1. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 1/17 The case shows that RPA can deliver faster and more accurate performance of routine back-office processes, and annual returns on investment of up to 200%. But as with all technology innovations, organizations must assess RPA’s capabilities and manage its adoption to achieve maximum results

2. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 2/17 Agenda  A New Breed of Software  Robotic Process Automation Vs. Business Process Automation  Pioneering RPA  RPA Action Principles

3. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 3/17 A New Breed of Software 1/3  “Robotic Process Automation is the next wave of innovation, which will change outsourcing. We already are seeing the beginnings of a race to become the top automation-enabled service provider in the industry. In time, we are likely to see an arms-race for innovation in automation tools leading to new offerings and delivery models.” Sarah Burnett Vice President of Research, Everest Group

4. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 4/17 A New Breed of Software 2/3  The new breed of RPA software providers includes Blue Prism, Automation Anywhere, IPsoft and UiPath.  “Robot” is equivalent to one software license.  RPA software is ideally suited to replace humans who perform so-called “swivel chair” processes. Such a process is where a human sits in a swivel chair at a workstation and takes in work from many electronic inputs, processes it using rules, adds data and then inputs the completed work to an ERP or CRM system.

5. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 5/17 A New Breed of Software 3/3

6. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 6/17 Agenda  A New Breed of Software  Robotic Process Automation Vs. Business Process Automation  Pioneering RPA  RPA Action Principles

7. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 7/17  “We’ve been automating business processes for years with business process management (BPM) solutions.”  What is different?  RPA is Relatively Easy to Configure; Developers Don’t Need Programming Skills  RPA is “Lightweight” IT That Does Not Disturb Underlying Computer Systems Robotic Process Automation Vs. Business Process Automation AttributeBPMRPA Business goalReengineer processesAutomate existing processes Technical outcomeCreate a new applicationUse existing applications Integration methodAccess business logic layer Access the presentation layer of existing applications DevelopersSoftware developersBusiness operations Testing requirementsSystem testingOutput verification

8. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 8/17 User Interfaces for RPA Software

9. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 9/17 RPA as “Lightweight IT”

10. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 10/17 RPA Complements BPM

11. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 11/17 Agenda  A New Breed of Software  Robotic Process Automation Vs. Business Process Automation  Pioneering RPA  RPA Action Principles

12. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 12/17 O 2 - Overview  O 2 is the second-largest mobile telecoms provider in the U.K.  O 2 began life in 1985 as Cellnet, a venture launched by BT Group and Securicor.  Like other telecoms companies, utilities, banks, insurance companies and large retailers, O 2 has a huge number of customers, and multiple large-scale back- office processes.  As of 2015, O 2 had 24 million customers,operated over 450 retail stores and employed 21,580 people.  O 2 ’s back-office processes needed to scale up to match business growth while keeping costs low to thrive in the highly competitive mobile communications market.

13. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 13/17 Pioneering RPA  In April 2015, O2 deployed over 160 “robots”  process between 400,000 and 500,000 transactions each month,  yielding a three-year return on investment of between 650% and 800%  For some processes, RPA reduced the turnaround time from days to minutes. Number of processes automated Number of RPA transactions per month Number of robots (i.e., software licenses) Number of FTEs saved or redeployed Payback PeriodThree-Year ROI 15 core processes400,000 to 500,000>160 and growingHundreds12 months Between 650% and 800%

14. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 14/17 How O 2 achieved these outcomes?  Transforming and Rationalizing Back-office Processes  “Low cost wasn’t so low anymore.”  RPA Proof-of-Concept (pilots)  Will RPA integrate with O 2 ’s systems of record without breaking them?  Will RPA technology provide quality services?  Will the technology provide enough of a return on investment?  RPA Rollout  The Future of RPA at O 2

15. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 15/17 Agenda  A New Breed of Software  Robotic Process Automation Vs. Business Process Automation  Pioneering RPA  RPA Action Principles

16. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 16/17 RPA Action Principles  Test RPA Capabilities with a Controlled Experiment  Develop Criteria for Determining Which Processes Can Be Automated  Bring IT Onboard Early  Communicate the Intended Effect on Jobs Early in the Process  Exploit New Automation Sourcing Options “Optimization of virtualization in the run time environment matters. Poor optimization can make robots slower than people.”

17. Robotic Process Automation at Telefónica O 2 Lacity & Willcocks – March 2016 Page 17/17 Assessment of RPA Suitability