Service Management Business Update to CWU

1. Service Management Business Update to CWU

2. Agenda • 1. Business update • Q1 performance • London 2012 • Service Management purpose & journey • Be Smart • 2. Resourcing • 3. People update • CAREagile & OHI • Performance • Absence

3. Service Management Scorecard 2012/13 Objective EOY Forecast Wtg. Detail 134 SM GMC 30% Gross managed Costs- Threshold =Budget +7.5%, Target = Budget, Stretch = Budget – 10% 96.3 SM TLC Total Labour Costs (including BTTC (productive, non-productive & subcon)- Threshold =Budget +7.5%, Target = Budget, Stretch = Budget – 10% 15% 83.4 15% MFU & BTO Drill Down RFT Set of MFU E-E RFT measures where BTO SM handle >60% of the MFU Volume + DD RFT basket for SM. Q1,Q2, Q3 & Q4 all equally weighted at 25% 155 Service & Trading Reliability 15% Service and Trading equal weighting. Q1,Q2, Q3 & Q4 all equally weighted at 25% Basket of Infrastructure and service measure not included in RFT and Reliability (Q1,2,3 4 all equally weighted at 25%) + Operate 2014 Theme A Delivery 15% Service basket of measures 104 100 10% People Enagement improvement (% improvement in SM CAREagile EEI) + 'Transforming performance' as assessed by Group HRD & Operate CEO People SM Q1 Overall 107.65

4. Service Management 12/13 Customer Experience results SI/SM -Drill Down RFT Qtr To date (Scorecard value QTD) Trading Reliability Service Reliability QTD score 174 TGT 100 QTD score 136 TGT 100 Q2 DD RFT -1.45% Service Baskets – (Scorecard value QTD) Key Messages TV & M Q1 +43.57 SM&O Q1 -26.40 GSO Q1 -2.41 (97.59) (143.57) (73.60) • Q1 overall performance is good • Underlying DD RFT performance is improving • Strong Service & Trading Reliability for Q1 continue to deliver into Q2 • Service baskets performance need continued focus into Q2 4

5. Service Management are Key Players in L2012 UKMN (UK Media Network) The UK’s main TV distribution network. carrying Freeview terrestrial channels transmission of live Games action Some of the key services we will be delivering for London 2012 5 1 OBS(L) Olympic Broadcast Services (London) & CATV TVMC will provide a dedicated team to deliver incident management capability into the OBS/IBC 2 BT WIFI SM&O will provide a dedicated team to support BT WiFi in & around the Olympic Park. To deliver incident management capability in the TOC 4 TVOB (Outside Broadcast) TVMC will provide specialised engineering resource, fully accredited, to deliver live coverage from the 5 football Grounds & sailing at Weymouth 3 SM&O – Volume Services Will provide diagnostic support for all 20C& 21CN VOICE and DATA products ( e.g. PSTN, ISDN, HE, PPL, MEAS ) services provided for LOCOG / OLO in and around the venues Global Distribution Distribution of Olympic material globally through both the Global Media Network and Madley Communications Centre 6

6. Service Management Purpose Adopt Best Practice as Standard Rationalise locations OUR PURPOSE “Simplify how we operate to make it easier for our customers to do business with us” Be clear Drive for minimum touch Be Agile Continuously improve Be Transparent Being clear about our purpose and journey Manage knowledge

7. Service Management Journey • Maximize Standardization by July 2013: • Utilizing the Lean Program our people will identify the best way to do things and document these in standard operating procedures • We will have defined standard units of work. quality and task times • We will think e2e but play our positions flawlessly to deliver consistent, efficient and differentiated levels of service (SLA’s and OLA’s) • Make targeted investments to align fewer, better integrated tools underpinned with data that reflects the end to end service • Standardised roles, accountability and decision making Adopt Best Practice as Standard • How we’ll measure • By July 2013 complete the Lean Program in SM, improve level of lean maturity & continuous improvement culture has embedded • Define and compliance to SOPs, SLAs and OLAs • Fewer applications - A single e2e IT solution with Problem, Change, Incident on HPSM • All processes are inventoried and defined in a standard format on the back of LEAN implementation • Define and agree Global Operating model

8. Be Smart : knowing our business inside out/outside in Non-GVF Growth This is a non-GVF driven workstream, and actual volumes and growth over the last 3 months suggests future demand ~6 FTE above TRF3 for 3-6 months to clear backlog GVF Reduction A proportion of the variance shown in the graph to the left is offset by the instigation of e-Chats which avoid fault reports.

9. 12/13 Resourcing challenge • Top down budget to reduce from 1,435 FTE to 1,229 FTE (206 FTE reduction) • Looking to minimise TLR impact via the following • Driving 3rd party vendors for optimal commercial terms • insourcing opportunities e.g. 11 FTE on the Avaya contract re Deutsche Bank • Delivering an Indian Captive proposal to employ BT people in India • Managing vendors to SLA’s and pursuing compensation claims • Reducing the unit cost of FTE via overtime and allowance reviews

10. TVOB Transformation • There is an urgent need to improve our profit margins in Outside Broadcasting if we are to survive in that market and I have therefore asked Joe Barry and his team to undertake a review of TVOB which he will be talking to you about over the coming months. • We are entering a new era operating in a deregulated market where we have strong competition from SIS Live, Geo, Arqiva and other providers. • Our cost base is currently too high and as a result EBITDA is too low to survive against competition, and to retain long term MFU interest in delivering OB. • Our people do a great job, but as a business we are fundamentally inefficient and must address our high cost base and low employee utilisation levels.

11. Focus on leadership making the difference Thinking about the art of the possible rather than being constrained by “can’t”. Shedding ‘the baggage’ by letting go of the history Driving an improvement ethic so continuous improvement becomes how business gets done Being willing to be brave & have the courage to do the right thing Operating transparently - sharing information & knowledge & exposing problems/vulnerabilities so they can be addressed Collaborating & looking outside of your silos Being proactive and embracing change Being genuine & having authentic & honest conversations Having high standards & being challenging as well as supportive. Not avoiding tackling issues Delivering performance (results) and demonstrating the right approach (how) This is OUR challenge this year

12. Bringing People with Us • Great progress last year with Quarterly improvements • Especially in Senior Leadership measures – visibility, comfortable to approach, and SMP • Decline in Q2 in key measures, accompanied with increase in B&H - under review • Working to democratise communications and engagement e.g. IM Hour, invite employees into team meetings

13. Sick Absence / Stress General trend of number of absences in a month is decreasing 3.4% of all recorded absences are related to Stress / Anxiety / Mental Health

14. Questions Questions?