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Confidential / © Siemens AG / Siemens Business Services 2006. All rights reserved

Paris, October the 9th 2006

Siemens Business Services

Effects of Globalization on firms

Elie COHENChief Executive OfficerSiemens Business Services France

October-06 Confidential / © Siemens AG / Siemens Business Services 2006. All rights reserved

Agenda

Company profile

Globalization overall context

Impacts on Siemens’ strategy

Q&A session


Company profile


Siemens overall profile

Over 155 years of expertise

World leader: 21st largest company in the world Largest company in the electrical & electronics sector 8th largest business in Europe 6th biggest employer in the world with a global network of

426,000 people in 190 countries

Sound financial management with global revenues of € 80 billions

Investment of € 500m p.a. in workforce skills

Innovation is the key to entrepreneurial success generating more than 30 inventions a day


Active in six business areas

LightingAutomation and Control

Information andCommunications Power Transportation Medical

OSRAMAutomation andDrives

Industrial Solutions and Services

Communications

SiemensBusinessServices

Power Generation

PowerTransmission andDistribution

TransportationSystems

Siemens VDOAutomotive

Medical Solutions

26%23%

16%10%

19%

6%

External sales of Operations Groups excluding Other Operations

Siemens Building Technologies


Major R&D investments

Our patent positions (2005): Germany: No. 1 Europe: No. 2 U.S.: No. 10

Recent breakthroughs: Piezo injection

(reduces fuel consumption by 20%)

Softswitch(true carrier-grade reliability: 99.999%)

syngo(workflow integration – up to 25% time savings)

Combined cycle power plant(increases degree of efficiency: 58.8%)

Major innovations

€5.2 billion in fiscal 2005 47,000 R&D employees

worldwide 30,000 software engineers 150 R&D locations in over

30 countries around the world 8,800 inventions in 2005 53,000 active patents

Innovation is our lifeblood


Canada

USA

Argentina

Brazil Australia

Singapore

China

Russia

South Africa

India

CIS

Italy Turkey

HungaryAustria

Poland

Czech Republic

Finland

Sweden

Norway

Switzerland

Great Britain

Denmark

Netherlands

Belgium

FranceGermany

Ireland

SpainPortugal

Greece

CroatiaSlovakia

Romania

Thailand

Fujitsu partner for ASP

Overall presence


Globalization overall context


Over centuries, the economy centre of gravity has made a full loop

1300 years

250 years

310 years

45 years


Initial concept and consequences

Started in the early nineties with an ‘export’ model of democracy, society, way of life and economy model to emergent countries

Culture, history, existing models and utopias were not taken into account

Balance of trading and richness were not anticipated

Risks and benefits to population were not appreciated

People aspiration to better life in their context and culture

Developing countries claim to raise local added value

Elite has to be educated initially in developed countries

Infrastructure services must be developed to market and social standards


Globalization : threats or opportunities ?

Heavy social impact

Knowledge evaporation

Coordination increase

Heavy image impact

Challenged servicequality

Challenged securitymanagement

Complex reversibility

New markets access

Competitiveness increase

Defined rules and duties

Defined formal SLAs

Defined policies and tools

Long term partnership

Reinforced methods & ICT

Levers

Strong ethic policies

Partnership instead of purchasing

Enhancement of Governance

Companies will balance threats and opportunities by structuring themselves stronger than actually


Globalization : opportunities and opportunities

Heavy social requirements

Knowledge evaporation

Non adapted Education

Infrastructure saturation

Culture unfit

Ethic challenges

Levers

Transparency

Investment instead of subsides

Sharing instead of concentrating

Low and high cost Countries will benefit from globalization by balancing commercial exchanges and experience sharing

Educational programs sharing

Infrastructure Projects

Shared ethic policies andImage

Multi-Culture benefits

Staff retention programs

Set up social pre-requisites


Impacts on Siemens Strategy

We must be

Well prepared to master global challenges, leveraging on permanent innovation and differentiation, to growth

Well prepared to master global workforce, leveraging on off shoring, to insure competitiveness and continuity


Global Mega trends

Urbanization Today: 280 million people in mega cities (> 10 million) 2007: First time in human history

more people living in cities than in rural areas

2015: 350 million people in mega cities

Challenge for infrastructure

Demographic change Average life expectancy increases globally Population growth from more

than 6 billion to 8 billion by 2025

Challenges for infrastructure and healthcare

Global Mega Trends : shaping tomorrow’s markets


Siemens today No. 1 in healthcare IT Technology leader in imaging systems Innovation leader in healthcare processes

Percentage of 80+ generation to grow globally Healthcare costs in industrialized nations rise to €3.8

trillion in 2010 (2002: €2.9 trillion) In Germany, healthcare costs account

for 10.7% of GDP

Increasing consumption of oil (until 2030 CAGR 1.8%), natural gas (2.5%) and coal (1.6%) to fuel global energy demand requires efficient systems and solutions for mining industries

Increasing world population requires efficient production and supply of food and goods

Siemens today Leading solution provider for mining,

oil & gas industries Number 1 in industry automation

Well prepared to master global challenges

Healthcare

Industry


Siemens today Drinking water treatment Water distribution Wastewater treatment

1.2 billion people without drinking water 2.4 billion people not connected to waste

water systems 40% increase in water consumption by 2025

More than 40% increase in worldwide energy demand in the coming 25 years

Increase of CO² emission risk to global climate

Siemens today Strong No. 2 in power technologies worldwide Complete range of fossil fuels, wind power, biomass

and fuel cells Trendsetter in intelligent power generation

and distribution Low-loss electricity transport


Water

Power


2010: Per passenger airline mileage will double compared to 1995

Americans spend 3.5 billion hours a year stuck in traffic jams

Need for more efficient urban security systems Larger and more frequent events in mega-stadiums

Siemens today High-performance rail systems Telematics solutions Fleet management Communications solutions

Mobility

Security


Siemens today Single supplier of integrated electronic security solutions Ticketing systems Biometric identification systems


Global Data CentersGlobal Call Centers

Partnerfor Asia

Delivery locations are key competitive factors

India (Bangalore, Chennai) Application Support Application Management Center Outsourcing Transition support

China Shared Service Center

Russia (Voronezh) Inbox, Invoice Services

Turkey (Istanbul) Customer Interaction Center Remote Management Services

Ireland (Cork) Customer Interaction Center Marketing Services

Czech Republic (Prague) Accounting Services

Singapore Shared Service Center

South East Europe (e.g. Bratislava) Inbox Services

Canada (Toronto) Customer Interaction

Center

Skill base, Cost, Language, Time zone, Stability

USA (Mason, Chicago) Customer Interaction Center Data Center

Germany (Fuerth, Munich, Paderborn) Customer Interaction Center Data Center

Austria (Vienna) Customer Interaction Center Data Center

Delivery location selection criteria:ICT, Collaborative, Knowledge Mngt, Workflow

Conditions:


India• BPO for Barclays• Reservation Centre for major Car

rental company• Accounts payable for Siemens US

China• HR processes for

Siemens Companies• Accounts Payable for

Siemens Companies

Voronezh, Russia• HR back-office for

Siemens in Germany

Turkey• Helpdesks for

global electronics corporation

Bratislava• Airline back-office

for major European Carrier

UK• BPO for Financial

Services, Siemens UK, and Government

Ireland• Multi-lingual Service Desk

South Africa• IT and Business

Process Services for Department of Labor

Global delivery backbone is a support of competitiveness, innovation and growth

Permanent increase of the local added value


22% 25%33%

101 19.1 96

€

27%33%

21%

125 24.4 61

€

36%

21%25%

165 15.7 72

€

3%8% 6%

1212 6.1 18

€

12% 13% 15%

58 10.1 44

€

Employees (thousands)

Sales (billions of euros)

Major facilities

€

Global presence : basis for competitiveness

Americas

Europe(excl. Germany)

Germany

Others

Asia-Pacific

As of September 30, 2005


Corporate Responsibility at its best

Corporate Governance

Corporate Citizenship Generation21 (education program)

Caring Hands (charity program)

Support for the arts and sciences

Business Practices

Sustainability


Questions and Answers

effects of globalization on firms - oecd. · pdf fileeffects of globalization on firms ... non...

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