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Write a SUMMARY Report for O2 and RPA Case:

O2 started in 1985 as Cellnet and has now grown to become the telecom provider with the broadest coverage in the United Kingdom. It was bought in 2005 by Spain’s Telefonica. Its back-office transformation began in 2004 when it engaged an Indian Business Process Outsourcing (BPO) provider to realize back-office cost savings. As the volume of offshore transactions rose, so did the number of FTEs in India—from 200 in 2005 to 375 five years later. At the same time, the provider’s head- count in the United Kingdom dropped from 98 to 50 as the provider sought to cut back on its most expensive labor costs. In another cost-cutting purge, O2 eliminated nonvalue adding processing and optimized its 60 core back-office processes. O2 started looking for a better way to get a handle on its back-office processes. Robotic Process Automation (RPA) offered some promise here.

In 2010, the head of O2’s back-office services, Wayne Butterfield, started a two-year proof-of- concept initiative with two pilot tests of RPA using Blue Prism software. The first pilot swapped a customer’s existing SIM with a new one while keeping the same phone number. The second process applied a precalculated credit to a customer’s account. Both pilots were configured by Blue Prism consultants on site and were complete in two weeks. They both worked seamlessly with O2’s systems. In fact, one worked so well that Butterfield was called in to answer to O2’s Security and Fraud division to explain why so many transactions were being completed in such a short period of time.

Butterfield purposely had not told the Security and Fraud division about the two pilots. He also had not communicated with the IT department because he was concerned that they would object to acquiring additional software (Blue Prism). In fact, the IT department had already developed negative feelings about RPA. Feathers were smoothed when the IT department was asked to build identical systems using BPM as proof-of-concept. The IT developers and scrum teams built the pilots in three weeks each, but at substantially greater cost because of IT labor. Using the results of the two pilot tests, Butterfield built three-year business cases for RPA: 1. Using BPM and the IT department, there would be an estimated zero net financial benefit while with RPA there would be a million £ ($1.4 million) benefit. 2. O2 selected RPA for automating routine back-office processes.

O2 issued a Request for Proposal to initiate a formal RPA vendor search and the IT department verified that Blue Prism offered the best proposal. O2 asked its Indian-based BPO to take on the RPA work. Recognizing that the BPO made its money on headcount—and that its headcount would be drastically reduced—O2 tried to sweeten the offer. However, after a six-month review by the BPO, the BPO declined the offer without any official reason. (The BPO continues to deliver O2’s non-automated back-office processes, e-mail and web chat services with a total of approximately 900 FTEs in 2015.) O2 sent its back-office staff to Blue Prism. Using only four people, O2 has now deployed over 160 software bots, which process between 400,000 and 500,000 transactions each month. This translates into a three-year return on investment of over 650% with a payback period of 12 months.