Outsourcing Status Report 17/6/96


Consideration of the Telstra (Dilution of Public Ownership) Bill 1996
CONTENTS

Table 5.6

Outsourcing Status Report 17/6/96

Functional Area Priority Group Total Staff Involved Improve Staff/Line Benchmark Potential Expense/ Financial Impact IR Impact Progress Comments
1. AREAS REVIEWED
Fleet   250   Not core.Low costs impact, but release $650M assets. $170M pa capital. Medium to High Hambros engaged to recommend approach by 12/7/96. Reported to MSG 22/5/96. Managed by Shane Allan.
Visionstream   2000   Not core.Est saving $50M pa (2yrs)$30M closedown.Release $70M capital Low For MSG discussion 17/6/96 Reported to MSG 22/5/96. Action to be determined by Shane Allan
Properties   230 CPS296 NTG   Not core.Difficult to estimate $ impact.Current direct expenses;CPS $485M paNTG $140M pa Medium Cleaning and security now being outsourced. Other property functions to be examined. Sale/leaseback of properties being addressed separately Report to MSG 3/6/96. Actively managed by Shane Allan.
EPS   410   Not core.Low, financial impact. Medium Mftg. And design impacted by 96/7 Plan. Scoped by Shane Allan/David Pitt. Summary report available for MSG on 17/6/96.
Functional Area Priority Group Total Staff Involved Improve Staff/Line Benchmark Potential Expense/ Financial Impact IR Impact Progress Comments
2.SCOPING - PROJECTS UNDERWAY
C&C Pit & Pipe   Approx. 1300   Not core.To be determined.Capital spend approx. $100M pa. High Depending on Methodology Line management actively involved, links to ND&C Summary report available for MSG on 17/6/96. Managed by Roger Bamber
Telstra Shops   850   Current EBIT TMP +$12M C&C - $20M T.B.D. Decision whether to outsource by Dec 96. Summary report to MSG on 22/5/96.Ian Shiers - current focus is on making shops profitable. Alternative actions may be considered.
CPE   2100+   EBITPhone rental - $169M SBS & BABX - $25MConsumer prods - $1M Likely high Rental phone aptions tbeing explored. SBS, PABX and consumer products decision by Sept 96. Summary report to MSG on 22/5/96.Actively managed by Chris Wilkinson.
Broadcasting   254 (144 post 96/97 Plan)   Non-core.Potential for stranded costs as order book declines Low Staff are being absorbed into NTG and B&G Discussed with MSGM on 22/5/96. Outsourcing being pursued; staff are absorbed into other areas.
TAT   500 (300 on Defence)   Core/Non core elements to be identified. Valuation being established. Low Defence, Non defence and Telstar Systems to be treated separately Being managed by Lindsay Yelland. Project Manager to be appointed.Reported to MSG on 22/5/96.
ISSCA (Alliance/ partnership)   Up to 2100 staff 1200 cont.   Est $500M NPV savings Medium Due dilligence in progress Reported to MSG on 22/5/96. Project is tightly managed with explicit top management attention.
Functional Area Priority Group Total Staff Involved Improve Staff/Line Benchmark Potential Expense/ Financial Impact IR Impact Progress Comments
ND&C Field Force   6000 staff   T.B.D. High Refer R. Pentecost initiatives. R Pentecost reporting separately.
3. OTHER AREAS TO BE REVIEWED
Warehouse/ Distribution   350   Not scoped High   David Pitt to scope.
Accounts Receivable   170   Not scoped Low Scoping to commence 1/7/96. David Pitt to scope.
QPSX   60   Not scoped Low To be linked with EP&S Review David Pitt to scope.
OAS   3500   Not scoped High   Shane Allan to review.
Training   800   Not scoped Medium   David Pitt to scope.
CSC/NTC   7950   Not scoped Medium   To be discussed with P Shore.