Technology as an Enabler for Finance Transformation

Technology as an Enabler for Finance Transformation:

Leveraging Automation and Business Intelligence Tools across Finance, Accounting & Procurement

A Global Company with strong U.S. presenceRank 30th on Fortune Global 500Rank #1 on Fortune’s Electronics, Electrical Equipment listExport $1.6 billion from U.S. operations 20% of Siemens’ global revenue generated in US—largest country Would be in the Fortune 120 if a standalone company in the U.S.

U.S. Fast Facts Fiscal Year 2009:

Revenues

Orders

Employees

Building Locations

Global HQs

Patents

$21.3 billion

$19.9 billion

64,000

760

9

5,329(1)

Siemens in the USA Snapshot of 2009

Every Business Day…

…We help the U.S. Postal Service process all letter mail delivered to American homes and businesses

…We filter one in ten glasses of water consumed by Americans

…We help treat more than 30,000 cancer patients with our radiation therapy systems

…We process 190 million U.S. healthcare information transactions

…We help provide baggage security services in 450 of America’s commercial airports

…We average more than five new U.S. patents to help improve the lives of millions of Americans

…We help provide power to more than 100 million people

Industry

Divisions

Drive Technologies

Industry Automation

Building Technologies

Mobility

Lighting (OSRAM)

Industry Solutions

Energy

Divisions

Fossil Power Generation

Renewable Energy

Oil & Gas

Energy Service

Power Transmission

Power Distribution

Healthcare

Divisions

Imaging & IT

Workflow & Solutions

Diagnostics

Global Matrix Vertically aligned sectors/divisions --- Regionally managed central functions/shared services

EZ-X / Expense ReimbursementAudits – Continuous Monitoring

Accounts Payable2.2M invoices

Imaging OperationsVendor MaintenanceInvoice ProcessingPayment ProcessingAP InquiriesAccounting/Control/Reporting

CollectionsDispute managementCash ApplicationsCustomer Master Data Maintenance (CMDM)

Accounts Receivable

Accounts PayableAccounts Receivable (FI Billing)Clarification Server / Disputes

Asset Additions/ changesDisposals/physical inventory Closing/reportingTax reporting

Fixed Assets

Journal EntriesAccount ReconciliationsClosing/ReportingAudit support

General Ledger

Sales & Use Tax ReturnsProperty Tax ReturnsUnclaimed Property ReturnsAudits & ConsultingStrategic Review/Claim mgmtAnnual Reports1042 Filings

Tax18K returns, 70 audits

Global Shared Services NA: Accounting and Finance Portfolio of services

Expense Reporting600K Expense Reports, 28K Cards

Inter Company Clearing400K Invoices

Initial transition – lift and shift

Developed basic tools to enable centralized delivery

Electronic Imaging & archiving capabilities

Initial Transition (’00/’03)

Developed & implemented offshore service delivery center

Drove standardization

Implemented formal benchmarking

Standardized SLA with transactional pricing

Formalized metrics and reporting

Standardize / Offshore (’03-’05)

Global Shared Services NA: Accounting and Finance Evolution and key achievements

Automation/outsourcing of all transactional activities

Web Based Self Service functionality

Call tracking / incident management system

Continuous Monitoring / Fraud Detection / Compliance controls

End to end process improvements and savings

Transform (’06-’09)

A&F services grew from 10% to 95% market share while reducing cost per transactionby 60-70% across all mature service lines

Transformation Objectives

Transparency and compliance

Process effectiveness and efficiency

End to end quality improvements and cost reductions

Full scale

Q1

Q2

Q4

Q3

ChallengesMultiple vertically integrated and business specific

ERP systems which bundle finance functions with

engineering, production and logistic functions.

Transformation managed and executed on North

American level

Ongoing regional & global M&A activities

GSS NA Accounting and Finance Transformation Strategic role of technology

Healthcare CTI Molecular (2005)

Diagnostic Products (2006)

Bayer Diagnostics (2007)

Dade Behring (2007)

80% of Siemens’ acquisitions in past five years have been in the USA

Industry

USFilter (2004)

Robicon (2005)

UGS (2007)

Energy Wheelabrator (2005)

Technology Approach

Strategy:

Sustain benefits of vertically aligned ERP systems and

processes

Complement ERP functionality with middleware and

best of breed solutions to create integrated, scalable and

robust technology platform

Execution:

Processes clearly defined to level 5

Map to existing systems & best in class functionality

Key decisions on configurability, integration points,

process and data standardization

Start with high impact solutions and grow end to end

Leverage opportunities created along the way

Challenges

Transformation Objectives

Transparency and compliance

Process effectiveness and efficiency

End to end quality improvements and cost reductions

Full scale

Q1

Q2

Q4

Q3

Multiple vertically integrated and business specific

ERP systems which bundle finance functions with

engineering, production and logistic functions.

Transformation managed and executed on North

American level

Ongoing regional & global M&A activities

GSS NA Accounting and Finance Transformation Strategic role of technology

Invoice Approval

Invoice Submission

Invoice Processing

Configurable workflow

LOA/Approvals

Automated escalations

E-WorkflowScanning, Indexing

paper Invoice

paper Invoice

Accounts Payable Using technology to transform financial processes

ERP 1ERP 1

ERP 1ERP 2

ERP 1


Invoice Approval

Invoice Submission

Invoice Processing


LOA/Approvals


Leverage multiple channels for electronic submission

EDI for large volume vendors

Low cost options

E-Workflow

ElectronicPO & Invoice

Data

E-invoice Submission

Web Entry

Direct Vendor Integration

PO Flip

ERP 1ERP 1

ERP 1ERP 2

ERP 1

http://www.apple.com/education/emac/specs.html


Invoice Approval

Invoice Submission

Invoice Processing


LOA/Approvals


Built in business rules for compliance, PO match & tax

Minimize exceptions

Direct integration with multiple ERP



Low cost options

E-Workflow


Data

E-invoice Submission E-Voucher

Web Entry


PO Flip

ERP 1ERP 1

ERP 1ERP 2

ERP 1




Invoice Approval

Invoice Submission

Invoice Processing


LOA/Approvals



Minimize exceptions




Low cost options

E-Workflow


Data


Vendor / CustomerServices

Vendor Self Service inquiry

Real time status of payments

Query entry

Invoices Online

Web Entry


PO Flip




Invoice Approval

Invoice Submission

Invoice Processing


LOA/Approvals



Minimize exceptions




Low cost options

E-Workflow


Data





Query entry

Invoices Online

Web Entry


PO Flip


Call Tracking & Incident mgmt

Automated Metrics

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Standard

Target Standard

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Jan-07

Feb-07

Emergency

Emergency Target

Metrics Metrics

Customer MaintenanceCycle Time


February

February



Invoice Approval

Invoice Submission

Invoice Processing


LOA/Approvals



Minimize exceptions




Low cost options

E-Workflow


Data





Query entry

Invoices Online

Fraud Detection

Duplicate payment prevention

Vendor Risk analysis

Compliance & Analytics

Automated compliance

Web Entry


PO Flip



Automated Metrics

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Standard

Target Standard

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Emergency

Emergency Target

Metrics Metrics



February

February



Invoice Approval

Invoice Submission

Invoice Processing


LOA/Approvals



Minimize exceptions




Low cost options

E-Workflow


Data





Query entry

Invoices Online

Fraud Detection





Web Entry


PO Flip

Procure to Pay Using technology to transform financial processes

Procurement Analytics


Automated Metrics

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Mar-06

Apr-07

May-07

Jun-07

Jul-07

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Nov-07

Dec-07

Jan-07

Feb-07

Standard

Target Standard

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Apr-07

May-07

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Dec-07

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Feb-07

Emergency

Emergency Target

Metrics Metrics



February

February

Leverage line Item Invoice & PO data forProcurement & Spend analysisSupplier PerformanceContract negotiation



Invoice Approval

Invoice Submission

Invoice Processing


LOA/Approvals



Minimize exceptions




Low cost options

E-Workflow


Data





Query entry

Invoices Online

Fraud Detection






Vendor Maintenance

Web based forms

Built in compliance checks & controls

Master data standardization

W-9 collection

LOA/Approvals

Escalation/ queue management

Electronic signature / document controls




Invoice Approval

Invoice Submission

Invoice Processing


LOA/Approvals



Minimize exceptions




Low cost options

E-Workflow


Data





Query entry

Invoices Online

Fraud Detection







Catalog Mgmt& PO placement

Increased compliance

Reduced maverick spend

Automated PO placement



Automated Metrics

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24

Mar-06

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-07

Feb-07

Standard

Target Standard

0

1

2

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5

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Mar-06

Apr-07

May-07

Jun-07

Jul-07

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Sep-07

Oct-07

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Jan-07

Feb-07

Emergency

Emergency Target

Metrics Metrics



February

February

SRM

•Real time pricing

•Reduced invoice discrepancies

•Improved adoption

•Use of negotiated contracts

Online Catalogs

…Robust, integrated technology platform enables standard, compliant and cost efficient processing in a complex cross functional environment

…Configurability allows further process standardization and easy rollout of policies

…Visibility of data and operational / quality metrics drives end to end process improvements and best practice adoption

…Fast rollout to new companies (3-6 weeks)

…Flexibility to utilize multiple electronic submission solutions

…Fast Vendor Adoption – One stop solution for vendors

…Optimal technology investment with significant potential

Results

Questions, Comments?

Margarita Gosheva CIO, VP Information Technology Siemens CorporationGlobal Shared ServicesNorth America

407-487-5091 (office) 3500 Quadrangle BoulevardMail Stop: AL-X 444Orlando, FL [email protected]

mailto:[email protected]

Backup

Strong Presence Across the U.S.Siemens USA: 64,000 Employees in all 50 States

Yellow1500-2,500 Employees

BlueOver 3,500 Employees

Orange2,500-3,500 Employees

Green500-1,500 Employees

Gray1-500 Employees

>5,300

>5,700

>8,300

>4,100

>4,000

>4,100

>5,900

Healthcare Molecular ImagingHoffman Estates, ILHealthcare

Oncology Care SystemsConcord, CA

EnergyEnergy ServiceOrlando, FL

Healthcare Health ServicesMalvern, PA

IndustryWater Technologies Warrendale, PA

Global Innovation Leadership

IndustryPLM (Product Lifecycle Mgt.)Plano, TX

HealthcareDiagnosticsChicago

Siemens in the USA: Home to nine worldwide businesses / divisions

Healthcare UltrasoundMountain View, CA

IndustryVAI Metals Worcester, MA

GSS has a global footprint with well established Shared Service Centers

Prague

Lisbon

São Paulo

Orlando

Beijing

Munich

Bangalore

Frimley

Buenos Aires

ViennaIselin

The Hague

Singapore

MadridAtlanta

Mexico CityMumbai

Glasgow

Erlangen, Nuremberg

AMCs GSS HQ Delivery centers Regional HQs

Bogota

Number of GSS employees around the worldin the largest locations 20081)

1) Headcount figures are FY 08 year end forecast, as at end May 08

Germany 1,400

Americas 830

India 820

Czech Rep 460

UK 450

Austria 380

China 310

Portugal 200

A Global Company with strong U.S. presenceRank 30th on Fortune Global 500Rank #1 on Fortune’s Electronics, Electrical Equipment listExport $1.6 billion from U.S. operations 20% of Siemens’ global revenue generated in US—largest country Would be in the Fortune 120 if a standalone company in the U.S.

Answers for America’s Industrial NeedsWe’re a leading provider of product lifecycle software for digital manufacturingWe process all mail in the USA for the U.S. Postal ServiceWe’re a leading provider of air pollution control systems We provide building and lighting solutions for airports, hospitals, stadiums and renowned American landmarksWe’re the #1 provider of light rail mass transit vehicles We’re the #1 supplier of water treatment systems for industry and municipalities

Answers for America’s Energy NeedsWe provide turbines powering one-third of America’s total daily energy needs We’re a leading provider of power generation and delivery solutionsdesigned to help reduce C02 emissions

Answers for America’s Healthcare NeedsWe’re the first integrated healthcare company that brings together imaging and lab diagnostics, therapy, and IT.We’re the #1 healthcare IT service provider

U.S. Fast Facts Fiscal Year 2009:

Revenues

Orders

Employees

Building Locations

Global HQs

Patents

$21.3 billion

$19.9 billion

64,000

760

9

5,329(1)

Siemens in the USA Snapshot of 2009

…We help the U.S. Postal Service process all letter mail delivered to American homes and businesses

…We filter one in ten glasses of water consumed by Americans

…We help treat more than 30,000 cancer patients with our radiation therapy systems

…We process 190 million U.S. healthcare information transactions

…We help provide baggage security services in 450 of America’s commercial airports

…We average more than five new U.S. patents to help improve the lives of millions of Americans

…We help provide power to more than 100 million people

Siemens in the USA Every Business Day…

Vom ersten direkten Transatlantikkabel – zu freischwimmenden Windanlagen

From the Electric Victoria – to the Greenster

Vom ersten direkten Transatlantikkabel – zu freischwimmenden Windanlagen

From the first views inside the body – to 3D body scans in less than one

second

From the first direct transatlantic telegraph cable – to the floating wind

turbine

A pioneer of our time – yesterday, today and tomorrow

Major innovationsMajor R&D investmentsOur patent position in fiscal 2009:

Germany: No. 2Europe: No. 2USA: No. 12

Most recent innovations:Somatom Definition Flash:CT with fastest imaging and lowest radiation dosageEfficient power transport (HVDC):the new 800-kV high-voltage, direct-current transmission systemminimizes power lossesArvedi endless strip steel production: new plant delivers energy savings of 45 percent and steel of superior quality

€3.9 billion in fiscal 2009, or 5.1% of revenue31,800 R&D employees worldwide 17,000 software engineers176 R&D locations in over 30 countries around the world7,700 inventions in FY2009More than 56,000 active patents

Innovation is our lifeblood

Revenue by region

Key figures

Revenue by Sector

Revenue and employees

7,7

%

Healthcare

€11.9 billion

Energy

€25.8 billion

49%

29%

Industry

€35 billion

Cross-Sector Businesses

€5.4 billion

Americas

Germany

Europe, CIS, Africa, Middle East

(excl. Germany)

15%

41.5%27%

16.5%Asia, Australia

Location of customer

Continuing operations (in millions of euros) FY2008 FY2009Revenue 77,327 76,651New orders 93,495 78,991Income 1,859 2,457Free cash flow 5,739 3,786Employees 427,000 405,000

Committed to profit and growth

Total Revenue Sectors and

Cross-Sector Businesses

7%

45%

33%

15%

100.000

80.000

60.000

40.000

20.000

500

400

300

200

100

2000

Employees in thousands

1985 1990 1995FY 2009

Revenue in millions of euros

As of September 30, 2009Employees Revenue (billions of euros) Major facilities

Global presence – basis for competitiveness

23%27%

91.70020.8 84Americas

Germany

32%

128.00012.8

83

15%

Europe, CIS, Africa, Middle

East (excl. Germany)

28%41,5 %

31.8 67114.900

Asia, Australia

17%16,5 %

70.30012.680

Technology as an Enabler for Finance Transformation

Business

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