1 CONFIDENTIAL 2012/13 BTW Business Plan 4. 2 Business Strategy 2012/13Anna Matty Resourcing PlanAngela Donnelly Performance and AbsenceChris Amos Agenda.

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CONFIDENTIAL

2012/13 BTW Business Plan

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• Business Strategy 2012/13 Anna Matty• Resourcing Plan Angela Donnelly• Performance and Absence Chris Amos

Agenda

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Business Strategy

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At >20% of Group profits, BTW’s financial performance continues to have a very material influence on the value of the Company

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Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13 H2 12/13

The plan set out at the beginning of H2 was straightforward….it just needed to be executed on

Fixing the basics and the cost base Fixing the basics and the cost base

Increased strategic clarity and investment in key growth areas Increased strategic clarity and investment in key growth areas

Bolder Diversification Bolder Diversification

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Fix the basics

Cost transformation

Contract execution

Pipeline growth

Product range plans

Forecasting

Oct 2011 – Jun 2012

Fix the basics

Cost transformation

Contract execution

Pipeline growth

Product range plans

Forecasting

Oct 2011 – Jun 2012

• Customer service - making service a source of value and differentiation

• People - investing for growth and quality, while reducing cost

• Customer service - making service a source of value and differentiation

• People - investing for growth and quality, while reducing cost

Increase strategic focus

Mobile sector

Indirect channel

IP services

IT services

IDD

Oct 2011 – Oct 2012

Increase strategic focus

Mobile sector

Indirect channel

IP services

IT services

IDD

Oct 2011 – Oct 2012

Add scope and scale

Customers served

Channels used

Role in value chain

Geographic coverage

Acquisitions

2012/13

Add scope and scale

Customers served

Channels used

Role in value chain

Geographic coverage

Acquisitions

2012/13

2211 33

Enabling strategies

Accelerated execution on the key strategic interventions is key to BT Wholesale’s performance this year

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We are moving on the main platforms for future growth

Stop Non Core and sub-scale activities; re-invest talent and cash Stop Non Core and sub-scale activities; re-invest talent and cash

Radically improve BT Wholesale Service Delivery Model and QualityRadically improve BT Wholesale Service Delivery Model and Quality

Crack BT Wholesale strategic relevance to the Mobile Sector; plan for growthCrack BT Wholesale strategic relevance to the Mobile Sector; plan for growth

Redefine and scale the Indirect Distribution Business Unit in BT WholesaleRedefine and scale the Indirect Distribution Business Unit in BT Wholesale

Rapid scale growth in IP Voice, IPX and IDD. Reposition BT WholesaleRapid scale growth in IP Voice, IPX and IDD. Reposition BT Wholesale

Establish IT Services and Managed & Professional Services portfolio & strategy Establish IT Services and Managed & Professional Services portfolio & strategy

Land a couple of Boat-rockersLand a couple of Boat-rockers

Strategy Driven Success Strategy Driven Success

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BTW Customer Service – Today’s model

8.4mBroadband

Lines

8.4mBroadband

Lines

BTW CS Facts 2,213 Agents

3.4mWholesale

Calls Lines

3.4mWholesale

Calls Lines

280k DataCircuits

280k DataCircuits

15k BBContactsper week

15k BBContactsper week

10 UK sites

+3 Offshore sites

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Customer Service Strategy

What’s 90/90/10 all about?:

Challenging our current thinking in three key areas:

•Enabling our customers to self serve•Moving from reactive to proactive•Ensuring the best quality service where intervention is required

What’s 90/90/10 all about?:

Challenging our current thinking in three key areas:

•Enabling our customers to self serve•Moving from reactive to proactive•Ensuring the best quality service where intervention is required

Who are our customers? - A simple two segment view…

9090

9090

1010

Maximising self-serve

Maximising pro-activeness

Ensuring quality

SELL TO(enabler of CP’s own services)SELL TO(enabler of CP’s own services)

SELL THROUGH(CP sells BTW products on)SELL THROUGH(CP sells BTW products on)

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QCA ,multiple checks , gates , and levelling documents. Quality score no longer a component of the DICE score

One generic review document , focused on OCR , manager control, success criteria reduced to 2 QOS gates and 2 RFT gates

Going out: Quality Checks

Coming in: Quality case reviews

And we have made changes in the way we work to get it right for the customer, first time

One Contact Resolution

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% %%

How far down the 90/90/10 road are we?

Voice

20%20%

60%60%

Data

75%75%Broadband

Q1 Q2 Q3 Q4

90%

90%

90%

Today

% %%

L2C & T2R

% %%

Not measured

Not measured

Not measured

100% Natural

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Common service model

Delivery by product category

Delivery by product category

Customer segment driven service

Customer segment driven service

Manage reported events

Manage reported events Predict to preventPredict to prevent

Metrics focused on the process

Metrics focused on the process

Measure customer outcomes

Measure customer outcomes

High volume, high people intensity

High volume, high people intensity

Automate, self serve, shift left/right

Automate, self serve, shift left/right

One size fits allOne size fits all Standard model with tailor-made options

Standard model with tailor-made options

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…we’ve started making changes already, albeit small

Wholesale CMC

Broadband HLE owned by onshore

Pan-product HLEs(April)

CSPG Helpdesk set-up

Scaled (May-June)

Managed order desk

-Ethernet(April)

Segmented Service Model 12/13 – 13/14

Service Edge ‘MyCMC’

Incubator ISPCo(May)

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Example based on Harlequin deal

ISPco – status quo with mix of

UK Newgrid, Capita and

IBM

ISPco – all delivered by third party resource

ISPco – all UK on Newgrid

T&Cs

We can not easily compete on cost, but we can on the quality of service that we offer the customer

margin

Negative

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Resource Plan

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11/12 Full Year TLR was 1485 FTE (1264 FTE Direct Labour and 221 FTE Offshore)

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The CS Cost Transformation Strategy

Total

Pro-active Self Serve Quality Interventions

Inbound Fault Volume reduction

What this is about…

Problems are fixed before I notice them.

Using tools I have at my disposal to reduce

manual contacts I have with BT

If I do have to call in it’s dealt with quickly

through slicker processes

Improving network stability reducing faults

I send to BT

Strategic Intent…

90% of faults are dealt with pro-actively

90% Self-Serve10% of what we do should be quality

interventions

Supported by

• CIDT• Brandenburg

• WBC Order Tracker• eService Portals

• One Contact Resolution

• Fibre T2R Punch through

• Network Fault rate improvements

• BAU vol changes

BenefitAllocation

17% 18% 50% 15% £10.7m

All initiatives aligned to Strategic Drivers - ServicEdge - Transaction Reduction

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We are forecasting further reductions in 12/13 whilst continuing to invest in skills for the future

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Redeployment is key to delivering the 12/13 plan, but it will be very challenging

2011/12

Redeployment P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 Total

Opening Balance 6 17 18 13 26 22 17 17 14 8 3 3

Added during period 13 3 23 21 4 107 48 2 6 3 0 0 230

Resolved during period (2) (2) (28) (8) (8) (112) (48) (5) (12) (8) 0 (1) (234)

Closing balance 17 18 13 26 22 17 17 14 8 3 3 2

2012/13

Redeployment P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 Total

Opening Balance 2 110 108 54 17 15 12 4 4 0 0 0

Added during period 131 2 2 29 7 1 0 0 0 0 0 0 172

Resolved during period (23) (4) (56) (66) (9) (4) (8) 0 (4) 0 0 0 (174)

Closing balance 110 108 54 17 15 12 4 4 0 0 0 0

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Our primary focus will be to reskill and redeploy people to areas of growth. We will use of offshore teams for declining and lower value work were we can

Business Unit Growing Skills Declining Skills

CS Service level managementService level experienceService Strategy & Transformation managementRoute Cause Analysis & Problem ManagementCapacity Management

Fault management - basicSystems support to customers

ISPCo Converged broadband / home phone servicesAbility to use WLMS2 OSS2 Tier Operating model

Single skilled agents

Markets Sales HunterSales OperationsClient ManagementCampaign Management

IDDM&BSales (Non Hunter)

MNS CDD UpliftContract delivery leadershipAdvanced stakeholder managementProgramme governanceDue diligenceManaged services capability developmentProfessional services investmentProject management and executionContract life business planning - Group governance

Business development / deal leadershipLevel 1&2 bid governanceLow level project managementLow level contract management

Products Commercial propositionsMobile / small cellsIT services (new requirement)

PPPAgileIDD

Strategy & Comms Mobile sector Digital media