Newly Merged Verizon And MCI Bridge Two IT Infrastructures

The merger of two IT environments--eliminating some systems, linking others--is always fraught with customer service risks. "These are big, complex systems, and it's hard to shift them, and you don't want to do anything to disrupt the customer experience," IDC's Winther says. Verizon Business has been quick to address issues of redundancy and harmonize product offers, sales channels, networks, and IT infrastructure, the analyst says. "Looks like they haven't had many missteps like lost customers."

Verizon Business integrated different areas of the business simultaneously, including IT, networking, sales, and product management. "That's the right strategy," says Winther, citing AT&T and SBC as other telcos that took the "fast transformation" approach with their merger. He notes, however, that a fast transformation can cause customer service failures and be expensive. Other telco mergers, such as BT's acquisition of Infonet, have involved much slower integration.

Verizon and MCI don't have significant product overlap and can bring a wide portfolio of options to customers on both ends. Winther contrasts this to the upcoming Lucent and Alcatel merger, where product overlap will "cost them a lot of money and several years before decommissioning a product line works out in their favor."

Practice, Practice

Almost from the start, Verizon Business launched end-to-end communications and IT services that combine the capabilities of the Verizon Enterprise Solutions Group and MCI. The resulting product set includes data and IP networking, managed services for local and wide area networks, voice applications like voice over IP and audio conferencing, hosted IT services, and customer premises equipment.

Cost reduction was one of the drivers behind Verizon Business' decision to bridge Verizon and MCI systems. "But the real end game is to provide the customers better services," Spitz says.

A new portal, Verizon Business Customer Center, gives customers control over the level of account and service management they want, including ordering service and making online payments. "It's a new way of delivering services," Winther says. Verizon Business also has created portals where customers can plug automated management apps directly into Verizon's systems to manage their network needs.

The telecom industry in general is better than most at managing mergers--ability comes with experience. Spitz served as a VP of network systems and advanced technology at Bell Atlantic and was part of the team that led the Bell Atlantic and GTE merger to form Verizon Communications. Says Winther: "When you have an executive familiar with operating a merger, you have a better chance of success."