BT Industry Development Event Delivering the Undertakings 13

1
BT Industry Development Event Delivering the
Undertakings13 16 March 2006

• Welcome
• Jo Upward

2
Agenda
10.30am 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 QA 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 QA Session All 20 mins
1.00pm Close with lunch to follow.
3
BT Group Undertakings Programme Office

• Peter McCarthy-Ward

4
The Undertakings

• 55 pages, 204 discrete deliverables details _at_
  http//www.ofcom.org.uk/telecoms/btundertakings/bt
  undertakings.pdf
• Ofcom quarterly reports _at_ http//www.ofcom.org.uk/
  telecoms/btundertakings/implementation/
• BT bulletins _at_ http//www.undertakingsbulletin.com
  /
• KPI reports _at_ http//www.btplc.com/Thegroup/Regula
  toryinformation/Ourundertakings/KeyPerformanceIndi
  cators/index.htm
• EAB information _at_ http//www.btplc.com/Thegroup/Th
  eboard/Boardcommittees/EqualityofAccessBoard/Equal
  ityofAccessBoard.htm
• Openreach data _at_ http//www.openreach.co.uk/

5
The Undertakings Delivered
Appoint Openreach CEO by 22/10/05 Establish EAB
by 22/3/06 Publish exchange space availability by
1/11/05 Publish Code of Practice by
22/1/06 Publish product transparency by
22/12/05 Launch address matching service by
31/12/05 IP Stream RFS date 31/12/05 Wholesale
product management organisation 22/1/06 Establish
Openreach by 22/1/06 Consult on Leased Lines by
22/1/06 Separately secured Openreach HQ by
22/3/06
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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
7
Openreach Open for Business

• Emma 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 judged by its success in meeting the
needs of all its customers
9
The Openreach Organisation
Steve Robertson CEO
Finance Bus Planning Peter Cross
HR Jane Hobbs
Equivalence Public Affairs Emma Gilthorpe
General Counsel Nigel Cheek
Operations North Andrew Jones
Operations South John Dunn
Service John Small
CIO Colin Windsor
Chief Engineer Bob Cowie
Sales, Product Marketing Anne Heal
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
  Openreachs 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 andy.l.marshall_at_openreach.co.uk
• 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 richard.j.warner_at_openreach.co.uk

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 joinedup 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
Maintain operational efficiencies, where no
conflict with Undertakings
Meet both the letter and the spirit of the
Undertakings
Transform into a high-quality and responsive
wholesaler
Design implementation in an efficient manner
Drive changes in both behaviour and outcome
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
Product Management Organisation Separation
framework
White boxes common functions
Cameron Rejali
Portfolio Tarquin Bellinger
Product Management Angus Flett
Programme Management Paul Banjo
Commerc. mgt Cust exp -Other
Pricing
Prod mgt
Prod devt
Pricing
Prod mgt
Prod devt
Pricing
Prod mgt
Pricing
Prod devt
BTW-CNS Core Network Services
BTW-VNS Value-added Network Services
BTW-UNS Unregulated New Services
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 team

• Role
• 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

21
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
24
QAs
25
Equivalence in PracticeIntroduction
Malcolm Austin
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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 BTs 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
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IPstream Service Fulfilment for BT Retail and BT
Global Services pre Dec 05
BTR/BTGS
BTW
CPs
BT Retail/ BT GS Order Handling systems
BTW Order Handling system (e.Co)
BTW Broadband Provisioning OSS
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
CPs
BT Retail/ BT GS Order Handling systems
BTW Order Handling system (e.Co)
BTW Broadband Provisioning OSS
BTR/BTGS can only monitor order progress via
BTW systems customer reports
BTW still has direct access to CSS Which will be
removed by EOI for new orders June 06
Openreach formed and CSS moved into Openreach
Openreach
31
IPstream Service Fulfilment post June 06
BB Communications Provider
BB SMC
BT Wholesale
eCo
The same principles apply to Assurance
singleton interface and reporting
Broadband Order placed on FlowStream

All BTW IPstream orders and reporting on
progress is via singleton B2B Gateway interface.
B2B Gateway
KCIs
SMPF order created on CSS
Openreach
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
MD, Products Strategy and Wholesale
Executive
MD, Products Strategy
Director, Product Management
Director, Product Development
Approvals
Shared with EAB
Estimated budget requirement based on
deliverables. Split CNS / VNS / UNS
Developed separately by CNS/VNS/UNS, with no
view of resource constraints
Based on view of resource envelope. Avoid undue
discrimination Transparent decision making
MD Products Investment prioritisation
Product plans
Costed work stack
Prioritised work stack
Process
Approved annual funding envelope
Product Development Board
Allocates funds and resources. Conflicts resolved
by MD, Products Strategy
36
BT Wholesale Product Development Process Flows
Corporate International (GS)
Consumer Business (Retail)
Openreach (customer)
ISPs and SPs
Account/Commercial Management
Service Lines (non wholesale)

• MARKETING

Business Unit
Product Requirements Forum (PRF) Internal
External Requirements / Product Management
Wholesale Service Line
Non BTW requirements only
Product Development Board (PDB)
Requirement Management Team (RMT)
37
BTWholesale Portfolio Change Process
Phases
P4.Launch
P5.Closure
P3. Testing/Trial
P2.Design Implement
P0.Concept
P1. Specify Plan (feasibility)
Entry
D1
D3
D4
D2
D0
GATES
All SoRs
Post Implementation Review
Pricing WPAG
Launch Go/NoGo
Product Development Board
Portfolio Investment Forum
PRF
CIM
Pricing agreed
Launch agreed
Solution Design funding
Feasibility funding
Development funding
Customer Communication on Progress
38
Product Development Process Changes
Before After
Decision 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
Equivalence Demonstrated
Migrations
IP-IP
Standard lead times
Same order gateways
IP-DS
Same reporting mechanisms
DS - IP
Same order processes
All CPs
Same pricing
IP - LLU
Same systems
LLU - IP
41
Migrations Challenges
PRODUCTS LINES
NO. PORT
CALLS
BB
LLU
WLR
CONVERGENCE

• MAJOR CHALLENGES
• Alignment of processes, policies, systems,
  technologies
• Implementing a single system across different
  work stacks and with Industry

MULTIPLE MIGRATIONS
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 Principles Any 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
processes Differentiation between product
sets Aligned lead times 21CN compatibility Fully
strategic systems Faster time to market Aligned
KPIs
The Benefit Spirit of the Undertakings Improve
d customer experience and flexibility Stove 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
Main BT PLC Board
BT CEO
Management reporting
Compliance oversight
Operating
EAB
Committee
BT Retail
BT GS
OpenreachBoard
BT Wholesale
Board
Board
Board
BT
BT Global
BT Retail
Openreach
Services
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/Regulatoryin
  formation/Ourundertakings/KeyPerformanceIndicators
  /

47
BT Wholesale KPI principles

• Objective is to demonstrate equivalence/transparen
  cy 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
Fulfilment orders completed by CCD Assurance
Broadband faults cleared by
BT Wholesale within 40 hrs of receipt
BT IPstream
Fulfilment orders completed by CCD Assurance
Broadband faults cleared by
BT Wholesale within 40 hrs of receipt
BT Datastream
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
PPC
49
Example Graphs

• Example KPI graphs (on the BT Group Web-site)

• http//www.btplc.com/Thegroup/Regulatoryinformatio
  n/Ourundertakings/KeyPerformanceIndicators/KeyProd
  uctPerformanceIndicators/index.htm

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 bt.wholesale.product.marketing_at_bt.com
  
• 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

53
KPIs Openreach

• Paul 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
58
Next Steps

• Jo Upward

59
Next Steps
FEB 06 MAR 06 APR 06 MAY 06
JUN 06 JUL 06 AUG 06 SEP 06 OCT
06 NOV 06 DEC 06
Exchange Space
Consultation closed
NetLocate target launch
KPIs
KPIs published, feedback requested
Working Group
Consultation Closure
Product Migrations
Further Roadshows
Bulletin (4-6 weekly)
60
Feedback
61
QAs
62
Close

• Jo Upward