BT’s Cost Transformation

StoryGeorge Miller

Client Industry Executive14 September, 2010

Welcome

Are you ready……to save up to 30%?

Delivering the public spending

cuts facing the new Government

will not be easy. But those

who argue it will be impossible

without slashing services should

take a look at BT.

David Wighton

Business and City Editor

The Times

May 2010

“ “

1) We’re coming out of the recession but recovery is fragile

2) Are we in danger of a double-dip?

3) Finance is no longer easily available

4) Increasing cost pressures and budget restrictions

5) Continuing pressure on productivity

To survive now and thrive in the future we

must all focus relentlessly on costs

The economic environment remains challenging

Meeting the cost challenge

• It is not enough any more just to ‘squeeze the sponge’

– you have to do things differently

• We have been through it

Cut operating expenditure by £1.8 billion

Reduced capital expenditure by £800 million

Improved our bottom line by £250 million

Increased our cash flow by £1.2 billion

All while facing an economic recession,

and without compromising customer service

In the last 18 months ,we have:

Delivering the public

spending cuts facing the

new Government will not

be easy. But those who

argue it will be impossible

without slashing services

should take a look at BT.

David Wighton

Business and City Editor

The Times

May 2010

“ “

Cutting costs while improving services – BT

5. Industrialise

processesAutomate processes as

far as possible, including

across organisational

boundaries. Enable

customer self-service,

and minimise the

manual handling

of information

1. Impose

disciplineConstrain travel and

discretionary spend.

Halt purchasing,

centralise decision

making, introduce new

business rules and

freeze recruitment

2. Rationalise

supply chainConsolidate with fewer

suppliers and

renegotiate contracts.

Centralise vendor

management and

require the use of

preferred suppliers.

Stop and review all

CAPEX plans

3. Drive tactical

efficiency and

engage

everyoneUse local headcount

reduction targets to

drive local prioritisation

and efficiency.

Demonstrate leadership

through ‘town hall’

meetings. Speak regularly

to all staff and involve

them. Use technology for

mobile & flexible working

& rationalise property

portfolio

4. Redesign

the operating

modelWipe the slate clean.

Rethink how the

organisation needs to

work. Simplify

processes, create

shared service factories

and focus on getting

services right first time.

Design

the organisation

structure last

Lessons learnt

Renegotiate

contracts Share challenges with suppliers

Utilise your

best peopleEvangelists to drive change

Cost

cutting Short term cost cutting is not enough

FocusFocus on how services are delivered –

radically change the model

Technology Automation

Things must be done differentlyScaled down

budget

Organisations don’t change, people do

• 70:20:10

• Human behaviour: processes: systems

• Consult and collaborate with your people, share the challenge and need for change

• Build up trust, leverage their expertise and creativity to develop the improved

processes and operating model

• Successful transformation is about behaviour much more than about

processes or systems

Examples of cutting costs and improving productivity

25% office space

reduction for

Beachcroft LLP

£39 per user per month

saving for E.ON

SPD saves 30% with

cloud-based CC7 day process – 20 minutes

at TD Waterhouse

92% calls handled by interactive

voice response system at Guy’s and

Thomas’ NHS Foundation Trust

20% reduction in

business travel for HOK

Cost transformation

– Savings of £19.3m in Rotherham

Where we’re going next

3 year

change

processDon’t revert to

old behaviours

Maintain the

commitment

of talent

Focus on customer,

efficiency and

automation

3 challenges

Making Contact

Centres Efficient Kate Ross

Head of CRM Marketing

Customers are changing

1 0 1 2 3 4 52

…and it’s hard for your business too

More flexible

workforce

Improve customer

service

Reduce

capital outlay

Improve agent

retention

Increase revenue

generation

Global

consolidation

Access to wider

labour market

Improved reportingWorkforce

optimisation

Improve operational

efficiency

Protect from

service breakdown

Ensure future

proofing

Reduce

unexpected costs

Increase agility

and flexibility

Ensure business

continuity

Contact management is at a tipping point

CM Insight , The Truth About Contact Centre Transformation, CM Insight/Aston Business School White Paper.CM Insight , The Truth About Contact Centre Transformation, CM Insight/Aston Business School White Paper.

Service Efficiency

Customer wants

Personalised, timely,

multi-channel access

Business wants

Efficiency and

profitability

Service Efficiency

Customer wants

Personalised, timely,

multi-channel access

Business wants

Efficiency and

profitability

88 per cent of customers

are likely/very likely to go

elsewhere on the basis of a

poor customer experience

Loudhouse Research/RightNow

Technologies, 2009

“

”

80 per cent of

businesses think they deliver

a superior experience, yet

only eight percent of

customers agree

Frost & Sullivan

“

”

Your journey to contact centre efficiency

1Return on Behaviour magazine2Forrester3The McKinsey Quarterly

4BT Retail study5Frost & Sullivan

BT Inbound Services – benefits

Customers

A single 03XX number cured public confusion

caused by over 20 non-emergency numbers for a UK

police force. It alleviated significant misuse of 999,

made the service more efficient and increased

public access

HP have been able to reduce costs, increase

retention rates and serve new markets thanks to

BT’s intelligent network-based routing that

makes sure calls are directed to the right agents

– wherever they are

BT Global Inbound Call Services enabled a saving

of over $40 million and increased customer

satisfaction for a US-based technology company

with network-based interactive voice recognition

delivering calls right first time

BT Self Service – benefits

Customers

“The branch transformation programme is a crucial

element of our overall business strategy. We need to

make our branches much more effective sales vehicles,

while simultaneously improving customer service

across all channels”

Giles Chipperfield, CIO, Coventry Building Society

“We did not want to compromise on the customer

experience under any circumstances, because that

would inevitably have backfired. With BT we had a cost

effective quality product in a very short lead time”

Darren Hepworth, VP, Customer Contact Centre, TD Waterhouse

“…this [automated speech] system means there’s genuine

benefit for everyone; for travellers who get the information

they need quickly; for the train operating companies, who

can offer their customers more communication choices;

and for the advisors in our call centres, who can focus on

more rewarding tasks”

Chris Scoggins, CEO, National Rail Enquiries

BT Multi-Channel Access – benefits

Customers P&O Ferries estimates annual savings of £240,000

through the convergent capabilities of a BT multi

channel contact centre solution, providing return on

investment within 18 months

Cork County Council now has a full multimedia contact

centre capability, enabling customer advisors to deal

with a blend of voice, email, fax, web and even SMS

enquiries. Productivity has increased with up to 89 per

cent of calls successfully dealt with first time,

significantly improving customer service

The Student Awards Agency for Scotland now offers its

clients a variety of communication channels through a

BT multi-channel solution. Processing applications are

now turned around in 11 days, down from 28. Call

handling targets are being met despite a 24 per cent

increase in calls

BT Networked Expertise – benefits

Customers

The mean quality score of a customer interaction

improved from 64 to 80 per cent in the four months

following implementation. The average score has since

risen to 85 per cent, with an ever-increasing number of

calls scoring a perfect 100 per cent quality rating

Coca Cola

“The BT solution represents an exciting use of new

technology – utilising a shared network in a challenging

clinical environment – for possibly the largest

organisation of its type in the world. Our expectation is

for a significant improvement in efficiency, enabling

enhanced customer service at reduced cost per contact”

Murray Bain, Director of ICT, NHS Direct

“The complexity of enquiries now is amazing –

especially now, in a time of financial uncertainty. With

complexity comes longer calls and higher expertise”

CIO UK Retail Bank

BT Hosted Contact Centre Solutions – benefits

Customers

“We had looked at a range of vendors, but BT is a strategic

supplier. When it comes to internet security we felt most

confident in the offer made by BT. Their fully managed

proposal would support a wide range of client devices”

Wilson Ferguson, Head of Online Channels,

Direct Banking NAG Europe

Expedia is in the fast changing, highly innovative e-travel

market. They started 2 years ago with a 10 contact centre

seat pilot and converted in 2009 to 1000 seats across 6

sites all on to BT’s hosted platform

“As well as improved responsiveness, moving to the

NGCC platform has saved us 30 per cent on our annual

bills compared to the previous solution”

Rebecca Tan, Customer Care Manager, SPD

Professional ServicesOwain Dobson

Head of CRM practice

BT Professional Services – bridging the gap

We use proven

methodologies to bridge

the gap between your

operations and your

infrastructure

Strategic

Business

Goals

Quick Start

• Fixed price, fixed term consultancy package

• 2-3 weeks flexible consultancy

• Validated business case output and reporting

• Provides informed decision making that de-risks your deployment strategy

• Ensures the best route and quickest ROI

Standard Quick Start

Analysis

Model

Interpret

Design

Baseline

• We employ over 13,400 agents

• We handle 135 million calls per year

• We handle over 46 million online transactions every year

• We handle 40 million self service transactions per year

• We manage over 8 billion minutes on our Global Inbound Network

• We handle 1 million emails and chats per year

• We serve over 22.6 million lines

Our credentials

• We’ve established 4,000 contact centres globally to over 1,000 customers

• We provide solutions to:

– Over 75 per cent of the world’s largest banks

– 11 out of 20 of the largest airlines

– 13 of the top 20 pharmaceutical companies

– 8 out of 10 of the world’s largest utility companies

• We have deployed the world’s largest hosted contact centre – 32,000 seats

• We operate in 173 of the worlds 194 countries

BT Global Services has developed and implemented new customer

care systems that set unprecedented standards for customer

interaction, timely response and/or attention to customer needs

“ “

Customer Service is one of those things that operators talk earnestly

about… and all claim excellence. For the first time in a long time I got

the impression that someone has grasped what this really means as

a business… This is particularly relevant as telecoms and IT merge

to become ICT. BT clearly understands this – many do not…

Well done

“

“

BT Global Services manages more than 4,000 contact centers for

worldwide clients, of which more than 100 are fully hosted. This has

enabled BT Global Services to develop deeper ‘bench strength’ for

consultants in contact center projects and a strong vision for next-

generation contact centers

“

“