BT's overhaul enters new phase

BT recently held its 2012/13 annual result briefing for analysts at the BT Centre in London. Customer service delivery, cost transformation, and investment for the future were at the heart of all of its presentations.
Of particular note was BT’s announcement that its cost transformation strategy had delivered cost savings of approximately £4.7bn over the last four years. Opex reductions were prominent in this figure, accounting for more than 86% of the total cost savings.
As part of the re-engineering of its processes, BT has created the Technology, Service & Operations business unit by merging BT Innovate and Design with BT Operate. This should create a simplified environment for vendors providing network and IT services as well as for customers and internal stakeholders.
Customer service delivery should also benefit immensely from BT’s cost transformation strategy as it will bring the operator closer to its customers. However, it is important that the focus on improving customer experience is not lost as BT looks to make further cost reductions.
BT TSO simpler for vendors
BT’s cost transformation strategy has been fuelled by the need to improve service delivery. BT understands that to effect any changes, improvements to its process management is crucial.
In January 2013, BT created the BT Technology, Services & Operations (BT TSO) business unit by merging two of its internal business service units – BT Innovate and Design and BT Operate. BT TSO offers the prospect of an end-to-end approach to operations that enhances the visibility of all related processes. The benefits include reduced handovers and overlaps in technical operations and improved management control.
Vendors that provide network and IT services will welcome the creation of the flatter purchasing structure presented by BT TSO.
Getting closer to the customer
Two of the key areas where BT reported cost savings were customer care and sales. BT has brought its customer-facing operations, such as customer care and sales, back in-house as it believes that it is better positioned to ensure the quality of service provided to its customers. This reverses the outsourcing trend, which did provide some cost benefits but did not deliver all of the expected service improvements to customers.
Instead, BT has right-sized its activities and moved some of its staff to areas of the business where the utilization of their skills can be better optimized. For example, some employees in the BT Operate business unit have been retrained and moved to customer-facing units such as BT Wholesale to enhance interactions with customers.
BT needs to be prudent when enhancing the delivery of customer experience. Taking on more services from third-party suppliers and handling these services internally means that BT is taking full responsibility for its customer support services. The operator needs to understand that employee competency and retention are extremely important to driving effective customer service delivery. Customers (either individuals or enterprises) want to be certain that their problems are being resolved by skilled and empowered staff.
In short, customer care should be placed in the hands of individuals who understand that “the customer is king”. If this is not fully understood, the impressive cost savings that BT has made would have been better spent being invested back into the business to generate more revenues.

Adaora Okeleke is analyst of telco operations at Ovum. For more information visit: