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    Achieve competitive advantage through cost leadership   

Our focus on continued operational efficiencies helped reduce overall group operating costs before goodwill amortisation and exceptional items by £348 million in the 2004 financial year. Some of the savings in traditional activities have been re-invested in growing new wave activities.
     Looking forward, we have identified additional efficiency savings of over £1 billion which we aim to achieve over the next three years by focusing on reducing the costs of failure, complexity and duplication and by working smarter. For example, we will continue to use new technology to develop more cost-effective relationships with our customers.
blue square As at 31 March 2004, we had a total of 4.4 million online relationships with customers (via bt.com) and 1.2 million customers receiving e-bills.
blue square During the 2004 financial year, we completed our Next Generation Contact Centre programme, having achieved our three-year target of £150 million annual savings by 31 March 2004. (The reduction in the 2004 financial year was £63.6 million). We also invested 1.5 million hours in training contact centre people and continued to rationalise the number of sites – down from 104 to 41 in the last three financial years. We invested £45 million in upgrading environmental standards and deploying new systems and technology.
      We are driving for cost leadership within the telecoms industry. Although we currently benchmark well against many other large European telecommunications companies, we remain less efficient than the best in class in our industry. We aim to narrow that gap significantly over the next three years.
 

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