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Multinational Telecommunications Enterprise

Keywords:  SAP RE-FX / IFRS16 calculations / Master Data Configuration / Finance leases / Accounting

Headquarters: Germany

Leasing contracts: +40k

A multinational Telecommunications Enterprise has been using SAP RE-FX to manage the lease agreements from its large and complex global network. Its diverse portfolio of leases included cabling, antenna locations, and common fixed assets such as cars and buildings.

The Enterprise has used SAP RE-FX to its maximum potential managing not only the IFRS16 accounting requirements but also local and tax requirements as well as the end-to-end lease contract management, including lessor management and payments.

Given the extremely complex environment and the large number of stakeholders involved, Qiado has been supporting this Telecommunications Company in the optimization of SAP RE-FX and all the lease-related processes, providing support to the Global and Local Technology teams, to the Accounting teams as well as to the Operations and Contract Management teams.


1. The network


The greatest asset in any Telecommunications Company is its network and all the reliability that can be provided to its customers. Thus, it comes as no surprise that to provide excellent service these Enterprises need to invest heavily in having a wider range of locations in which they can install Antennas and Cabling, such as Fibber Optics, as well as other critical hardware.

To ensure a reliable distribution Telecommunications Firms need to strategically choose the locations in which their hardware is installed. In most cases, the strategic buildings and/or land plots are already occupied, which in turn implies that these companies need to establish tens of thousands to hundreds of thousands of lease agreements in other to use those essential locations.

Understandably most locations are also owned by different landlords who can either be owners of several sites of different dimensions or can simply have a small piece of land.

Therefore, only a robust multi-purpose tool can support a large Telecommunications Company to manage so much diversity and complexity and SAP RE-FX is that tool.



2. Managing complexity


SAP RE-FX was built as a lease-management solution flexible enough to manage all the intricate lease details, allowing for extreme granularity and for the configuration of almost any contract requirements.

These extensive capabilities also come at a cost, by allowing users to ultimately perform any required contract management tasks SAP RE-FX gets confronted against the precise and inflexible IFRS16 and other Accounting Standards rules.

This very sensitive dance between flexibility and rigor implies that when customization or contract granularity is extreme so maybe the effort to keep the Accounting process running smoothly and without major drawbacks.

It is in this complex and sensitive environment that Qiado feels mostly at home, as the years of acquired knowledge in lease management and Accounting give it both the depth and the length of understanding required to establish the processes and to coordinate the multiple actions required to manage this large infrastructure.


3. Early challenges and multi-disciplinary roles


Qiado has started its cooperation with this large Organization as a small team service provider intended to support the already established team of consultants responsible to manage the implementation of SAP RE-FX and the post-implementation management tasks.

During this early stage, Qiado has identified many challenges that the Company was facing as well as sub-optimal processes and system configuration that were hindering the capacity of the Enterprise to use SAP RE-FX to its full potential, as well as were creating serious challenges to its ability to perform the necessary Accounting functions with proper accuracy and timeliness.

Qiado has started this intervention by determining the processes that needed the most degree of attention as well as cooperating with the local and international Technology teams to establish corrective procedures pointed at eliminating the many errors identified in a large portion of the lease contracts.

Qiado has presented all the necessary details requirements as well as worked together with Technology to create the queries and SAP transactions, and OSS Notes requests that allowed to fix more than 80% of the problems identified in the beginning.

Given its extremely valuable contribution to the success of the usage of the tool, Qiado has then presented several proposals on how to move forward, not only to eliminate all the technical debt of the original implementation but also to leverage the capabilities of the tool to support the functioning of the network.

Qiado has therefore seen a growth in its scope of intervention and influence, which lead to the consequent growth of the team as well as the number of Departments supported. Qiado was not only helping in having proper IFRS16 Accounting, but also in the correct management of contract information, of the prompt adoption of new regulation, in the adoption of new technologies such as the requirements for SAP S4/Hana, and in business decisions such as cross-company network agreements.


4. The road ahead


Qiado has changed this Telecommunications focus from post-implementation intervention to leverage and business growth. As stated, the network is the key asset in any Telecommunications business, therefore it is of utmost importance that this asset is managed, monitored, and leveraged to its full potential.

Qiado, therefore, worked with this large Enterprise to determine the future of the lease-management activities for 2021 and beyond.

Currently, Qiado is supporting the corrective actions required to fix the remaining portion of portfolio errors, as well as to ensure a smooth end-of-month accounting. Qiado has built with this Client a path for the future with the necessary foundations for the optimization of its business.


From maintenance to monitoring, from monitoring to growth:


As a final remark, Qiado’s work has allowed this large Telecommunications Company to manage the limitations of having an extremely diverse and specific set of lease agreements, through the establishment of robust SAP RE-FX processes, as well the configuration of SAP transactions targeted to the limitations identified.

Qiado has then established, based on the extensive acquired experience, a plan that will allow creating a strong monitoring environment using SAP-integrated Process Mining tools that will identify promptly and in advance all the potential portfolio and contract inconsistencies before they create problems for Accounting.

Based on this strong control environment Qiado is working with the Client in the definition of the proper requirements for Business growth both through the support for the implementation of new technologies such as SAP S/4 Hana, as well as through the expert advisory regarding lease-accounting and lease-management matters. With this end-to-end support, this Telecommunications firm can focus on doing what it does best, leveraging the network.

Major company in Telecoms, Managed services

Keywords:  IFRS16, ASC840 & IAS17 transition / IFRS16 calculations / Master Data Configuration / Finance leases

Headquarters: United Kingdom

# Leasing contracts: +4000

This client is a large multinational technology company with headquarters in London, UK, that provides network services to capital markets, media, and fixed/mobile operators. They operate in more than 22 countries, making the lease accounting environment international and complex.


The main challenge was the high volume and material number of contracts related to vast data centers.


During the initial phase of the project, Qiado supported assessing the IFRS16 transition scenarios, which required a significant effort from our technical accounting team. We supported this customer during the implementation phase, and currently, we are responsible for the maintenance of the application. One of our main responsibilities was integrating with the ERP system, with new General Ledger and new Asset accounting modules, since these require more than a standard implementation. Concurrently, we were also involved in the configuration of several accounting standards such as IFRS16, ASC840, and IAS17.


The main outcomes were Master Data Configuration, System and UAT testing, IFRS16 calculations, ERP integration, reconciliation, and reporting. Moreover, recently we also supported the integration of the old Finance Lease into the application according to IAS17.


In the end, Qiado helped the migration of more than 2000 contracts with a very significant asset value. There are several specific requirements due to IFRS16&IAS17 integration and new SAP modules, and, in this case, we were still able to support the customer, guaranteeing very accurate results.

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