BT's Journey So Far - IQPC.com

BT’s eStory and the BT Chorus Programme
Finance & Procurement Transformation and opportunities
Dave Meadmore
Lead for Order to Invoice
BT Procurement

Agenda
• BT’s eStory
• BT is changing
• BT Chorus Programme
• Progress to date
• Key points

Total Global External Spend = £13.399bn
(UK- £10.520bn & Global- £2.879bn)
Procurement/Contracted = £8.644bn
Interconnect= £3.669bn
Specialised Sites= £1.086bn

BT’s eStory P&SC – Our Vision Strategy
• Single Purchasing portal
• Visibility of commitment as well as spend
• Appropriate Approval and Control
• Richer supply chain (order status, receipt etc)
• Lower invoice costs
• Accurate allocation of expenditure
• Cost reduction in Supply Base

Purchasing BT’s eStory Online – 1995 - 5 to Key 2004 Stages
• Stage 1 - Simplify & Consolidate
• Stage 2 - eEnablement of High Transactional Volumes
• Stage 3 - Drive up eUtilisation
• Stage 4 - High Value Commodities
• Stage 5 - Channel rationalisation
• Stage 6 - Richer supply chain with Supplier

Type of Order Channels Lessons Created Learned
• Travel applications for Flights, Hotels, Hire Car and Rail tickets
• Online ordering of Stationery and other corporate services
• Development of “Best in Class” channels such as CAMERA
Marketing and its clone CAMERA Consultancy
• Lines of Business (LoBs) developed their own channels that have
other integrated processes such as planning built in.
• iProcurement used for all other products and services

Simplifying the User Interface
Gatekeeper
Sign Gate
Keeper On
Purchasing
Online
Commodity
selection
• single sign on
• controlled access
• no more system acronyms

Transparency of purchasing channels
Selection is by commodity
name
Channel transparent to end
user
Controlled ordering channels

Where a commodity specific channel didn’t exist we used
Oracle iProcurement

Accessing Travel Applications
Using Supplier Sites

Stage eStory 4: High - Achievements
value commodities
• 52% of P&SC procurement spend was via a recognised order channel by
March 2002
• 77.1 % at March 2003
• 85% of our spend through recognised order channels by March 2004
• In excess of 99.5% spend via recognised channels by 2005
• 97% of High Volume Commodities eEnabled with 98% eUtilisation
• Removed orders via Phone, Fax and Personal Email.
• Introduction of NO PO NO PAY if not on an agreed channel

• Cost effective
– Around £120k a year to provide and support
– Over £1.1bn has passed through this system over its life
• Intuitive
Why is CAMERA Marketing considered “Best Lessons in Class” Learned
– Takes an end user through the process
– Its in the language of the user community
– Reflects the commodity/industry being purchased
• Additional functionality
– Collaborative environment,
– Allows for RFQ and responses
– Supplier access via the internet
– Electronic invoicing
– Acts as a library of all campaigns including TV ads

Lessons Learned
Why have some of the Corporate services commodity specific
channels been so successful?
• Cost effective
• Intuitive
– Reflect the commodity being purchased
• Ease of use
– User hidden from accounting or budget allocation issues
– No approvals (travel retrospective via expenses)
– Single sign-on – no user IDs and passwords to remember
– No or little training material required

Lessons Learned
The down side?
• UK centric
• We could not sustain separate order channels for every commodity
• No common trading interface or process with our suppliers
• No visibility of spend until Accounts Payable
• Mixture of technologies and approaches
• Issues if we wanted to change out a supplier

BT is now under continuous transformation
Lessons Learned
• BT now operates in 176 countries
• 20% of the workforce now outside the UK
• BT Global Services signed up 136 new corporate customers outside
the UK in the last quarter of 07/08
• BT has acquired 19 companies in the last year.
• BT workforce in Asia has increased by 30%
• BT workforce in Americas up 45%

Our business challenges
• The ability to become more agile
• Constant internal business change
• Support global contract wins
• To have an end to end view of BT’s performance
• To have an holistic view of supplier spend
…. challenges facing BT are commercial, economic and
operational

Our position was not world class
• A stable organisational model
• Multiple processes
• Multiple data sources
• 400+ separate systems
• 30+ instances of Oracle alone
• 33 chart of accounts

What we want to achieve
• Standardised business processes by LoB and move towards
pan BT processes
• Common group wide definitions and understanding of all key
standing data
…. supported by a simplified and centralised technical
infrastructure

What does Chorus mean for Procurement?
One System Platform & One Procurement Process
One Data
Source
One Electronic
Supplier
Interface
Common
Order Channel
Visibility Compliance Control
Enabling BT People to do the right thing
Profitability & Cash Flow = Competitive Advantage

Key enabler - Global Vendor Data Master (VDM)
• a unique global reference for each legal entity including:
– consistent supplier naming
– recording of external references such as company, Dunn &
Bradstreet etc.
– hierarchical linkage between Vendors and their subsidiaries
– hierarchical linkage between Vendors and their distributors via
Contract Agreement and Supplier site
• a single One BT Supplier registration and creation process
• BT Group wide vendor reference source
– ERP platforms
– ASC and other systems
– consolidated Procurement MIS

Key enabler - Standard Functionality, Configuration, and
Customisation
• Common implementation to agreed design unless there are legal or regulatory
requirements
• Vanilla ‘Oracle’ does not mean no custom code
• Custom code only needed for things like:
• Interfaces with legacy (e.g. invoicing) or external (e.g. banking)
systems
• Workflows (e.g. for account generation or approval hierarchy routing)
• Reports
• Additional data (e.g. flexfields in Oracle or external databases)
• Intrusive customisations to be avoided completely
• Oracle Corp. provides guidelines for development of custom code to ensure
support arrangements are not compromised.
• Signoff by senior stakeholders within the business

We are basing our implementation on the ORACLE eBusiness
Suite 5.10 and Procurement will use new modules to enhance
their processes
Rich content, navigation and
service forms
Replaces Purchasing On-Line
even for services fulfilled
outside ORACLE
Contracts integrated directly with
Purchasing. ensuring compliance
Contract
Management
Payables
BT Group
Payment
Policy
iProcurement
Workflow
Approvals
Purchasing
iSupplier
Web based
supplier
interface to
Sourcing,
Orders,
Invoicing &
Payments
Consistent Approvals
and Control
Procurement
involvement where
required
Sourcing
Single platform for all
RFI, RFQ, Tender and
Auctions
B2B Interface
Single Supplier B2B
and improved ROI
based on open
standards

UK Approach
(Running on BT servers)
Other order
channels
Single iSupplier
for our UK
Suppliers
WH
EQ1
iSupplier
Purchasing
Link for UK on
BT Home Page
iBuy
EQ2
(Fleet,
Openreach
& Rest)
BT1P
EQ1
Single MIS
All UK P2P Order
to Invoice in one
place
SOLUTIONS
EQ1
Punch-out
to Supplier
site if
required
AP transactions
passed to
account ledgers
on existing
installs
UK&I
BT Design
BT Operate
BT Wholesale Markets

Proposed P2P Platform Roadmap
November
2006
Spring
2007
Summer
2007
Winter 2007 Spring 2008
08/09
Close 10.7
Invoicing
via EQ 2
Close 10.7
Invoicing
via EQ 2
Close Some UK
Order Channels
Close UK
Equinox
iProc
Agreed
Global Design
iBuy/EQ 2 (BT servers)
Contracts &
Sourcing
introduced
Asia PAC
GFP (ORACLE On-Demand)
Europe
5 Live Delphi
stabilised
on 5.10
Nordics
& Switzerland
Netherlands
US Reston
and Americas
(91 legal
entities)
Global Design
aspects
reflected
in GFP
Infonet,
Italy & Spain

Using Supplier Sites
Demo Videos
Car Hire
Punch-out

iProcurement Content
iProc homepage
‘Purchasing Online’
‘Stores’ created for ALL major
categories of spend and direct
users to the appropriate
channel/content
Catalogues
Commodity
Forms
Informational
Catalogues
•Individual goods/services
held internally with fixed
prices
•Items held externally by
supplier and accessed
through punchouts
• Request Forms created for
each type of spend to direct
users to the relevant
supplier/contracts
•Information templates used to
capture additional information
•Links provided to external
channels for all types of
expenditure not purchased
through iProcurement

Procurement Approval.
(by exception)
Finance
Procurement Authority
Cost Centre
Approvals
Procurement Compliance
(above £ x Value)
New Supplier
Self Approval
Project
Approvals
Off Contract
(above y Value)
• Procurement Authority
Finance
– Individual specified against a specific contract can
be included at the END of the approval process
– All non-contract purchases over a specified value
(by category) routed to a procurement individual for
approval
– Process to enable procurement validation of
contract terms etc. and provide formal authority to
proceed
• Procurement Compliance
– Individual specified against a category of spend or
supplier site who can be included at the START of
the approval process. E.g. validating correct
channel/supplier/contract used
• New Supplier
– Individual in procurement required to approve all
new supplier purchases (specified by category)

Progress to date
• December 2006 – European countries re-stabilised on the new
ORACLE 5.10 software
• April 2007 - Global VDM created across BT
• 07/08 Contract register and Sourcing modules rolled out across
Procurement (mandatory except for eAuctions now via Ariba).
• December 07 – Netherlands transferred to GFP
• January 08 – US Reston managed entities transfer (91 legal entities
all around the world).
• May 2008 – UK Lobs transferred to iBuy
• Preparation being made for our US company Infonet to go live
August 2008 (6 legal entities)
• Preparation underway to implement Global design aspects on GFP
• Reusable component being developed to speed up the transfer of a
legal entity to GFP which can be repeated as required.
• Feasibility studies for Spain and Italy.

Key points
• Sizeable implementation stages that can be fully
monitored and delivered
• Agreed Global Design so that all business issues are
resolved in advance and we don’t delayed due to local
practice or requirements
• Keeping to Vanilla and restricting requests for
enhancements.
• Prioritise commodities keeping existing processes if
they are working

BT’s eStory and the BT Chorus Programme
Finance & Procurement Transformation and opportunities
Dave Meadmore
Lead for Order to Invoice
BT Procurement