Services Strategy

Johnson Sherng , Dec.21, 2002

Core functions Non-core functions

Businessservices

IT services

Core Business Services

Services support that improves the efficiency and effectiveness of core business functions

Business Process Services

Third party services that take responsibility for non-core business functions

IT Productivity Services

Services that improve the value IT systems deliver to the core business functions

Strategic Outsourcing

Third parties that take responsibility for IT systems supporting non-core business functions

Customers Express Needs in Four Areas

Core Business Services Business Process Services

Core IT Productivity Services Strategic Outsourcing

Businessservices

IT services

e-commerce Customer intimacy (CRM) Supply Chain Enterprise Resource Planning Knowledge Management Business Intelligence

Systems Integration IT Consulting Application Development Mergers & Acquisitions Maintenance Total Systems Management IT Consolidation Business Recovery

Data Center Desktop Application Network Web Hosting

Billing & Claims Payroll Processing Logistics and HR Credit Services

Customers Express Needs in Four Areas

Business Innovation Services

Businessservices

Business Process Services

Integrated Technology Services

Strategic Outsourcing Services

Core functions Non-core functions

IT services

Our Lines of Business

StrategicOutsourcing

Services

BUSINESS

IT

HELP ME DO IT MANAGE IT FOR ME

Integrated Technology Services

Business Innovation Services

WHAT SHOULD I DO ?

Industry-oriented business and process consulting, combined with e-business strategy, Web design and systems integration expertise

Speed in delivering integrated, end-to-end e-business solutions

Design, deploy and support the e-business infrastructure Maximize value of IT infrastructure investments Keep e-business and IT systems up and running

World class IT talent, infrastructure and management processesContinuous, reliable management of Web sites and core business operations

Our Portfolio

StrategicOutsourcing

Services

Hosting Services Application Management

Services (ASPs, e-Markets) IT Outsourcing Services

BUSINESS

IT

HELP ME DO IT MANAGE IT FOR ME

Integrated Technology Services

Business Innovation Services

e-business Infrastructure Services IT Optimization Services Systems Management Services Business Continuity & Recovery Services

e-business Strategy & Design Consulting

Digital Marketing & Branding

E-commerce ServicesSecurity & Privacy ServicesCustomer Relationship Management ERPSupply Chain Management Business Intelligence ServicesProcurement Services

e-MarketsWeb Application Developmente-business Skills DevelopmentCustom Systems Integration Knowledge Management Services

Networking & Connectivity Services Hardware & Software Technical

Services IT Product Training Services

WHAT SHOULD I DO ?

Our Portfolio

Strong global competency & support sturcture Wide scope of services coverage Best of breed customer service quality

IGS Offerings Blueprint

PLAN DESIGN IMPLEMENT RUNACCESS

BusinessConsulting

ITConsulting

Total Systems Management Services

Business Transformation Services StrategicOutsourcin

gServices

Business Management Services/ERP

Business Intelligence Services

Supply Chain Management Services

CRM Services

e-commerce Services e-business Enablement

Services Hosted Business

Application Services Distributed Learning

Services

Global Transformation 2000 Services

Custom Systems Integration Services

Business Transformation Knowledge

Management e-business Advisory

Services

Site and Connectivity ServicesBusiness Recovery ServicesIT Product Training Services

Business Process Management Services

Application Management Outsourcing Services

IT Outsourcing Services

Network Outsourcing Services

e-business Services

Hardware and Software Support ServicesSystems Management and Networking Services

IT Strategy Business Recovery

Consulting Network Consulting Systems Management

Consulting

BUSINESSSERVICES

ITSERVICES

BusinessCycle

IGS Services Value Proposition

IBM Global Services

Greater China Group

Businessprocesses

IT

Distance between IT and businessTraditional business modelsConsumer interacts with organisation

Convergence of IT and business Inter Enterprise business

(B2B/B2C) Increase of Global reach e-business models Consumer interacts with IT

customer organization informationtechnology

Businessprocesses

IT

increased risks

increased need for IT capability, availability &

security

customer organizationinformationtechnology

IT & business processes are converging while customers are interacting directly with IT... this leads to increased needs for IT capability, availability and security

Legacy model New world model

What is changing in the market?

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

1998 2003

$1.0 trillion

Hardware30%

Software14%

$1.7 trillion

e-business

Services56%

EmbeddedTechnology

TraditionalComputing

19%

11%

5%

CAGR

e-business is a Services Play

Performing ManagementQuality Delivery Accountability

Client Satisfaction

¿é¤J¤å¦r

Verifiable Outcomes

&Sell Cycles

Services Management

Market ManagementCoverage Model

Client ValueMarketing

Resources ManagementSkill Certification

UtilizationRecognition

Opportunity Management

Prioritize opportunities

Solution designOfferings package

Business Management

ProfitabilityQuality Process

Forecasting

Source: Dr. Rowland Moriarty, Cubex CorporationOxford Associates Inc

Cost of Sale

Value- Added of

Sale

"Off-the-Rack"

Customized

Low High

A simplified channel segmentation based on Value and Cost

Channel selection

Speed is the New Currency

Customers now require... Adaptive e-business strategies Integrated business processes A flexible, robust infrastructure Bulletproof, earthquake-proof systems Deep, broad technical skills...

And they need them fast!

Introduction Growth

Maturity

decline

Time

$$$

Different SVCS offering maturity stages fit better different channel families

FTF, VARS, Web*

Selected indirect

Start migrating onto DM

BP,DM (TS.TMKTG,

Web)

FTF And whole

spectrum of Indirect

Mindset share

Market share

Revenue maximisation

Profit maximisation

* Especially fit if the offering has an exclusivity attribute

Main goal

Lifecycle phase

Channel selection

Services Marketing Strategy

Product

SYS MGMTNW MGMT

BI , CRM , ERP , SCM

E-Business

Value Selling

Solution Selling

Services Selling

Product Selling

Infrastructure

Traditional Companies

Expanding business

processes to the Web

e-Markets

Run by intermediaries

ASPs / ISPs / ISVs

Renting applications to

businesses

Dot.Coms

Selling products & services

Customers

Technology

Delivery

Outsourcing Services to Hosting Partners

Architecture

What's Hot Today?

Web Hosting

Operations

System Integration

Application Development

Interactive Design

Marketing

Business Processes

Business Strategy

Arc

hite

ctur

e an

d Te

chno

logy

What's Hot Today?

e-business Strategy and Design

e-Business Roadmap

Information transmission

Data access

Growth based on experience Commercial

transactions

Val

ue

Source: McKenna Group

RecognitionAppear-ance Pilot Formal

adoption

Process invest-

ment

Action stages

3rd stage

Open a Web site

Connect to key systems

Improve business processes

2nd stage

1st stageB

usi

ne

ss-m

ech

an

ism

ba

rrie

r

Se

curit

y b

arr

ier

It is said that irrespective of their industries, most corporations tackling e-business will follow much the same action stages.

As their e-business grows, corporations will be inevitably required to get over the security barrier and the business-mechanism barrier.

In the process of developing e-business, corporations have to get over the security barrier and the business-mechanism barrier. That is, you have to further sophisticate your systems and innovate your business processes and business models.

redefine coreProcess

Integrate with Partner

Next Generation e-Business

and how it's redefining itselfat Webspeed...It's a fast-moving market converging towards ASP and transaction- based business portal models with new players entering daily.

Access ISPsBasic accessSearch & navigationAdvanced media

Telco NSPsPSTNIP backboneVoice over IP

Web HostersShared hostingDedicated hostingCollocation

Wholesale ISPsIP backboneWholesale bandwidth

ISVsPackaged apps VerticalsCross-industry

Licenses Subscriptions Services Rentals Transactions ALL

Revenue Model

ASPsApplication services (providing apps)Managed services (e-commerce, messaging)Outsourced function (managing infrastructure and apps)

Born-on-the-webAuctionsExchangesMarketplaces

VARs, SIsConsultingServicesFulfillment

Net.Gen ISVsWeb appsWeb Services

B2C B2B

Growth in B2B Market

Bus to Bus Purchasing on Internet1998-2003

0

200

400

600

800

1000

1200

1400

1998 1999 2000 2001 2002 2003

Billions ofDollars

Forrester forecasts B-to-B purchasing on Internet to grow from $43 Billionto $1.3 Trillion

B-2-B Commerce has gone from $0 - $143 Billion (Source: Goldman Sachs)

125% CAGR in B-to-B Purchasing on Internet from 1998 to 2003 (Source: Forrester)

WW Businesses running Internet procurement applications will generate $103B in savings in 2003(Source: IDC)

Early adopters of e-procurementrealizing 300% ROI in year 1(Source: Aberdeen Group)

Operating costs being lowered by70% as a result of e-procurement(Source: QPEC Research)

105% CAGR for e-procurementapplication revenue to $5.3 Billionby 2003 (Source: IDC)

By 2003 B-2-B will be six times as large as B-2-C

e-businessApplication

Access e-ContentInformation

PervasiveComputing(e-Life)

e-businessInfra-Structure

Traditional

Net. Generation

Enterprises

Proprietary

Openenvironment

IT

M & E

e-ChannelMedia Propagation

VirtualDigital

Real

BroadBand/Mobile Analog/

Wired

Telcom

<SP ©w¦ì>

Portal

Net.Gen

ICP

ISP

TelcoASP

Positioning of Service Providers

Business ModelLocation Partner Contents Providers

ISDN/ADSLBroad Band Network

Order/Delivery

Payment

Operatation center Fiancial Services

Merchants

Banking branch,

Self service area

Conveninence Store

Public AreaStation

Shopping Mall

Book storeChain Store

Credit Card/Debit Card

TicketingBanks

Seller CentricCatalogPromotionsPricingOrderPayment

Buyer CentricProcurement

DirectIndirect

Ship Schedules Production Schedule

FunctionalityBuyer

ApplicationsSeller

ApplicationsFull Services

Invoicing & payment

FinancingLogisticsCommunity

Market StructureVerticalHorizontal

ModelsCatalogAuctionRFP/RFQExchange

e-Marketplace

Seller Solution

B

B

B

B

B

Buyer Solution

S

S

S

S

S

S

B

S

B

S

B

S

B

S

B

e-MarketplaceSolution

e-Marketplaces define a new e-commerce model

Su

pp

lier

s

Cu

stom

ers

EnterpriseResourcePlanning

SupplyChain

Management

ProductDesign

Management

CustomerRelationshipManagement

Business Integration (inter/intra-enterprise)

WebSphere Commerce Suite

Enterprise e-Environment

Delivering, Growing and Differentiating to meet Business Objectives

Ap

pli

cati

on

S

ervi

ces

Web Application Servers and Messaging

Web Site Services IT Services

Commerce

Customer & Partner Applications

SCM ERP

MRO CRM

PortalB2B

WebSphere Web Page Builder

WebSphere Application Servers MQSeries

WebSphere Transcoding Pu

blisher

Development Services

Enterprise Site Analyzer

SecureWay Policy Director

WebSphere Performance Pack

VisualAge Rules

VisualAge for Java

WebSphere Commerce Suite

WebSphere B2B Integrat

or

WebSphere EveryPlace SuiteF

ou

nd

atio

n

Ser

vice

sF

oun

dat

ion

MQSeries Integrator

MQSeries WorkFlow

PDM

Del

ive

rG

row

Dif

fere

nti

ate

ContentManagement

BusinessIntelligence

RDBMSDB2

DirectoryLDAP

SecuritySecureWay

Network MgtTivoli

EnterpriseInformation

Portal

WebSphere Domino Integratio

n

Collaboration

WCS Marketplace

Edition

e-Marketplace