Taking a Closer Look: Excerpts from Interviews with Sandy Khanna of BT Group
December 6, 2018
At the first two London HFS FORA Leadership Council Roundtables, Steve Dunkerley conducted video interviews with Sandy Khanna, Managing Director of BT Group Business Services. One interview focused on the BT Group Business Services operating model and the extent to which the company is aspiring toward a Digital OneOffice. The other focused on Intelligent Automation and where BT Group Business Services fits in the HFS Intelligent Automation Maturity Model. The following outlines some of the take-aways from these interviews and what Sandy thinks about the HFS Digital OneOffice Framework.
Watch both videos and read the top take-aways below:
From poacher to game-keeper
2018 has been a big year for Sandy Khanna. After 29 years of being part of the same team—initially with PwC and then IBM (when IBM acquired the consulting arm of PWC for $3.5 billion in 2002), he made the brave move from the sell side, where he was a BPO leader responsible for global blue-chip clients, to the buy side by joining BT Group Business Services as its managing director. “I have never worked in industry, and it’s something that I really wanted to do. You’re standing on your own two feet and are accountable for the execution. This is something that I wanted to add to my resume and skill set,” he explained.
He pointed to several similarities and differences between the sell side and buy side and emphasizes “relationships” as a key common denominator. “People are absolutely at the heart of everything I did as an outsource provider and are equally, if not more so, at the heart of everything I need to do here in setting up a Group Business Services organization. I have three types of customers to look after—internal and external customers and my 10,000 employees.”
He also mentioned the importance of robust governance structures for both BPO and captive organizations, but he noted that his new role has more accountability for executing and transforming operations than his previous role had. “The buck stops with me at BT. I set the vision and strategy, and I am accountable for executing it. Whatever we do as a provider of services, GBS needs to be intimately and inextricably linked to the business strategy, and you have to add value from day one.”
Steve Dunkerley: How has the operating model of BT Group Business Services evolved in recent times?
Sandy Khanna: BT Group Business Services has been on a four-phase journey toward shared services. Between 2008 and 2010, we took transactional activities from the UK and moved them to a low-cost economy to take advantage of labor arbitrage. You could say that was tactical lift and shift, but it served the purpose, which was to realize some immediate cost savings. As the shared services organization started to settle down and deliver value back to our customers, we went through a phase from 2012 to 2015 during which we aggressively started to move large-scale operational activities out to a number of centers around the world. India was our global hub and we added Budapest for European language and fiscal and statutory activities.
After this consolidation of activities, the third phase was a moment of reflection. We started to sit back and think about exactly what we want to be when we grow up. GBS, as a model, had started to evolve; digitalization, new enabling tools, and new technologies were emerging. I think it’s fair to say we took a bit of a pause from 2015 to 2017 to stabilize and then reflect upon the direction we wanted to head. We’ve just agreed on our new strategy for the next phase of our evolution, so for the next three years, we’ve created a transformation roadmap to transform our functional activities into an integrated, end-to-end process environment. We will be leveraging a whole bunch of enabling tools and technologies and driving extreme automation, but that will only happen once we get our processes harmonized on an end-to-end basis. We’ve evolved over the last 10 years, and I think the next three to five years will be quite pivotal for us and that we will be able to add real value to our customers.
Steve Dunkerley: How far away is BT GBS from achieving a Digital OneOffice and what work is there to be done?
Exhibit 1: The HFS Digital OneOffice Framework
Source: HFS Research, 2018
Sandy Khanna: BT Group Business Services is only just beginning to get its mind around what the OneOffice concept is. Some of the foundations that you expect to be in place are there, but I think it is fair to say that we have only started on that journey. What does OneOffice mean in our environment? I think it is important to understand that because the framework within which we operate is different from the framework in other organizations. We can define our OneOffice environment as a digitally enabled, frictionless, consumable experience for our external and internal customers and employees—they are all equally important. In their personal lives, they are all used to an easy digital experience, whether it’s with Amazon, Uber, or Airbnb– it’s a digital journey end to end.
I think we’ve got some of those building blocks in place. We’re investing in process redesign using Lean and Six Sigma. We’re about to aggressively move in that direction. We have quick automation up and running. We’re going to move toward large-scale RPA in the coming 6 to 12 months. We’re relatively immature on that journey. But, more than that—it’s around a cultural mindset and ensuring we have the types of skills and capabilities that will help us evolve toward a OneOffice environment. We’re just beginning the cultural change required to create that seamless experience. If the goal is to increase value—cost value, customer experience value, employee value—everything needs to come together. For that to happen, I think the OneOffice framework is going to be very important to us.
Steve Dunkerley: Which emerging technologies are helping BT GBS achieve its OneOffice ambition?
Sandy Khanna: Like most shared services organizations, BT Group Business Services really leverages the technologies that our customers have in system stacks—whether that’s accounting systems, HR systems, or procurement platforms—all the core operational systems that our businesses across BT operate. What we’re doing quite effectively now is wrapping these operational systems with enabling tools and technologies that will allow us to create seamless, end-to-end customer journeys. Naturally, we’re using workflows, screen-scraper technologies, and quick automation tools, but we’ve also started to penetrate certain standardized processes with proper RPA tools. It doesn’t matter what the brand is, as long as you have the right RPA tool, you can make things work. But we are being very careful. We don’t want to automate a bad process. Some of it you must do tactically – to get you across the line. Before we automate legacy processes, we consider that we would much rather digitize and automate true end-to-end processes. As time goes on, we will definitely move into the cognitive era. Whilst we have analytics and some predictive analytics capabilities that are relatively nascent—we need to invest quite significantly to get us to the next stage. I think that considering IoT and machine learning is somewhere in the distance. We need to get our foundations right first.
Steve Dunkerley: Based on the HFS Intelligent Automation Maturity model, where does BT Group Business Services rank and why?
Sandy Khanna: BT Group Business Services ranks within the experimenter and tinkerer quadrants. We’ve been on that journey for a while—a relatively recent journey, to be fair. And whilst we have pockets of movement up the curve, we’re still in that foundational stage for group business services.
Steve Dunkerley: How representative is this level of maturity consistent with other shared services and GBS organizations?
Sandy Khanna: I think BT Group Business Services is a little bit behind the curve compared to organizations I’ve been involved with – be it as a practitioner, consultant, or outsourced partner. We have been able to see maturity from quick automation into process improvement and process excellence and data analytics, which then helps form views on where you ought to focus for RPA. We have some great examples of RPA, but to be able to create that at industrial scale, we need to rethink our strategy. That’s the process we’re going through at the moment.
Steve Dunkerley: How excited are you about the potential of intelligent automation for BT Group Business Services?
Sandy Khanna: I’m hugely excited, and the reason is simple. We’ve always focused on efficiency and the cost curve. Although that focus is an absolute imperative for every organization, I think the value area—where we can truly drive business value, not just cost value—is something that excites me immensely. If you aren’t thinking about the entire end-to-end customer journey, I think you’re going to miss something. The opportunity to look at that entire end-to-end digital journey from a customer’s perspective really does excite me because that’s how an organization can differentiate itself in the marketplace—both with its customers and its employees—because happy employees will ultimately lead to excellent customer service.
Steve Dunkerley: How is BT GBS looking to increase its intelligent automation maturity?
Sandy Khanna: We’re having a bit of a reset. I’ve hired a Director of Automation and Process Improvement—an industry leader. I did this because based on the journey that BT has been on within my area, we wanted to reconsider our approach to quick automation and rethink our process improvement and process excellence approach. We have relatively little analytics, predictive analytics, and data insight activities. Before throwing money and resource at the RPA question—I think that if you haven’t got those foundations right, you could misfire. So that’s what we are doing; we are resetting our strategy. We are going to create a global hub-and-spoke model. In fact, we’ve already announced a global presence in India. We’re creating a hub in Kuala Lumpur, one in Budapest, and we’ll also have some activity in the UK for the processes that we deliver out of our various UK sites.
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