A Complex History

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Online update: Can the telecom giant unsnarl its byzantine billing system to soothe customers and the SEC?

A Complex History

Why so thick? The original WorldCom, known as Long Distance Discount Services, was founded as a long-distance call-reselling company in 1983. In 1992, LDDS contracted its billing systems out to global technology services company Electronic Data Systems. During the 1990s, WorldCom acquired more than 60 companies, expanding its local and long-distance services but rapidly increasing the complexity of its billing systems. WorldCom, for the most part, focused on landing business accounts of under $20,000 a month.

Meantime, MCI had set its sites on multi-million dollar Fortune 500 network deals that required hundreds or thousands of data and voice lines and a more complex billing system, which the company built itself.

After the merger, WorldCom split its business into two main systems—which insiders call "legacy MCI"—for big corporate accounts, and "legacy WorldCom," for small- to medium-sized business customers. EDS was charged with moving MCI's smaller business customers to the WorldCom legacy system, which EDS manages.

The move was necessary because WorldCom's system was only designed to handle the accounts of smaller business customers, not complex corporate accounts, says Frank Dzubeck, president of Communications Network Architects, in Washington, D.C. The entire process took about two years, says Dan Zadorozny, an EDS client executive who worked on the project. He says EDS fixed many outstanding billing problems MCI clients had—such as ensuring that the correct price was charged for the correct service—even before the migration to the WorldCom system.

Nonetheless, the two systems have never been integrated. So customers may receive separate bills for existing data and voice services from each of the main systems. In addition, they may get separate bills from any of nine additional minor legacy billing systems left over from earlier business acquisitions. All told, WorldCom can't yet promise a single, unified bill to customers.

"We do our best to give them a consolidated view if they have bills on the old account," says Michael Marcellin, WorldCom's director of eCRM product marketing.

Dzubeck says WorldCom's best isn't enough. He says the company needs to invest in one billing system."They need to bite the bullet," he says. And soon.

This article was originally published on 2002-03-14
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