SA Reorganisation –Building a new organisation CWU Executive Briefing 10 th March 2011

1. SA Reorganisation –Building a new organisationCWU Executive Briefing10th March 2011 1

2. Why is this needed? – our Vision • Competitive - An organisation that helps us to deliver the cost to serve and quality of service that enables the MFUs to compete effectively • Converged Operations – maintain operational convergence between IT and networks • Transparent - Creating visibility and transparency in our resources and processes, so that we can continuously improve, make the right kind of business and service level support investment decisions, and demonstrate value for money • Authority to deliver for the customer - increased customer focus, with clear ownership around the interfaces, supported by a RACI; enabling executives to lead with greater focus, and delegated authority to the lowest level, to ensure a better delivery to our customers.  • Accountability – span of control enabling faster, more aligned decision making, and accountability

3. Design Principles • Customer Focus • Demonstrating greater alignment and execution to support the MFU’s. • Visible changes around the high volume, primary transactions they have with us • MDSO relationship maintained and enhanced. • Minimising hand offs • Key processes streamlined and simplified • reducing the number of interfaces between the customer and getting something resolved • Protect investment in transformation • a good transformational plan for SA, blueprint and roadmap • Deliver on the defined vision for Service Assurance • Don’t break service • Do not create any new gaps in processes and resolve existing ones, to ensure non customer impacting. • Implementation Consideration • Change and refine • Move some building blocks with possible additional moves transitioning over 1 or 2 quarters

4. General Principles applying to both units Customer Centric Services • Develop a cultural shift in our ways of working that predicts and pre-empts, driven by a proactive behaviour focused on maximising the availability of our services to customers. • All products/services to meet operational and CE criteria • Use scorecards to align vertically into the customer layer and horizontally across SA functions to achieve common execution and operational goals • Define OM roadmap to move from today to target, and ensure all risks to CE are 100% mitigated • Overall design of 99.9% availability minimum • Clarify accountability for delivery to customers Culture and Organisation • The organisational build is consistent with the Operating Model design, optimised and flat • Must be supportable to ITIL/ISO methods and standards • Focus people development around the service culture with true personal accountability – customer and service driven • Shift in resources from reactive to proactive/pre-emptive. Process & Performance • Standardised processes with full and predictive management controls • Single data model relating service and technology • Leverage reuse of existing capabilities • Use new converged processes and strategic systems to rationalise systems • Reuse of components and infrastructure capability is prime requirement • Reduce number of hand-offs in large volume interactions e.g. client communication on MSO, forecasting new requirements • Shift process outcome to 70% proactive, 30% pre-emptive • Provide reduction major incidents and reductions in reactive incidents for standard services • Provide brenchmarkable value for money • Eradicate non productive work being issued • Clear view of performance by service/customer • CE, RFT and CT targets are key outcomes • Simplify the trading model (cost allocation for shared services and direct costs to LOBs) • Designed to be scalable,

5. What is the focus of each unit? Services Infrastructure • Provides mass market, customised and bespoke support for end user services • Services BTs portfolio, providing customer segmented operations to meet the CE and dynamic performance needs • Provides 2nd line for products and service based applications • Availability and reliability sufficient to support a content and TV world • Specific capabilities for specific MFU market segments (Voice, Broadband TV, SME ICT, WIFI, etc.). • Technical capabilities and support for new-generation products (Super Fast Broadband, Ethernet, etc.). • Clean introduction of new services and contracts with a low cost of operability. • Owns and operates BT’s Business and network infrastructure. • BTs IT, Global networks and operational infrastructure. • Manages the oss platforms and componants that provides BT’s and industry with the infrastructure to manage the complex set of layered telco services that flow over, integration and consume shared technical services. • Defined with in a set of catalogued services along with a set of defined shared service capabilities. • A global network operation, with particular focus on UK • Focus on prevention and not cure • Availability and reliability sufficient to support a content and TV world • Robust forecasting and capacity management • Operational excellence, in particular for 21CN, through a high-performance, collaborative and customer-centric culture.

6. Operating Model Review (What is the potential split?) BT Service Management MFU SD’s (3) CSOCs Incl SM (687) BTGS SO (433) TV & Media (240) Major Incident Management Business Management (16) Production management Service Management Inventory Component & Service Change Management Change Mgt (34) Service Assurance Transformation (63) Joint Transition Centre (138) Service Infrastructure 20C IP networks Camb + Adhara (122) A2T (1) El Segundo CEMC (73) Business Management (16) ASG (3254) DC Infrastructure (1581) Olympics (21) Major Incident (54) Net Infrastructure (947 inc Voip) Asset Mgt (19) 6 * Note FTE Numbers are indicative only

7. Service Management org – 1/4/11 Gareth Williams HR

8. Service Infrastructure org – 1/4/11 Gareth Williams HR

9. What you can expect from our Leadership Teams in Service Management & Service Infrastructure: Keep you informed - regular updates Be honest and tell you as it is Work as quickly as we can Continue to develop further our detailed plans Keep people informed on progress Managing change…together In Strictest Confidence

10. What happens next Next steps: 15 March onwards ongoing engagement with CWU on roll out of SI methodology End of May arrange Exec Briefings with Leigh B & Dana C to review progress on embedding SI & SM businesses End of June provide quarterly MD business unit briefings to CWU Executive Arrange ad hoc meetings as and when required In Strictest Confidence