When BT set up its new Digital unit two-and-a-half years ago, the tech estate for financials was in need of a complete modernization. Existing finance systems required a huge amount of manual labor and effort, and there was a lot of legacy in the estate. As Jay Doshi, MD, Corporate Units, Digital at BT Group, quips:
Some of it was there before I was born. Some of the stuff gets done by mainframe. The financial estate was absolutely in need of modernization because there were systems that were end of service life.
The legacy estate also meant that BT’s financial processes were tailored for what the systems could support, rather than taking advantage of advanced tech and streamlined workflows. Doshi adds:
Clearly there was a need for modernization of the process, of the information model and the way the systems get delivered on an ongoing basis.”
Those were the drivers for a major technology project, for which BT Group turned to SAP.
BT Group first began implementing SAP technology in 2019, as part of a multi-year digital transformation journey. Most recently, the telecoms business has focused on retiring 11 legacy finance platforms, switching to SAP S/4HANA to remove complexity, increase productivity and reduce costs.
The project began with defining a new information model, standardizing management reporting, moving planning and consolidation onto SAP, and developing a new general ledger for the company. Doshi explains:
We did not start with the transactions. From 2019, when we started bringing up the SAP system, we were first doing the information model and the design, then bringing in the data into Central Finance, but the transactions were happening still in the legacy system.
That concluded the first phase of the program in Spring 2022. By Autumn 2022, BT Group brought its core UK businesses onto SAP, including supply, buy and pay, invoice to cash, projects and asset, and core finance, bringing a fully integrated subledger into one place, which went live in April 2023.
BT Group’s original 11 legacy finance platforms, including subledgers, procurement and sourcing, have now been retired and are all consolidated on Ariba from a buying and sourcing perspective, and into the Central Finance and sub-ledger on S/4 in terms of the SAP ecosystem. SAP Concur had already replaced the various different clunky expense management systems, including the addition of a mobile interface for employees to enter and manage their expenses.
Doshi is keen to note that while three years for the project might sound a long time, any migration involving changing a data model and moving multiple different businesses onto a single information model would be extremely complex:
It's lots and lots of hard work. We had something like 16,000 integration test cases, we had 105 interfaces, as in systems that donate data to SAP or systems that get the data from the SAP system. It's genuinely an open-heart surgery of our financial estate. It's a herculean effort and a coordination and a collaboration that makes it happen. It was a great partnership with Accenture, Deloitte and other partners along with the partnership between business and the digital teams.
Creating a badgeless organization was core to this collaboration, whereby everybody involved was working for the customer paying for the services BT provides, rather than their own specific division. Doshi adds:
You can't implement an ERP by saying, 'I'm Deloitte, I'm Accenture'. I’m a business guy, I'm from the CFO's team, I'm from a digital team.
The integration BT Group had with SAP Labs in India was also useful, as the 14,000 people working on SAP in India are a stone’s throw away from BT’s offices there.
When it came to selecting a technology partner for the ERP modernization project, BT Group selected SAP based on its shift from on-premise to the cloud, along with the power of the HANA database and SAP’s Business Technology Platform [BTP]. Doshi says:
Only once in the lifetime of a CFO do they actually swap out a system. It's a bit like swapping out your heart. It went to the BT Board in 2018 to make that decision. Clearly, cloud was the natural choice because if you are building a new system bottom up, you would build it the right way on the cloud from day one, rather than building it on premise.
While Doshi’s digital team were integral to the project, its success also relied on a partnership with BT’s business team. Doshi explains:
If you were to see this implementation as the definition of a process and implementation of a process, very crudely, because every ERP is define the process and implement a process on the system - the definition of the process was done by the business team, and the implementation of the process was done by the digital team.
With the new finance platform in place, the business has seen four key benefits: user-friendly systems, so staff know exactly how to get things done; the visibility gives them a greater efficiency; reduction in errors and improved data quality; and better insights thanks to the integrated solutions. Doshi adds:
That gives you greater efficiency and control of every process that we changed, be it the record to report or the invoice to cash process.
BT Group has also seen substantial cost-savings from the SAP tech. This is down to removing the risk and associated cost of managing an end of service life product; reducing the additional effort required to produce management reporting; and improved productivity. Doshi says:
A purchase order is not waiting for somebody to approve it because people can see it now, and they can easily approve the purchase order. Thereby the workflow just works much faster through this whole process, and there’s a reduction in the fallout that happens in the manual processing, because now the processes are streamlined as well.
It’s better productivity, better colleague experience, a better financial operating model coupled with manual effort reduction, and also the end of service risk management, lower failure because the hardware is new, and the software is the latest and patched.