Strategic outsourcing From network to business

Franck Cormier - BT

The Digital Networked Economy Where connectivity has no more boundaries

Connections, any time, any place, any device

The Digital Networked Economy the drivers of outsourcing

Consolidation& restructuring

Organisational agility

More for lessCustomer centricity

Hostile environment

and increased competition

Global IP Infrastructure Services

Application Management Services

Networked ITOutsourcing Services

BusinessTransformation

Partners

Global IP Infrastructure Services

Application Management Services

Networked ITOutsourcing Services

BusinessTransformation

PartnersPartners

Targeted propositions

Proven capability

Global reach

World-class partners

Leveraging BT network expertise

Exploiting BT practitioner experience

BT is a global IT and networking services company with

BT already has a strong track recordin outsourcing and networked IT services

19% revenue growth last year (>20% in France)

“A surprise front runner in the ICT outsourcing race is BT” (source The Times 8th June 2004)

BT signed more than 160 outsourcing contracts, with an estimated contract value of over £10 billion

60% of Fortune 500 companies and two third of the CAC40 rely on BT

Our contracts range from Bradford and Bingley, worth £3.75m over 5 years, transferring all existing assets and 3 people transferred, to Unilever worth € 1billion, transfer of €20million of assets and transfer of up to 150 employees

Evidence of BT’s success

Thank you

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Back up slides

New challenges and consequences in the digital networked economy

The consequences for organisations are twofold:

•New opportunities

to increase operational efficiency

reach new customers and markets

create new modes of organisation

•New challenges

to manage increasingly

complex business ecosystems

to manage an increasingly competitive environment

The vicious circle...

IT and communications systems- the key tools to help address business challenges

Businesses frequently concerned with business continuity, security and network performance

The pace of change distracts companies from core business

20 per cent of corporate IT spending fails to deliver

What you buy today will be out of date in 18/24 months

Less than 35% of integration projects come in on time and on budget.

Sources: Gartner Group; Forrester Research.

Evidence of BT’s success

Infrastructure• NHS, £168m – Managed

network/broadband

• TNT - European WAN

• Merrill Lynch - Global WAN

• Bank of America, Optical

• LIFFE, Storage

Outsourcing• Unilever , £640m- global voice

and data

• Royal Mail, £500m (with CSC)

• HBOS, – Managed voice & data

• National Australia Bank, £145m – Managed ICT

• Bradford and Bingley - £140m- Managed voice & data

• Abbey National, £125m – Managed voice & data

• Hewden Stuart, Managed desktop

CRM• Capita - £18m, to support

BBC licensing contract

• AXA - virtual call centre at 8 locations

• DWP - £170m, CRM solutions

System Integration• Essex County Council

£164m

• Department of Work & Pensions £140m

• Edinburgh City Council

• Merrill Lynch

Applications Mgt & Hosting• Samsung, 5 years – Hosting

• Central Office of Info, Server

• Police Northern Ireland, Intranet

• Abbey National, £3.2m - Intranet

• Yorks & Humber, £5m - e-Learning

• CGEY, e-Commerce

BT is now delivering 87% of Unilever’s telecommunication services worldwide

• Financial performance on track• 20% global saving to Unilever• Service levels have (in the main) been maintained, improved or established for the first time• Migrated services to BT’s infrastructure (TCO €25.899m)• c. £50m of incremental revenue for BT 03/04• Extranet created - template for future • 4 Remote Ops Centres established • Expanded to boundary - LAN, Firewall• Operational in 104 countries (60 new trading entities established)

Scale: 104 Countries, €20m assets, c.840 existing contracts, c.400 3rd parties c.100 staff, 13 Languages

Facts & Figures

Contract Value: €1bn, 7 years

Scope: PABX, Handsets, Mobile, Dial-up, Fax, Video Conferencing, Calling Cards, Voice & Data, Router mgmt

Asia Pac

NAM

LAM

Europe

AMET

Digital Networked Economy Drivers

•Convergence of IT and Communications markets creating significant business opportunities;

•No single provider can meet all requirements;

•Growing customer demand for seamless end-to-end service, with global reach;

•Strength of leading competitors – need to find differentiation to win the large complex opportunities;

•Growing opportunities for solutions in the Small-Medium and Enterprise market sectors.

BT in the Outsourcing Space

•We have been providing Managed Services since the 1980’s and signed our first outsourcing deal in 1992 with TSB

•We have signed more than 160 outsourcing contracts, with an estimated contract value of over £10 billion

•Our contracts range from Bradford and Bingley, worth £3.75m over 5 years, transferring all existing assets and 3 people transferred, to Unilever worth € 1billion, transfer of €20million of assets and transfer of up to 150 employees

•We partner with other key outsourcers - for Royal Mail we worked in a consortia with CSC and Xansa to deliver the £1.5billion solution, where around 1,700 people were transferred to the 3 partners

•We have provided outsourced operations across the globe, including Asia Pac, the Americas and Europe

•We can deliver the entire breadth of capability in our outsourcing solutions including networks, IT applications, integration, BPO and consulting

Pan-European Network Service Providers: Magic Quadrant

Evaluation Criteria service portfolio and coverage client relationship (support, service & quality) “mind share” and market share pricing corporate viability product strategy marketing and sales strategy business and financial strategy technology strategy operational strategy

BT Global Services at a glance

•We are a £5.8bn division of BT, growing at 7%

•Our ambition is to be recognised internationally as the market leader in: Designing, developing and managing IT and communications systems, including outsourcing and business transformation services

• Focus on European multi-site organisations and Global organisations with European offices

• 21000 people around the world including 8100+ outside the UK and 8000 ICT professionals

• 25 years of experience in providing consultancy advice to a global customer base

Global Services

Products

Carrier

Broadcast

Global Solutions

Consulting & Systems Integration