model, two elements of Verizon Wireless' SCM are key to making things simple — at least from the customer point of view. They are partnership management and device management.

Better, real-time partnership management is necessary to sort out the compensation for various players responsible for delivering a service that is no longer confined to a service provider's network. Services may start out on the provider's network but can veer off to the Internet or onto a corporate WAN or to a third-party content or applications provider.

To ultimately bill for those services, “You need OSS capabilities to administer and manage customer identity, authentication and security for those services across the various entities,” Gurnani said. His team, mainly Madsen's group, built those capabilities into the SCM using a patchwork of licensed and self-developed solutions.

The device management piece is critical for simplifying customer care, order entry and provisioning. “With all the advancement in data devices, it is increasingly important to keep track for each customer what capabilities, functionality and attributes such as operating system, software version, memory and features each device has,” Gurnani said.

Having that information for each end user helps the customer service representative better understand the customer's experience. Madsen, whose group designed the current customer care strategy, said third-party providers and complex devices have changed the dynamic of customer care.

“CSRs need to understand that a customer has a certain type of device and what types of services that device can handle. They never had to worry about that before, so we had to build this type of reference data into our systems,” Madsen said.

Madsen's team also had to include reference data from each third-party provider and each application or service they provide in order to keep the co-optive process transparent to the customer.

The patchwork of solutions that provides these capabilities comes from various vendors, large and small. “We even found a start-up company that had some concepts in the works, and we became their first customer. Then we pretty much customized it and integrated it into our environment,” Gurnani said.

The rest? Cherry-picked. “We do a lot of systems development ourselves. Periodically, we will scan what's available in the marketplace and we will cherry-pick certain modules, license them and incorporate them into our systems portfolio,” Gurnani said.

One of the providers from which Gurnani cherry-picked solutions said that company believes (understandably) that using best-of-breed and unique applications along with self-development (rather than a suite of single vendor solutions) can lead to the problems large providers found themselves in when competition first commenced, which was struggling to be flexible and fleet of foot. “Sometimes you can build yourself into a corner that is very difficult to build yourself out of,” said the vendor representative.

After 21 years developing IT systems for local, long-distance and wireless businesses and after four years of consolidation and integration that has gone largely unnoticed by its customers, Gurnani seems fairly confident he could build his way into or out of anything.

“It's not just IT work,” he said. “It's about redefining your business processes and retraining and re-tooling your customer-facing employees. It's about culture. And we are very proud of our culture. It is a very results-oriented, performance-driven culture.”

And for the cherry-picked employees who survived, how fun is that?