Smarter Planet Perspectives IBM Transformation: Building an Infrastructure to Support a Globally Integrated Enterprise

Smarter Planet Perspectives

IBM Transformation: Building an Infrastructure to Support a Globally Integrated Enterprise

Kathy Colucci Vice President, Sales Enterprise Processes IBM Mary Garrett Vice President, Marketing and Communications, Global Sales and Distribution IBM Linda Sanford Senior Vice President, Enterprise Transformation IBM Pat Toole Vice President and Chief Information Officer IBM

Shared Services, GISPs and IOMs play a critical role in achieving our 2015 roadmap objectives

End-to-End Process Shared Services Integrated Operations Transformation

Hardware Product Management . DeliverHuman Shared Resources Service . Enable revenue via sales and . Draw Businesson significant Operations synergies Transformation in-a-box for accelerated business partner productivity in our worldwide process, growth marketFinance expansion and supportingIncentives GMU skills,Center-Based and assets Operations to drive expansion integration . Optimize our Centers of Global Sales Operations Order-to-Cash Global Client Centers Excellence through an . Reduce portfolio complexity . Optimize productivity through enhanced location and and optimize software, smarter technology including Integrated Supply Chain consolidation strategy hardwareOpportunity-to-Order and labor spend AnalyticsSales Management and Cloud and Support Service Labor Management . RadicallyReal Estatesimplify Operations with a focus . Deliver expense savings . AccelerateDevelopment globalization of Transformation on work prioritization and through horizontal integration leadership and functions elimination Legal andService operational Product efficiencies Management Transformation

Information Technology Business Partner Enablement Pat Toole Kathy Colucci Mary Garrett Marketing andBT/IT Communications Opportunity to Order Global Client Centers

Sales Transaction Hub

The “Smarter” phase of our transformation is underway 2002 Sharing & partnering

2006 Globally integrating

. Consistent set of processes worldwide 2010 . Leverage best practices Making things smarter . Standardize and reduce . Right skills, right waste place, right cost . Governance and . Rationalize support performance discipline functions for greater efficiency . Instrumented, interconnected, . Radically simplify intelligent processes . Enable growth and productivity . Optimize the whole system

Productivity improvements of $6.2B were achieved through 2010 Shared Services Spend ($B) 20 16.3 14.7 15 13.8 13.2 . $4.8B spending reduction in Shared 12.0 11.4 Services from 2005 through 2010 10

5 . $1.4B productivity improvement in 0 end-to-end process transformation 2005 2006 2007 2008 2009 2010 and integrated operations Year-to-Year Enterprise

2.0 Productivity Savings ($B)

1.5 0.5 0.3

1.0 0.6 1.5 Shared Services 1.2 0.5 1.0 0.5 0.6 End-to-End Process Transformation 0.0 2006 2007 2008 2009 2010 Integrated Operations

Applying transformation principles to all of IBM’s spending $80B to drive $8B in productivity benefits over the next 5 years

Shared Globally Integrated Services $2.3B Support Processes $2.6B

$16.3B $11.5B Integrated Operations $3.1B . Radically simplify 20052005 20102010 20102010 . Integrate operations across units Shared Service Total Cost . Drive differentiated innovation Spending and Expense . Enable growth and productivity

Our transformation initiatives play a critical role in achieving our 2015 roadmap objectives

End-to-End Process Shared Services Integrated Operations Transformation

Globally integrated organizational Horizontal, end-to-end process Programs that draw on synergies units providing support services transformation initiatives in our worldwide enterprise to all of IBM processes, skills and assets to drive integration

Human Resources Hardware Product Management Business Operations Global Sales Operations Transformation Global Client Centers Integrated Supply Chain Incentives Center-Based Operations Real Estate Operations Order-to-Cash Sales Management and Support Finance Opportunity-to-Order Development Legal Service Labor Management Transformation Information Technology Service Product Transformation Marketing and Communications Business Partner Enablement Sales Transaction Hub