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Why AI and Agile are at the heart of corporate digital transformation at BT Group - a progress report

Gary Flood Profile picture for user gflood January 29, 2024
For UK telco giant BT, digital transformation equals a combination of Google Cloud Platform, AI, data cleansing, migration from legacy, Agile and extensive digital up-skilling


diginomica recently sat down with BT Group to find out more about the work the organization has been doing to modernize its financial tech estate.

It’s important that this is placed within the context of two years of wider digital transformation at the UK telco, which in its last full financial year it reported revenue of £21 billion, with reported profit before taxation of £1.7 billion.

This digital transformation has an underlying mission to simplify BT customer journeys and experiences through the use of a new digital architecture. Key to this is a five-year partnership, which commenced in March 2022, with Google Cloud. This  includes extensive use of GCP cloud infrastructure, Machine Learning (ML), Artificial Intelligence (AI), data analytics, security, and API management.

Two years on, BT claims that the implementation of this tech means it now can deliver a new retail customer broadband service 40% faster than pre-transformation. It also claims a 50% reduction in the time needed to build new services, as well as boosted overall internal efficiency.

Other already achieved benefits include speeding up of business processes through the use of AI, according to Josie Smith, Chief Architect & CIO Core Platforms at BT Group’s Digital unit.

For example, BT now uses AI models to precisely match contact center agents or sales personnel with individual customers to find solutions to identified problems more efficiently and effectively. In AI terminology, this is known as ‘intelligent pairing.’

Another use of AI is emerging: so-called propensity modeling. This is a way for BT’s business teams to identify the best sales opportunity in the next few years, guiding sales teams on how to have the right conversations at the right time with its customers, the firm hopes.

In fact, BT has previously gone on record to predict it will get at least £500 million eventual value from its use of AI, but now thinks the opportunity could in practice be much greater.

Summing up this first phase of digital transformation at BT, Smith says:

At BT now there is a network hub that deals with the product of our core network technologies, but we do all of BT’s tech now ‘above’ that network layer.

Our vision at BT now is around ‘connecting for good’ and digital plays a critical role in achieving that.

We've told the City that this was a transformation that we want to complete by Financial Year [FY] 27. And I can say that in FY23, we're definitely on track to achieve that.

Unified processes and retail business omni-channel

What BT wants to achieve by 2027, she says, is to provide hyper-personalized services through a truly omni-channel BT interface. That would mean moving away from traditional customer segmentation to increase conversion rates, customer retention and revenue, while hopefully also serving to reduce the telco’s biggest headache - churn:

We need to be able to give BT the answer to questions like, ‘How do we get faster? How do we get faster to market? How do we ensure that our customer experience is good and fast? How can we be sure we're delivering those services and looking after our customers in the most efficient way?’

BT leadership thinks the unit Smith works for, Digital, is the answer. Operational since April 2021, an internal BT Group IT services and Consulting organization is responsible for BT’s digital transformation work. Smith and her team also lead the company’s overall IT, digital, business transformation, and data and product strategy.

Central to this is a full embrace of Agile development,  she says: 

You have to work in agile ways, as you can't have a big, long transformation program that's very waterfall - it just won’t work. So, you must be outcome-focused and constantly check that you are getting towards that outcome. 

You also have to create Agile tribes and squads that have shorter sprint cycles, where you can really build and then measure whether you're getting there. And then you learn from what you've maybe not done or what you need.

The first major challenge of all this Agile teamwork was migration from legacy. This process still has six months to a year to run, Smith estimates. Intriguingly, she says AI is proving very useful in making that happen:

As you do a transformation, any architecture that you put together you must be flexible if you want to change. In the last 12 months, we’ve seen how much AI can help transformation, as you always have to ensure you're scouting ahead and looking at where you could make an even better change.

Smith believes that AI could not have played the role it had if BT hadn’t started with extensive work getting data out of its heritage applications and ready for the cloud:

I don’t think we could have gone at anywhere like the pace we have if we hadn’t done the foundational work that we did with GCP. Getting our data in the right place and well-organized so that we understand the metadata around our data, getting the value out of it has been so important to the transformation Digital’s leading here.

Completing the foundations for the transformation has been extensive training and education, she states—including the rollout of a learning hub available to all BT Group to strengthen their digital skills - Digital Campus. The Campus is central to meeting a target of in-house Digital talent resource of 6,300 people, up from 3,500 in 2022. The majority of this extra talent will be brought on board by April 2024.

Digital transformation is never just a technology story

That emphasis on skills is a reminder that, as important as technology is to what BT Digital is trying to do, it’s not the whole story.

Smith - who has also had technology leadership responsibility at brands like Vodafone and Cable and Wireless - stresses she also must be highly sensitive to the many complex issues around the change management side of such ambitious transformation:

If you want to simplify your products and your processes, you have to have blended teams of both IT and line of business people. A transformation is always a business transformation, not just a technology one.  Yes, it’s about new technologies and slightly different ways of looking at things technically. But it actually must be much more about, ‘What's the problem that we're trying to solve and therefore the tech that's going to help us get there?’

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