Global Business Services

IBM Overview
prepared for

NDTA, Tampa Bay Chapter

13 Sept 2007

Mark Nixon Senior Managing Consultant Supply Chain Management Global Business Services rmnixon@us.ibm.com 2007 IBM Corporation 813-840-4988

IBM Global Business Services

Agenda

Differentiators IBM Global Business Services

IBMs Internal Supply Chain

Research and Development

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Why IBMour key differentiators

On Demand Services
Reach-back Behind every IBMer there are thousands of resources available

We transformed ourselves
SCM & Distribution Workforce & Knowledge Management Lean Six Sigma & Component Business Model

Open Architectures & Open Standards - we are agnostic to solutions

Largest Integrator of ERP & COTS

Our solutions are built on innovation & best commercial practices; supported by Services Oriented Architectures

IBM We want to solve your most difficult problems

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Over the past 15 years IBM has made a major transformation from a hardware company to a services led business

1993
7% Other 17% Services 49% Hardware 27% Software 3% Finance

2005
1% Other 52% Services

27% Hardware 17% Software

$62 Billion Revenue

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$91.1 Billion Revenue

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IBM exports our logistics and supply chain successes for our clients.

In the last 3 years alone, transformation has produced impressive results!!

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IBM Global Business Services is a partner of unmatched breadth and depth

Consultants and professional staff in more than 160 countries globally Deep experience and expertise in 17 industries

Partnerships with leading-edge Independent Software Vendors

Broad set of services spanning Strategy and Change, Customer Relationship Management, Supply Chain Management, Financial Management, Human Capital Management, Application Innovation Over 8500 Supply Chain consultants worldwide, with 1000 working in the Public Sector
Industry Sectors
Financial Services Communications

Service Lines
Strategy & Change

Distribution

Supply Chain Management Industrial Public Human Capital Management Customer Relationship Management Financial Management Business Transformation Outsourcing Application Services

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Business Consulting Services has a suite of offerings, many of which have active IBM DoD projects today

Human Capital Solutions Employee Portals Human Capital Transformation ERP Implementation Human Capital Data Warehousing and Decision Support

Customer Relationship Management CRM Vision Customer Analytics Integrated Multichannel Solutions CRM ACCEL

Financial Management Finance Transformation Strategy Data Warehousing / Decision Support / BIS ERP / Finance Infrastructure iAnalytics

Supply Chain Management Integrated ERP Procurement Adv Planning and Scheduling Fulfillment and Logistics Collaborative Product Commerce Maintenance and MRO Mgmt Retail & Financial Institution Ops Collaborative Value Chain Solutions

Strategy & Change Corporate Strategy Operational Strategy Organizational Strategy Change Management Information Technology e-Business e-Transformation e-Globalization Mergers & Acquisitions

Application Innovation Emerging Technologies Enterprise Application Integration Information Technology Infrastructure Reseller Web Services New World Networks

Transform and Operate Solutions Business Process Management Solutions Application Management Solutions Infrastructure Management Solutions Operate

Active IBM Projects

Army Defense Agencies

Army Air Force Defense Agencies

Army Air Force Air Force Navy Defense Agencies

Army Air Force Navy Defense Agencies

Army Navy Defense Agencies

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IBMs Internal Supply Chain operates on a vast scale of tremendous complexity to achieve our distribution mission
18,000 employees at 100 locations in 61 countries Approximately $40 billion, or roughly 50%, of IBMs total cost and expense Moves more than 2 billion pounds of production materiel, end items, and parts annually Handles over 78,000 products, with more than 3 million configurations 45,000 business partners worldwide 33,000 suppliers are connected to IBM through the Web Approximately 350,000 updates are made a day to the 6.5 million customer records from 1.7 million orders a year in North America alone

In November 2005, IBM supply chain ranked 3rd in AMR Researchs Top 25 supply chains
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IBM GBS Supply Chain Practice Area consists of eight Solution Areas that deliver an array of offerings to address supply chain needs from transformational strategy to outsourcing. It also offers advanced frameworks and technologies to enable agile, flexible, and adaptive value net.

Supply Chain Strategy Logistics Supply Chain Planning

Product Lifecycle Management

Supply Chain Management

Enterprise Asset Management and Operations

Procurement Supply Chain Enterprise Applications

Operations Analytics

Transformation

Process Change

Technology Enablement
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Business Transformation Outsourcing

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IBM Research with eight labs worldwide, we have more than 3600 Researchers

Almaden
computer science, database, user interface, web software, storage systems software & technology, physical sciences, materials science, nanotechnology, life sciences, services research

Watson
semiconductors, physical & computer sciences, Life sciences and mathematics

Zrich
communication systems, computer science, selected science and technology projects, and industry solutions and services research

Beijing
language processing, speech & handwriting recognition, pervasive computing, mobile computing, multimedia, and e-business technologies & solutions

Haifa
VLSI design, verification technology, storage subsystems, e-business and security, computer systems, programming languages and environments, advanced applications, applied mathematics, multimedia, and service technologies

Delhi
electronic commerce, media mining, fingerprint matching, speech recognition, weather forecasting and wireless networks

Tokyo
software technology, systems technology, pervasive computing, Internet technology and applications

Austin
high performance/low power VLSI design and tools, system-level power analysis, and new system architectures
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IBM RFID Centers of Excellence 10 Worldwide Centers

Helping our clients understand the business value and the physics of RFID

Dallas, TX USA Charlotte, NC USA RTP, NC USA Raleigh, NC USA

Washington, DC USA

Markham, Canada

Dublin, Ireland

So Paulo, Brazil
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La Gaude, France
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Yamato, Japan
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Wireless Center of Excellence Research Triangle Park, NC

Wireless Center of Excellence Building 311 - RTP Campus

RFID-Enabled Pallet Wrapper Conference Room RFID-Enabled High Speed Conveyor RFID-Enabled Fork Lift (2) Connected to WLAN

RFID-Enabled Dock Door Area

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RFID Technology Lab (Printer Area Shown)

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The Changing Business Landscape -- A Recent Navy View of IBM IBM Supply Chain Transformation
Nearly $26B* in Cost Savings
Sea Enterprise Business Transformation

Early 1990s Priorities of IBM Transformation (akin to Sea Enterprise)

People Internal Cost Reduction Customer Satisfaction
Purchase Order Process Time Procurement Centers Supplier Quality Client Satisfaction

2005
One day 3 99% 80% 95% 92% 35,000 <0.2% 280

One month 300 85% 40% <20% 55% <500 >35% 0

Cash Generation

Electronic Purchases Acceptable Business Controls Enabled Suppliers "Maverick buying Electronic Catalogs

Supply Chain Transformation

1. Integrated

the supply chain 2. Rolled out strategic IT platforms 3. Optimized supply chain sourcing

Navy Supply Chain challenges: distributed/duplicative supplier mgmt, procurement, and logistics functions *normalized for Lenovo
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The Changing Business Landscape -- A Recent Navy View of IBM

IBM Profile vs. Navy Profile

Sea Enterprise Business Transformation

Is Navy today more like IBM under Akers or IBM under Gerstner? Are we making progress? How can we accelerate change?

IBM
q q

Navy 2005
10th $91.1B 329,000
4,000
q q

Fortune 100 ranking: Total 2005 Revenue: Total Staffing:

q

Fortune 100 ranking: Total FY05 Revenue: Total Staffing:

q

7th $103.7B ~900,000

29,500

HR Staff

HR Staff

q q q

% Executive Mgmt: # of Pay Bands: Distinct Business Areas:

0.01% 15 6

q q q

% Flag & SES: # of Pay Bands: Distinct Echelon IIs:

0.09% 24 27

Total Networks:
q q q

1
4,100 406 300

Total Networks:
q q q

850
23,755 1,083 708

Total IT Applications: Financial Mgt. Apps. HR Apps.

Total IT Applications: Financial Mgt. Apps. HR Apps.

Supply Chain Budget:

$40B

Supply Chain Budget:

$57B

NFOTS 2005

Driven by market competition, IBM is further along in their journey

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