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BT Industry Development Event
Delivering the Undertakings13 & 16 March 2006
WelcomeJo Upward
2
Agenda10.30am Welcome & Introduction Jo Upward 10 mins
10.40am Update on the Delivery of the Undertakings Peter McCarthy-Ward 10 mins
10.50am Organisation and Operations (Openreach) Emma Gilthorpe 10 mins
11.00am Organisation and Operations (BTWholesale)
Angus Flett 10 mins
11.10am Q&A session 20 mins
11.30am Equivalence: What does it actually mean?• Introduction • IPStream Provision and Repair• New Product Development, Process & Governance (Generic) • Migrations
Malcolm Austin
Malcolm Austin
Keith Edwards
Guy Bradshaw
50 mins
12.20pm KPIs Andy Kennedy
Paul Hunt
15 mins
12.35pm Next steps Jo Upward 5 mins
12.40pm Q&A Session All 20 mins
1.00pm Close with lunch to follow.
BT Group Undertakings Programme Office
Peter McCarthy-Ward
4
The Undertakings
• 55 pages, 204 discrete deliverables details @ http://www.ofcom.org.uk/telecoms/btundertakings/btundertakings.pdf
• Ofcom quarterly reports @ http://www.ofcom.org.uk/telecoms/btundertakings/implementation/
• BT bulletins @ http://www.undertakingsbulletin.com/
• KPI reports @ http://www.btplc.com/Thegroup/Regulatoryinformation/Ourundertakings/KeyPerformanceIndicators/index.htm
• EAB information @ http://www.btplc.com/Thegroup/Theboard/Boardcommittees/EqualityofAccessBoard/EqualityofAccessBoard.htm
• Openreach data @ http://www.openreach.co.uk/
5
The Undertakings: Delivered
Appoint Openreach CEO by 22/10/05Establish EAB by 22/3/06Publish exchange space availability by 1/11/05Publish Code of Practice by 22/1/06Publish product transparency by 22/12/05Launch address matching service by 31/12/05IP Stream RFS date 31/12/05Wholesale product management organisation 22/1/06Establish Openreach by 22/1/06Consult on Leased Lines by 22/1/06Separately secured Openreach HQ by 22/3/06
6
The Undertakings: Pending
Exchange accommodation product due 21 March 2006
RFS for S/MPF due 30 June 2006
Access to engineering appointment books due 1 July 2006
Openreach accounts published - Q1 2006 due July 2006
RFS for WES/BES due 30 September 2006
IBMC IPStream, S/MPF due 31December 2006
RFS Analogue WLR “due” 31 December 2006
RFS ISDN2 WLR 30 September 2007
RFS ISDN30 WLR 31 December 2007
Openreach – Open for BusinessEmma Gilthorpe
8
Openreach – Open for Business• Launched 11 January 2006
• Huge amount of change was necessary:– Around 30,000 people transferred into the business– Identified the assets to be operated and controlled by Openreach –
around £8bn– Transferred delivery of the key access and backhaul products
• WLR (analogue, ISDN2, ISDN30)• LLU (SMPF, MPF)• WES• BES
• Equality of Access Board in place since November– Very active in monitoring our transformation and ensuring delivery
Although Openreach is a regulatory creation it will be judgedby its success in meeting the needs of all its customers
9
The Openreach Organisation
OperationsNorth
Andrew Jones
OperationsSouth
John Dunn
ServiceJohn Small
Sales, Product &MarketingAnne Heal
CIOColin Windsor
Chief EngineerBob Cowie
Steve RobertsonCEO
Finance &Bus Planning
Peter Cross
HRJane Hobbs
Equivalence &Public Affairs
Emma Gilthorpe
General CounselNigel Cheek
10
Some Early Achievements
People• Openreach version of the Code of Practice and ‘Key Messages for the
Engineering Community’ published• Openreach training programme (CBT, telephone-based training for engineers)
well established• Financial remuneration schemes aligned with Openreach’s Scorecard
performance• We are recruiting 1300 additional engineers• We have training plans to increase skills and capabilities across our field force
to improve network reliability Reporting• KPI product equivalence reporting
Products• Address matching service launched
11
Need for Collaboration
• Address matching– Dimensioned for 25,000 hits but only operating at 1,500– Need to understand why
• Does service meet your needs?• Are you changing your own internal processes?
– Feedback to [email protected]
• Trialling and testing environments– Trials will be essential for the effective implementation of the
Undertakings– Must trial at volume to ensure successful product launch– Need to work with our customers to ensure that you can participate
fully– Feedback to [email protected]
12
Areas for Improvement
• Customer business management– Sent letters to customers on preferred relationship management
arrangements– Have been working hard to create a new Openreach customer relationship
management team and sales culture:• Organisational design• External recruitment• Transfers from BT Wholesale
– Taken longer than hoped but have committed to have 50% resources in place by end March and remainder as soon as possible after that
• Effective communication of progress– We must have “joined–up” communications from Openreach to ensure clear,
coherent communication to our stakeholders
• Openreach branding– Employee ID Cards– Advertisements
13
Where We Go from Here
• Deliverables in the next six months– Systems platform for SMPF and MPF (30/6/06)– Improved access to engineering appointment books (1/7/06)– Measuring stakeholder satisfaction– Compliance complaints handling process– Openreach communications and engagement programme
• Reviewing customer channels• Customer Newsletter• Webcast
• Changing the way we do business is key– Equivalence becomes a core value for Openreach– Self-governing approach over-delivers on the Undertakings– We work with you - our customers - to anticipate and meet your
requirements
14
Organisation & OperationsBT Wholesale Angus Flett
15
Guiding principles
Meet both the letter and the spirit of the
Undertakings
Maintain operational
efficiencies, where no conflict with Undertakings
Design implementatio
n in an efficient manner
Drive changes in both
behaviour and outcome
Transform into a high-quality and responsive wholesaler
16
What changes have we made?
•Re-organisation of BT Wholesale Products & Strategy
•Changes to governance & processes to reflect Code of Practice requirements
•Changes to scorecards and incentive schemes
•Training, reminders and guidance
•Regular compliance checks
•Process in place for reporting any potential non-compliance
•A new more open approach to industry
17
BTW-CNS –Core Network Services
Prod mgt
Prod devt
Pricing
BTW-VNS – Value-added
Network Services
Prod mgt
Prod devt
Pricing
Product ManagementAngus Flett
Pricing
Programme ManagementPaul Banjo
Commerc. mgtCust exp -Other
CameronRejali
PortfolioTarquin Bellinger
Product Management Organisation: Separation framework
Prod mgt
PricingProd devt
BTW-UNS – Unregulated & New Services
White boxes = common functions
18
Pricing governance
•The team is split into three discrete groups which each works on pricing for only one product group
•At team meetings:
• All participate when discussing ‘how’ we do business not ‘what’ we do.
• VNS/UNS people leave the room before CNS topics are discussed
• We have separate CNS, VNS and UNS distribution and attendance lists to ensure proper separation
•WPAG agendas and minutes are also split into separate sections
•Pricing papers cannot contain any cross portfolio analysis outside of the originating product group
•MD Products & Strategy and FD are the only two people allowed to take a wider cross portfolio view across BTW
• but must still comply with the Undertakings and competition and regulatory law in general
19
Portfolio teamRole
• Development of portfolio strategy e.g.• Opportunities for new products not subject to SMP designations or the
Undertakings
• Migration from 20CN to 21CN portfolio
• Consultancy support to Product Management
• Common capabilities development• e.g. making Ethernet a common capability so we can deploy cheaper/faster
• Product marketing - communications and training
Approach
• Strict enforcement of Chinese walls across BTW Product Management• Team can help CNS or VNS (i.e. offer consultancy)
• Team can brief MD Products on cross portfolio issues but cannot influence business cases
• Team can see both CNS and VNS information but must observe Chinese walls when using it
• Information is filtered where necessary for downstream BT LoBs.
20
Scorecard
*Unit objective: • for Cameron and non product Directors the unit is Products & Strategy • for Angus and Paul the unit is CNS,VNS and UNS products• for product managers the unit is CNS or VNS
Cameron Directors excluding Angus and Paul
Angus, Paul and Don
Non-WS Managers WS Managers
Targets Weighting Targets Weighting Targets Weighting Targets Weighting Targets WeightingFor Q1-Q3 2005/06
Group objectives Existing 20% Existing 20% Existing 20% Existing 10% Existing 10%Unit objectives Existing 40% Existing 40% Existing 40% Existing 40% Existing 40%Personal objectives Existing 40% Existing 40% Existing 40% Existing 50% Existing 50%
For Q4 2005/06Group objectives None 0% Existing 20% None 0% Existing 10% None 0%Unit objectives Existing 50% Existing 40% Existing 50% Existing 40% Sub-set 50%Personal objectives Existing 50% Existing 40% Existing 50% Existing 50% Existing (provided
they are all WS-specific)
50%
* Changes in red
Products and Strategy Scorecard
21
BT WHOLESALE PRODUCTS & STRATEGY
CURRENT PRODUCTS & STRATEGY OBJECTIVES (2005/6) Proposed Measures Weighting %Threshold On Target Stretch
A) SHARED WEB ITEMS1) Safety 90% HASERD complete Threshold + 10% reduction in
collisionsTarget + 5% reduction in Lost
Time Injury10%
2) Customer Satisfaction Top Box 47% 48% 49% 10%3) 21CN 70% of BTW components
completed80% of BTW components
completed100% of BTW components
completed10%
B) UNIT ITEMS1) Total capital expenditure 20%2) ASD - Support the plan, development & launch of ASD and the dissolve & build of BTW and BTWO as appropriatePlanning & PMO resources
assignedThreshold + equivalence
issues with industry and Ofcom agreed
On Target + agreed equivalence timelines met
20%
3) Total External Revenue (excluding transit) 10%4) Total EBITDA 10%5) SG&A costs 10%
100%
Proposed Measures Weighting %
Threshold On Target StretchA) SHARED WEB ITEMS1) Safety 90% HASERD complete within
WS teams100% HASERD complete
within WS teamsN/A 20%
B) UNIT ITEMSPlanning & PMO resources
assigned for WS product setThreshold + equivalence
issues with industry and Ofcom agreed for WS product set
On Target + agreed equivalence timelines met for
WS product set
30%
3) Total External Revenue (excluding transit) £m for CNS product set £m for CNS product set £m for CNS product set 50%100%
SUBSET OF PRODUCTS AND STRATEGY OBJECTIVES FOR "CORE NETWORK SERVICES (WS) EMPLOYEES" FOR Q4 2005/6
2) ASD - Support the plan, development & launch of ASD and the dissolve & build of BTW and BTWO as appropriate
Example Scorecard
22
Training & behaviour• The real key is to ensure our people behave in accordance with both
the letter and the spirit of the Undertakings
• Over 99% of BT Wholesale managers have read the Code of Practice and completed the CBT training
• We are running road shows which use role plays to focus on the rules on sharing Commercial Information & Customer Confidential information and influencing Commercial Policy
• 1648 managers have attended 23 events to date
• We plan to train 2300 managers in total and have added extra events because of the high level of demand
• We have issued guidance notes on Commercial Information/Customer Confidential Information/Commercial Policy to the Products team
• We are developing specific guidelines for each of the common function teams
• The BTW Undertakings programme team have responded to 32 queries from Products people over the last 2 months
• proof that people are thinking about what they can and cannot do
23
Being a Good Wholesaler
•Open and transparent
•Fit for purpose products
•Proactive
A Wholesaler of Choice
Q&As
25
Equivalence in PracticeIntroduction
Malcolm Austin
26
What does equivalence of inputs mean?
The same products and services for BT and others
•Same timescales, terms and conditions (including price)
•Same systems and processes
•Operating with the same reliability and performance
•Same commercial information
•Subject only to:-
Trivial differences
Differences in credit vetting, payment, contract terms on termination, safe working, security
Other differences agreed by Ofcom
27
What does this mean in practice?
• The way that products are delivered to CPs will generally not change
• ..but BT Wholesale & Openreach will make changes to ensure that products are delivered wholly equivalently to BT’s downstream divisions
•The RFS or Ready for Service date is the date from which all new supply has to be equivalent
•The IBMC or Installed Base Migration Complete date is the date from which the existing BT installed base must be migrated to the EOI product
• For IPStream, BT Retail achieved IBMC on the same date as RFS i.e. one year early
•Migrations involving an Equivalence of Inputs product must also be equivalent
•Publication of KPIs for provision and repair
•Wholly equivalent SOR process
28
IPStream: Provision & Repair
Malcolm Austin
29
IPstream Service Fulfilment for BT Retail and BT Global Services pre Dec ‘05
BTR/BTGS BTW
BT Retail/ BT GS Order Handling systems
Workflow (CSS)
BTW Order Handling system (e.Co)
BTW Broadband Provisioning OSS
CPs
BTR/BTGS could monitor order progress Directly on CSS
30
IPstream Service Fulfilment for BT Retail and BT Global Services post Dec ‘05
BTR/BTGS BTW
BT Retail/ BT GS Order Handling systems
Workflow (CSS)
BTW Order Handling system (e.Co)
BTW Broadband Provisioning OSS
CPs
Openreach
BTR/BTGS can only monitor order progress via BTW systems & customer reports
Openreach formed and CSS moved into Openreach
BTW still has direct access to CSS Which will be removed by EOI
for new orders June ‘06
31
eCo
BB SMC BB Communications Provider
SMPF order created on
CSS
Broadband Order placed
on FlowStream
IPstream Service Fulfilment post June ‘06
B2B Gateway KCI’s
Openreach
BT Wholesale
All BTW IPstream orders and reporting on progressis via singleton B2B Gateway interface.
The same principles apply to Assurance – singleton interface andreporting
32
New Product DevelopmentBT Wholesale
Keith Edwards
33
Product development process
• BT has always operated a single product development process designed to ensure SoRs from all customers are treated on equal terms.
• We have reviewed and amended the process to :
deliver the Undertaking requirements around the separation of CNS and VNS
ensure 100% compliance with the process
34
Key Changes and Benefits
• Single, transparent process consistent with equivalence of input.
• Separate focus and management of SMP products (CNS) and products of commercial significance (VNS)
• Undertakings process discipline reinforced by Code of Practice and associated management training
Revised terms of reference for Gating bodies (define attendance and information sharing)
• New Products Requirements Forum established ensures compliant and single point of entry to the product development process
improves integration with product plans
• Key process documentation templates and guidelines revised
• Ofcom Regulatory SoR Process unchanged, now operates in Openreach and BT Wholesale.
35
Product Development Investment Governance
Product plans
Pro
cess
Ap
pro
vals
Developed separately by CNS/VNS/UNS, with no
view of resource constraints
Director, Product Management
Costedwork stack
Estimated budget requirement based on deliverables. Split CNS / VNS / UNS
Prioritisedwork stack
Director, Product Development
MD, Products & Strategy
iterative
>
<
MD ProductsInvestmentprioritisation
Based on view of resource envelope.Avoid undue discriminationTransparent decision making
Approved annual funding envelope
Shared with EAB
Product Development
BoardAllocates funds and resources.Conflicts resolved by MD, Products & Strategy
MD, Products & Strategy
and Wholesale Executive
36Requirement Management Team (RMT)
Product Development Board (PDB)
Product Requirements Forum (PRF)Internal & External Requirements / Product
Management
Corporate & International
(GS)
Consumer & Business (Retail) ISPs and SPs
BT Wholesale Product Development Process Flows
MNO & Altnets
Wholesale Customers
Service Lines (non wholesale)
Account/Commercial Management
Wholesale Service Line
Openreach (customer)
Business Unit
MARKETING
Non BTW requirements only
37
P4.Launch
P5.Closure
P3. Testing/
Trial
P2.Design &
Implement
BTWholesale Portfolio Change ProcessBTWholesale Portfolio Change ProcessPhases
Solution Designfunding
Feasibility funding
Developmentfunding
Pricing –WPAG
LaunchGo/NoGo
ProductDevelopment
Board
PortfolioInvestment
Forum
Pricing agreed Launch agreed
P0.Concept
P1. Specify
& Plan (feasibility)
D1
D2
D3
Entry
D4
D0
GATES
CIM
Post
Implementation
ReviewPRF
All SoRs
Customer Communication on Progress
38
Product Development – Process Changes
Before AfterDecision making bodies – mixed attendance and information sharing
Decision making bodies have separate attendance
One BT Wholesale work stack potentially visible to all.
Information sharing guidelines
Logical separation of information on all product management systems
Inconsistent entry to product development process
All entry is via new single “Front Door”
Inconsistent application of equivalence of input
Explicit checks by governance bodies and submission template guidance
Process not transparent, creating potential suspicion
One generic BT Group process operated by all Business Units
Lack of direct integration at point of entry with product plans
Refreshed Product Plans and new PRF have common ownership
39
Cross Portfolio Migrations
Guy Bradshaw
40
Communication Provider Migrations Today
IP-IP
IP-DS
DS - IP
IP - LLU
LLU - IP
Equivalence Demonstrated
Migrations
Standard lead times
Same order gateways
Same order processes
Same reporting mechanisms
Same pricing
Same systems
All CPs
41
Migrations Challenges
BB LLU WLR CALLS NO. PORT
PRODUCTS LINES
MULTIPLE MIGRATIONS
CONVERGENCE
MAJOR CHALLENGES:
• Alignment of processes, policies, systems, technologies
• Implementing a single system across different work stacks and with Industry
42
Migrations Future Strategy Strategy
To provide a seamless End to End standardised any-to-any migration process led by Consumers which neither favours the Gaining/Losing CP, yet allows free competition, ease of switching, takes account of multi provider/ multi product
transfers and minimises End User involvement whilst satisfying the requirements of the Undertakings
Key PrinciplesAny solution must meet the objectives of keeping the Customers well informed and
well protected. Customer experience must facilitate ease of switching
The Solution:
Symmetrical seamless migration processesDifferentiation between product sets
Aligned lead times21CN compatibility
Fully strategic systemsFaster time to market
Aligned KPIs
The Benefit:
‘Spirit’ of the UndertakingsImproved customer experience and
flexibilityStove pipe developments eliminated
Potential savings/increases efficiencies across industry
Any-any migrations
43
Migrations Going Forward
• Developed an ‘equivalent’ framework
• Based upon feedback from Industry
• Awaiting outcome Ofcom consultation
• Feasibility underway to test the broad technical viability
(Upstream and Downstream)
44
KPIsBT Wholesale
Andy Kennedy
45
New BT reporting structure
BT BT Retail
Main BT PLC Board
BT GlobalServicesOpenreach
OpenreachBoard
OperatingCommittee
BT WholesaleBoard
BT RetailBoard
BT GSBoard
EAB
BT CEOManagement reporting
Compliance oversight
Wholesale
46
KPI reporting
• BT reports monthly to the EAB on:– Progress towards delivering the Undertakings– Provision and repair for Equivalence of Input products plus
DataStream and PPCs– Code of Practice training completion– Customer satisfaction measures– Employee attitudes & opinions (annually)– Complaints
• BT reports quarterly to industry on:– Undertakings delivered– Product provision and repair KPIs – Code of Practice training completion– Details are at
www.btplc.com/Thegroup/Regulatoryinformation/Ourundertakings/KeyPerformanceIndicators/
47
BT Wholesale KPI principles• Objective is to demonstrate equivalence/transparency by measuring
comparative service levels between customers
• Complement existing published product KPIs
• We will report product KPIs for:
• IPStream
• DataStream
• PPCs
• IPStream migrations
• Initial reports will use those existing KPIs we consider most important:
• Fulfilment / assurance
• We will add/amend these over time following consultation with industry and the EAB
• These KPIs will be reported monthly to the EAB and quarterly to industry
48
Product KPIs
BT IPstream Fulfilment % orders completed by CCD Assurance % Broadband faults cleared by
BT Wholesale within 40 hrs of receipt
BT Datastream Fulfilment % orders completed by CCD Assurance % Broadband faults cleared by
BT Wholesale within 40 hrs of receipt
PPC Fulfilment The percentage of Service orders successfully completed on or before the committed delivery date
Assurance The number and percentage of product faults that are cleared within 5 hours
49
Example Graphs
• http://www.btplc.com/Thegroup/Regulatoryinformation/Ourundertakings/KeyPerformanceIndicators/KeyProductPerformanceIndicators/index.htm
Example KPI graphs (on the BT Group Web-site)
50
Product KPIsMigrations
Overview
• Compare performance between the various “Broadband” migration paths (BT IPstream, BT Datastream and LLU)
• No KPIs currently exist
• Different processes and lead-times complicates direct comparison between migration types
Proposal
• For fulfilment use % success by Original Delivery Date
• Initial KPI plans shared with UKCTA, measures now being developed
51
Product KPIsCPS
• No KPIs currently exist
• Unable to identify relevant comparative measures
• Welcome feedback
52
Next Steps
• Seek your feedback on these Product KPIs
• Feedback to [email protected]
• BT Wholesale will host an industry working group end of April to ensure:
• Proposed measures are fit for purpose
• Identify improvements
• Plans to enhance the IPstream / Datastream fulfilment KPI
• Existing measure based on BT Retail system (CSS)
• Moving to BT Wholesale eCo system based measure
• Ensure all activity types are captured
KPIs OpenreachPaul Hunt
54
Openreach products
Initial product set:
• Wholesale Line Rental – analogue, digital and ISDN30• Local Loop Unbundling – classic(full) and shared• Wholesale Extension Services• Backhaul Extension Services
• We provide performance reporting to EAB monthly and industry quarterly.
• We compare BT v External CP
• As a result of looking at performance on each measure Openreach investigates and explains to the EAB possible areas of non equivalence – monthly.
55
Openreach products - the performance graphs.
WLR PROVISION Business / Residential Transfer
ANALOGUE / DIGITAL Business / Residential New Provide
WLR PROVISION Business Transfer
ISDN30 Business New Provide
Business / Residential Standardcare (Level 1)
WLR REPAIR ANALOGUE Business / Residential Promptcare (Level 2)
Business / Residential Totalcare (Level 3)
WLR REPAIR Business / Residential Standardcare (Level 1)
DIGITAL Business / Residential Totalcare (Level 3)
WLR REPAIR Business Promptcare (Level 2)
ISDN30 Business Totalcare (Level 3)
56
Openreach products - the performance graphs.
LLU PROVISION Shared (SMPF)
Classic (MPF)
Shared faults cleared in 40 clock hrs (excl. park)
LLU REPAIR Classic faults cleared in 40 clock hrs (excl. park)
Classic (enhanced) faults cleared in 20 clock hrs (excl. park)
WES PROVISION
WES REPAIR
BES PROVISION
BES REPAIR
57
Openreach products - Example performance graphs
WLR Analogue Repair - Business Standard Care(Comparison of Repair performance)
0
5
10
15
20
Feb-05
Mar-05
Apr-05
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Ave
rage
tim
e to
res
tore
(w
kg h
rs)
BT Extl CPs BT 12 month Ave. Extl CPs 12 month Ave.
WLR Analogue Repair - Business Prompt Care(Comparison of Repair performance)
0
5
10
15
20
Feb-05
Mar-05
Apr-05
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Avera
ge tim
e to r
esto
re (
wkg h
rs)
BT Extl CPs BT 12 month Ave. Extl CPs 12 month Ave.
WLR Analogue Repair - Business Total Care(Comparison of Repair performance)
0
10
20
30
40
50
Feb-05
Mar-05
Apr-05
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Ave
rage
tim
e to
res
tore
(w
kg h
rs)
BT Extl CPs BT 12 month Ave. Extl CPs 12 month Ave.
WLR Analogue Repair - Residential Standard Care(Comparison of Repair performance)
0
10
20
30
Feb-05
Mar-05
Apr-05
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Ave
rage
tim
e to
res
tore
(w
kg h
rs)
BT Extl CPs BT 12 month Ave. Extl CPs 12 month Ave.
Next Steps
Jo Upward
59
Next StepsFEB 06 MAR 06 APR 06 MAY 06 JUN 06 JUL 06 AUG 06 SEP 06 OCT 06 NOV 06 DEC 06
Product Migrations
Further Roadshows
Exchange Space
Consultation closed
Bulletin (4-6 weekly)
KPIs published, feedback requested
Working Group
Consultation Closure
NetLocate target launch
KPIs
60
Feedback
Q&As
Close
Jo Upward
