Important Note – please readLean is a long-term approach to change and by focusing on 5 diverse lenses (Customer at the centre, People, Performance, Mindset and Process) aims to improve customer satisfaction and increase people’s engagement whilst make our processes more efficient (reducing costs as a result).

In a number of instances, “FTE cost savings” is mentioned as one of our commitments. This is only in relation to one of the Lean Lenses (Process) where FTE is BT’s currency of choice to track benefits achieved through the Lean Process improvements.

It is important to stress that the use of the words “FTE cost savings” does not necessarily equal to BT job losses. The ISDT management team is committed to protect BT’s people jobs whenever possible and target existing job vacancies and contractor work in the first instance as well as re-deployment of efficiencies to authorised growth areas.

Why Lean, Why now?Challenging business environment

It’s a challenging market:

• Fierce competition• Bandwidth requirements are increasing• Our customers want more for less

So...We need to offer excellent customer experience, consistently.

We need to deliver the right things efficiently, at the right price for our customers.

Play the videoTo respond to this we need to:

• Deliver competitive, high quality and secure services

• Work with our customers to better understand what they want

• Stop doing the things which our customers don’t value.

So... that we can get better at what we do and

make our people’s lives easier.And at the same time, play our part in helping BT grow.

Play the video

Executive Summary SlideOur commitment to Charter Objectives (33 FTE and 5 FTE cost avoidance vs. 29 FTE in charter, CE Improvements and LWOW Maturity)

Deep-Dive on Inbound Contact GlobalBenchmarking analysisCost and RevenueFuture State VisionAs-Is vs. TC1 analysis

Our TC1 commitments on People, Performance and Mindset

Our TC1 commitments on CE & Financials

See Notes slide – FTE is the currency used to measure process improvements but

does not necessarily equal to BT Job reductions. There’s a number of ways of

achieving this goal whilst minimising impact to our people (e.g. targeting

vacancies and contractors)

See Notes slide – FTE is the currency used to measure process improvements but

does not necessarily equal to BT Job reductions. There’s a number of ways of

achieving this goal whilst minimising impact to our people (e.g. targeting

vacancies and contractors)

By focusing on 5 diverse lenses (Customer, People, Performance,

Mindset and Process) Lean aims to improve the way we deal with our

customers and with our people whilst making BT more cost efficient

By focusing on 5 diverse lenses (Customer, People, Performance,

Mindset and Process) Lean aims to improve the way we deal with our

customers and with our people whilst making BT more cost efficient

COMMITMENT PRESENTATIONREDESIGN AND TC1 LEAN WAVE 3 ICSD MISCELLANEOUS PRODUCTS

Inbound Contact Global Operator Rankings

BT

Orange

Cable & Wireless

AT&T

Verizon

T-Systems

Telefonica

Source Data provided by OVUM

This slide is specific to Inbound Voice. You can find your process specific

commitment slides Here

This slide is specific to Inbound Voice. You can find your process specific

commitment slides Here

Inbound Contact Global competitive story

Best in class Weakness Strength Neutral

BT Orange C&W Verizon

Inbound NetworkCapacity

Inbound ServiceSurround

Inbound Pricing

Bundles

Inbound Reports& Controls &Analytics

FeatureFunctionality

Largest global network

Automatic reporting with ‘call traffic’reporter’ tool. Allows customer plan changes

Best in market

Priced at a premiumto competition

Greatest reach of all competitors. Most robust functionality when combined with Interactive Voice Response (IVR ) andMultimedia ContactCentre (MCC)

Best-in-class in some cases. Specifically when bundled with IVR or MCC. Features are included in Pricing

Large network coverage. Recently expanded using Mobil sites for access. Issues with VoIP.

Limited reportingcapability. Good customer control of Routing options

Service Issueson some routes

No consistencyin pricing

Varied. BT functionality better at high end. Missing reach of CCS. Adding an MCClike platform

Strength when bundled with data transport

Fairly large networkon limited set of routes. Focused on low end ofmarket except for Spain

Specialised reports for larger customers. Allow customers to change switched terminations on the fly

Good service Spain

Good service onlimited routes

Tends to ‘buy’ business

Limited ability better at high end. Missingreach of CCS

Limited bundling

Fairly large networkon limited set of routes. Focused on low end ofmarket except for Spain

Limited reporting capability. Good customer control for US / iTFS applications

Service has sufferedover recent years

Strong whencombined withdomestic US

Varied. Missing reach of CCSI. However, better functionality for domestic services

Strong when bundle with domestic service offerings

Source Data provided by OVUM

This slide is specific to Inbound Voice. You can find your process specific commitment slides Here

This slide is specific to Inbound Voice. You can find your process specific commitment slides Here

Inbound Contact Global As Is Waterfall

40 FTE

9 FTE

Overtime

Standard Allowances

Unavailable Time

Waste5 FTE

45 FTE 45 FTE

1.5 FTE

27 FTE

17 FTE

See Notes slide – FTE is BT’s currency of choice when

measuring process efficiency, hence the reason why it is used in the chart,

along with hours equivalent.

See Notes slide – FTE is BT’s currency of choice when

measuring process efficiency, hence the reason why it is used in the chart,

along with hours equivalent.

This slide is specific to Inbound Voice. You can find your

process specific commitment slides Here

This slide is specific to Inbound Voice. You can find your

process specific commitment slides Here

Future StateInbound Contact Global Process redesign overview

1. Replace current manual Data Capture Form (DCF) & provide means for electronic data entry into VLP by account team.

2. Remove manual intervention for design template. Auto-populates.

3. Significantly reduce PTT dwell time by creating pre-built inventory of International access services. (Wait time in BT control)

4. Enable partial self provisioning to the customer for endpoints & routing features. Access retained within BT entity.

5. Auto generation of BT dial plan to support customers & automated billing population.

6. System generated notification of order closure to the customer via VLP. (Voice Logical Provisioning)

Key changes

1. Simplified on-line ordering service with built in validation checks to reduce errors and improve customer experience.

2. Auto populated configuration template with critical data including built in validation, reduces touch time and ELF’s

3. Reduce PTT dwell time from an average of 64 days to 1 working day ultimately improving overall cycle time and Customer Experience.

4. Increasing customer control of their call features and routing with self provisioning capability, ultimately reducing cost of delivery.

5. Provides real time inventory capability, reduces touch points and improves customer access to their own inventory.

6. Replaces manual notification and multiple touch points removes cost, and reduces delays in order process.

Performance benefits

Future State – Process

Direct Sales Entry via Portal

1

Direct Sales Entry via Portal

1

Design Template Auto-populates

from Portal2

Prebuilt Ownership of

INT Access3

Prebuilt Ownership of

INT Access3

Customer selfProvisioning

capability4

Customer selfProvisioning

capability4

System Generated Customer Inventory

5

System Generated

Notification of Order Closure

6

System Generated

Notification of Order Closure

6

Indicates standard order flow approx 75% Indicates support required for complex orders equating to approx 25%

This slide is specific to Inbound Voice. You can find your process specific commitment slides Here

This slide is specific to Inbound Voice. You can find your process specific commitment slides Here

Target Condition 1Inbound Contact Global Process

redesign overview1. Produce new order template to reduce re-work issues identified in “As is” process.

2. Create PTT inventory database in order to own complete E2E delivery for access ordering.

3. Re-design Telephony Server B number analysis to incorporate generic command line as opposed to single entry

4. Introduce bulk upload capability within configuration management function to support increasing order volumes .

5. Graduated reduction in dual platform builds as Firebird migration progresses.

6. IPMS re-design improvement. Introduction of mandatory fields to prevent re-work on network DDI allocation and bulk change functionality.

Key changes

1. Remove waste in re-work at both order and configuration stages preventing errors and improving RFT, ELF’s and Customer Experience.

2. IFF PTT dwell time reduction from an average of 64 days to 1 day for fast track requests, improving Customer Experience. (VOC)

3. Cycle time improved by 4 min’s per service delivered by redesigning command line entries into Telephony Servers.

4. Reduction in processing time by 6 min’s/service with the introduction of bulk upload capability of command line data into GUI interface.

5. Firebird Project will have achieved migration of just over 70K services by the end of TC1 reducing the need for double keying.

6. Prevents dual allocation of network DDI’s, removing waste and improving process flow and Customer Experience.

Performance benefits

ConfigurationSignoff &

Maintenance(Other LOB)

Sales Order Handling

(Other LOB)

Order Submitted

Order Access Delivery of Service

Rework – Missing or

incorrect data

25% Cost reduction End-End Delivery

This slide is specific to Inbound Voice. You can find your process specific commitment slides Here

This slide is specific to Inbound Voice. You can find your process specific commitment slides Here

VERTICAL LENSESDENNIS GREEN

Lean Ways of Working are part of my team’s DNA.

TC1What will we do? How are we going to do it? How will we know it’s worked?

Deploy standard work and process confirmation.

Managers use performance dialogue to identify tasks appropriate for standard work; those who do the work to shape the standard work. Managers do process confirmation weekly.

• Lean Maturity weekly self-assessment.• Documented standard work.• Managers agree with teams daily standard work.

Performance Board and huddles operating as BAU.

Set up Performance Boards at each level of the organisation with cascade up and down. Standard work for managing the Performance Board and daily huddles.

• Lean Maturity weekly self-assessment: Bronze level achieved.• Positive feedback from the team. Improvement ideas managed at

the appropriate level and contribute towards the future state.

Improve the % of orders we receive into our processes right first time.

Managers commit to identifying their clean order % and to working with upstream partners on root cause analysis to identify reasons for unclean orders.

• Improved % of clean orders (baseline dependent on A3 current condition).

TC1

FutureState

AS IS

The processes hinder my performance.

Managing our PerformanceKey Issues Current State:People want to do the best jobs but the processes hinder them (ABRB Q3 Care Report).Team measures are not clearly aligned to the Voice of the Customer (Lean Maturity baseline & vertical data collection).Teams feel process discussions are top-down rather than bottom up or two-way (ABRB Q3 Care Report & Lean Maturity baseline).

I understand and deploy standard work and engage proactively with my manager during process confirmation. I work with colleagues who do the job to shape standard work.

TC1

I will use the skills matrix to work with my manager to develop a quality PDP aligned to meet future demand.

TC1What will we do? How are we going to do it? How will we know it’s worked?

Skills Matrices deployed. All teams to have up-to-date skills matrices which are visible and discussed at performance dialogue.

• Lean Maturity weekly self-assessment.• Standard work agreed by teams to review and refresh their skills

matrices to ensure alignment to their Voice of the Customer.

Process level multi-skilling started.

Managers use the team skills matrix as part of performance dialogue. Managers work with their teams to identify multi-skilling requirements aligned to their Voice of the Customer.

• Multi-skilling training commenced to impacted personnel.

Document handover procedures between teams in Miscellaneous Products.

Nominated representatives from each trade to work jointly on an A3. Required output is an agreed approach and template to summarise key handover information.

• Completed A3 and delivered handover document.• Standard work deployed for completion.• Reduction in handover issues between trades (baseline TBA as part of

A3).

FutureState

AS IS

I feel my skills are not fully utilised and I want to develop new skills.

My team’s skills matrix is constantly updated and visible, and fully aligned to VOC. Every team member has a tailored development plan aligned to this.

Organising our people and developing their skillsKey Issues Current State:

People feel their skills are not fully utilised and they lack opportunities to learn new skills (Lean Maturity baseline & Job Satisfaction Survey).Job roles, gradings and working practices are not directly aligned to the Voice of the Customer (proven vertical hypothesis & HR data collection).Some teams are dispersed across many locations in the UK and abroad, making it harder to share learning about how best to deliver for our customers (Trade 28b vertical data collection).

TC1What will we do? How are we going to do it? How will we know it’s worked?

Managers spend 50% of their time with the team.

All managers complete A3s on how they spend their time and then complete a STOP/START/CONTINUE exercise to identify and remove non-value add activities from their diaries.

• Completed Manager Time Analysis tracker at week 15 to gauge % of time spent coaching the team.

• Improvement in Job Satisfaction Survey questions: “Does your manager spend quality time with you discussing your work?”; “Do you have the opportunity to work with your team to solve problems?”

Coaching on structured problem solving (A3) is BAU.

Equip managers and team members with structured problem solving skills which we will actively use at all levels. Managers deploy coaching Kata to upskill teams on A3 methodology.

• Lean Maturity weekly self-assessment.• Clear evidence we are resolving root causes rather than

symptoms.• Observation at performance boards to ensure A3 approach

being used.

AS IS

TC1

Future State

Having the right mind-set

My manager doesn’t spend enough quality time with me coaching at the coalface.

My manager is a great coach, who spends 50% of his/her time with the team, helping us to stretch our capabilities.

I understand and use problem solving techniques and my manager coaches me on them.

Key Issues Current State:Managers spend too much time on non value-add activities rather than coaching their teams and “going to gemba” (vertical data collection, Manager Time Analysis).We fire-fight rather than use a structured approach to problem solving (ABRB Q3 Care Report, Lean Maturity baseline, Team member feedback).Teams are not fully clear on their purpose and its alignment to VOC (proven vertical hypothesis, Lean Maturity baseline & VOC data collection)Teams are concerned about the impact of Lean on their jobs (ABRB Q3 Care Report).

Target Condition 1 Effort Waterfall – TC1 Commitment

146 FTE

138 FTE

6.5 FTE

115 FTE

1 FTE saving through LWOW

Non-processing

time

Standard allowances

outside diagnostic

Total available

within diagnostic

Processing Failure

DemandNVA Rework NNVA

Activities

7.4 FTE

50 FTE

36 FTE

3.6 FTE

12.9 FTE

7.9 FTE 1 FTE saving through LWOW

1 FTE saving through LWOW

25 FTE saving through process re-engineering1+ 3

FTE

1.5 FTE

23 FTE

7.2 FTE5 FTE

Saving Summary Saving

Process re-engineering (productive time)

25

LWOW 1

Standard allowances equivalence

7

Total 33

0.1 FTE

7 FTE converting productive time to FTE

115 FTE

See Notes slide – FTE is BT’s currency of choice when

measuring process efficiency, hence the reason why it is used in the chart, along with hours

equivalent.

See Notes slide – FTE is BT’s currency of choice when

measuring process efficiency, hence the reason why it is used in the chart, along with hours

equivalent.

TC1 Efficiencies Summary

Process Name CTQ Requirements

Percentage of Population in

Scope

VA % (within

the process

flow)

Number of FTE TC1 Efficiencies

Trade 12

• Specific detail on escalations• Quicker Cycle Time (E2E)• Quicker Cycle Time (with our

suppliers)• RFT Delivery

39% FTE 39% 57 FTEVoice Outbound = 6 FTE

Voice Inbound = 5 FTE + 5 FTE Cost AvoidanceLWOW = 1 FTE

Trade 6

• Flexible response to in-production changes

• Quicker Cycle Time • RFT Delivery

49% FTE 24% 71 FTE

LAN = 9 FTEIPT = 3 FTE

AVAYA = 5 FTEDST = 1.5 FTE

Trade 28B

• Quicker quotes• Handover pack accuracy with circuit

and contact details• Specific detail on escalations• Quicker Cycle Time • RFT Delivery

7% FTE 8% 10 FTE IPLC = 2.5 FTE

TOTAL 95% (plus managers)

138 (out of 146 in scope)

33 FTE efficiencies + 5 FTE CA(23% of 146 in-scope)

See Notes slide – FTE is the currency used to measure process improvements but does not

necessarily equal to BT Job reductions. There’s a number of ways of achieving this goal whilst

minimising impact to BT people (e.g. targeting vacancies and contractors)

See Notes slide – FTE is the currency used to measure process improvements but does not

necessarily equal to BT Job reductions. There’s a number of ways of achieving this goal whilst

minimising impact to BT people (e.g. targeting vacancies and contractors)

Having the right mindset Organising our people and developing their skills

Managing our performanceMaking processes more efficient

Target Condition 1 Commitment Summary

• Reduced cycle time (specific targets vary by process)

• Saving 33 FTE (23%) due to process re-engineering activities enabled by;

o Creating Flowo Controlling Flowo Managing Demand

Listening to our Customers

•Reduced end to end cycle time•Already very good RFT service levels maintained or improved•Improved escalation and KCI process •Local CE metrics tracked via Performance Boards

• We will work with our teams to identify and shape standard work for key tasks; managers will undertake process confirmation.

• Performance boards and performance huddles will be BAU at all levels of the organisation.

• We will work with our upstream partners to identify and rectify the root causes of unclean orders entering our processes. We will establish a robust ‘as is’ picture first before planning and deploying improvements.

• All teams will have visible, up-to-date skills matrices which align to VOC, and are reviewed during performance dialogues.

• Multi-skilling training will be rolled out based on forecast demand and team skills matrices.

• Handover procedures between teams in Miscellaneous Products will be developed and documented, underpinned by standard work.

•All managers will complete A3s on how they spend their time and do a STOP/START/CONTINUE exercise to remove non-value-add activities from their diaries. They will spend more of their time where the work takes place coaching their teams.

•We will equip managers and team members with structured problem solving skills which we will use at all levels. Managers will deploy coaching Kata to upskill teams on A3 methodology to make structured problem solving BAU.

By focusing on 5 diverse lenses (Customer, People, Performance, Mindset and Process) Lean aims to improve the way we deal with our customers and

with our people whilst making BT more cost efficient

By focusing on 5 diverse lenses (Customer, People, Performance, Mindset and Process) Lean aims to improve the way we deal with our customers and

with our people whilst making BT more cost efficient

As per Notes slide, FTE does not necessarily equal to BT job reductions, there are a number of ways to achieve

these targets whilst minimising the impact to BT people

As per Notes slide, FTE does not necessarily equal to BT job reductions, there are a number of ways to achieve

these targets whilst minimising the impact to BT people

BACK UP SLIDES

As Is SummaryProcess Name CTQ Requirements Percentage of Population

in ScopeVA %

(within the process flow) Number of FTE

Trade 12

• Specific detail on escalations• Quicker Cycle Time (E2E)• Quicker Cycle Time (with our

suppliers)• RFT Delivery

39% FTE 39% 57 FTE

Trade 6

• Flexible response to in-production changes

• Quicker Cycle Time • RFT Delivery

49% FTE 24% 71 FTE

Trade 28B

• Quicker quotes• Handover pack accuracy with

circuit and contact details• Specific detail on escalations• Quicker Cycle Time • RFT Delivery

7% FTE 8% 10 FTE

TOTAL 95% (plus managers) 138 (out of 146 in scope)

See Notes slide – FTE is the currency used to measure process improvements but does not

necessarily equal to BT Job reductions. There a number of ways of achieving our process goals

whilst minimising impact to BT people (e.g. targeting vacancies and contractors)

See Notes slide – FTE is the currency used to measure process improvements but does not

necessarily equal to BT Job reductions. There a number of ways of achieving our process goals

whilst minimising impact to BT people (e.g. targeting vacancies and contractors)

Taking re-design to the teams

Step 1 Step 2 Step 3 Step 4

30%

1) Show Team members the

4FM

2) Explain waste, and why a step is

NVA etc.

3) Show rework, and explain this is where

some of the improvements come

from

Show list of Improvements, and how they fit into the process.

Explain TC1, and what impact that has on the process

Explain the tools and techniques that they will learn to help complete the improvements –

A3 masterclass