Managing a Mega Programme – Kay Vaughan Siemens PLC

1. Managing a Mega Programme – Kay Vaughan Siemens PLC

2. Siemens and “Delegation Management” – Assignment Management • Brief overview of Siemens globally / Siemens in the UK • Significance of global business and requirement for delegation support • Delegation support UK (IDU) • Delegation support / organisation globally at Siemens • Recent changes in Expat Management at Siemens • Ongoing Optimisation projects • Challenges faced and overcome • Next Steps for Siemens

3. 30.5 22 Siemens - Committed to profit and growth Active in three Sectors Revenue by region Cross-Sector Businesses€6 billion Healthcare €11.2 billion Germany Asia, Australia, Middle East 7.7 % 17% 14.3% 21% 49% Industry€38 billion 26% 29% Europe, CIS,Africa (excl. Germany) 36% Energy €22.6 billion Americas Location of customer Revenue and employees Key figures Employees in thousands 100,000 500 80,000 400 60,000 300 40,000 200 20,000 100 Revenue in millions of euros FY 1985 1990 1995 2000 2008 As of September 30, 2008

4. 27 Global presence – basis for competitiveness Europe, CIS, Africa(excl. Germany) Germany 23% 32% Asia, Australia, Middle East Americas 28.0 132,000 118,400 54 48 12.8 68 20.1 28% 36% 31% 17% 97,600 16.4 49 79,000 21% 23% 18% 26% Employees Revenue (billions of euros) Major facilities As of September 30, 2008

5. Sectors and Divisions: Industry Sectors Industry Energy Healthcare Divisions Divisions Divisions • Drive Technologies • Industry Automation • Building Technologies • Mobility • Lighting (OSRAM) • Industry Solutions • Fossil Power Generation • Renewable Energy • Oil & Gas • Energy Service • Power Transmission • Power Distribution • Imaging & IT • Workflow & Solutions • Diagnostics

6. 30.5 22 Siemens Financial Services Cross-Sector Businesses New orders / Innovations Siemens IT Solutions and Services The business of the cross-Sector Siemens IT Solutions and Services Division with 41,000 employees worldwide comprises comprehensive services for IT infrastructure, global sourcing, outsourcing solutions, and the optimization of business processes. With around 1,900 employees globally, Siemens Financial Services is an international provider of financial solutions for the business-to-business sector. SFS finances infrastructure projects, equipment and operating costs, and functions as a competent manager for financial risks at Siemens.

7. Main UK locations Offices Manufacturing / Offices Headquarters Glasgow Newcastle, Hebburn Durham Belfast Harrogate Bradford Leeds Blackpool Manchester Lincoln Congleton Nottingham Ashby Newtown MiltonKeynes Worcester Aylesbury, Stroud Monmouth Slough, Stoke Poges London, Sunbury Eynsham, Oxford Frimley Tonbridge Romsey Crawley Poole, Christchurch

8. International Delegation Unit UK Siemens global presence has led to a high volume of assignments globally: International Delegation Unit (IDU) – established as Centre of Competence in UK • IDU is a business unit within Global Shared Services (CIT / GSS) UK • Professional Services section of GSS UK (Recruitment, L&D, Procurement, Risk, Fleet & Travel Management, IP) • Strategic reporting line to Corporate Personnel UK

9. International Delegation Unit (UK Delegation Centre) • Responsible for all types Inbound and Outbound delegations to / from the UK • Extensive service portfolio: Core Expatriate Management services UK specific services Governance Service Management Expatriate Projects

10. Core Delegation Services provided by IDU Consultancy / advice to businesses Expatriate Banking Spousal / Partner Support Orientation SAP HR Support School Search Assistance Contractual Support Services Language / Intercultural Training Pension / Social Security Advice Tenancy Management Cost Calculations Expatriate Accounting Removals / relocation Tax Support Non-delegate support (tax, NI, pension) Remuneration Support Advice on medical requirements / vaccinations IDU Helpline -the delegate equivalent to ‘999’

11. International Delegation Unit UK • Focus on quality – adherence to process standards, customer satisfaction (EFQM, PMMA) • Focus on compliance - adherence to legal requirements and internal guidelines • Focus on cost savings/efficiencies - economies of scale, IT enhancements, optimization of vendor management • Regulated profit centre approach • Internal customer focus • Rolling customer education compliance programme • One of main delegation centres within Siemens worldwide • Active participation at global level (advisory, steering board)

12. Current major delegation centres within Siemens 1 Great Britain Germany *2 USA Austria China Dubai India Brazil Delegation experts within 73 countries – all trained in global tool / processes / policy

13. A: Principlesglobal framework B: Guidelinesdetail supporting global principles Global Delegation Principles (GDP) Localization and Customization Each country has developed Country Delegation Guidelines in accordance with GDP Country DelegationGuidelines (CDG) IDU act under Corporate Personnel Mandate The International Delegations Policy is a globally binding policy established by Siemens AG. The IDU is responsible for ensuring compliance with that policy.

14. Host baseddelegation Home baseddelegation Home basedCPD Host basedCPD Tax concept, immigration law orother legal regulations requirean employment contract in thehost countryDelegation period > 6 months2 Exceptional case, only whenthe employee is exclusivelyworking for the home country Standard case Standard case Policies: GDP versus CPDPEmployment in the interest of Siemens outside the home country for a specified period of time Construction / Project Delegation Policy (CPDP) Global Delegation Principles (GDP) Determined by the period of the customer project,but maximum 4 years1, no minimum defined Employment for a specific internal/external customerorder/project (including software orders)Employees whose primary job responsibility is to workoutside their specific employment location Technical or commercial project managementInstallationMaintenanceModificationConsultingCommissioning Servicing 6 month, maximum 4 years1 Know-How TransferExecution of a specific function Personnel developmentFurther education measure Duration SpecificConditions Type ofActivity Location ofemploymentcontract 1) any extension to be approved by the coach of the relevant country and by the coach for the group / corporate department of the Corporate Executive Committee 2) if delegation < 6 months, administration according to CPD Home Guideline

15. Considerations prior to launch of Global Expatriate Management Programme at Siemens Expatriate Management Trends and Implications – trend towards standardisation and global service delivery models Market Trends • Increase focus on: Compliance, Controls, Coordination, Consistency, Competitiveness • Growth in expatriate population diversity (ie. varied types and nature of assignments) General • Standardisation of global service delivery • Continued growth in outsourcing and/or off-shoring administrative tasks • Consolidation of vendor services • Cost effective design and rigorous policy application Expatriate Service Delivery Management Key Implications for a global service delivery model: • An enhanced IT platform is essential to support the global processes • Transfer pricing/ other tax and social security considerations • Funding (cross cost charging) • Training and Change Management

16. Global expatriate management (GEM) at Siemens – expatriate management change programme Global Expatriate Management (GEM) project: • New global organisational model implemented • Global/regional service management established • New global delegation policy/country guidelines implemented • Design and implementation of global expatriate tool – IHRIS • Global rollout of online delegate order system – DOS • Implementation of delegate travel tracker tool • Review and implementation of global delegation processes • Global vendors selected for taxation and allowance data provision

17. 2,147 HR Governance Service Management HR Shared Services forSiemens HR Service delivery AA (Asia, Australia) HRs Service Management CHR Governance EMEA (Europe, Middle East, Africa) HRs AM (Americas) HRs GEM Service Delivery will remain with the countries Shared Service Initiative • Strategy • Control • Account management • Business development • Product management • Supplier management • Administration Service Delivery • Processing Source: top+ Shared Service Initiative, CHR

18. GEM Steering Board CP SPMC PG HR5 (CPD) Service Delivery CP CF Global IT-platform EMEA HR’s(Delegation Consultant) Asia HR’s(Delegation Consultant) Americas HR’s(Delegation Consultant) GEM is governed by CP and managed by CP SPMC and E HR CPD Current delivery model and key principles Global Service Delivery Model for GEM Responsibilities • Overall GEM strategy & targets & budget approvals • Auditing & controlling • GEM Policy governance & process ownership Governance Structure Service Model1) Governance CF CP GEM Steering Board • Tax governance GEM Service Mgmt. CP SPMC PG HR5 • Global customer strategy alignment • Coordination of CPD & home / host delegation processing • GEM strategy & target & budget • Global service delivery standards • Performance feedback & controlling Regional ServiceMgmt. Asia Regional Service Mgmt. Americas Regional Service Mgmt. EMEA Service Mgmt. • Process management • Vendor, policy & IT management • Performance monitoring • Compliance/Risk controlling Service delivery • Delegation processing and BU consulting remains as of today • Mandatory processes and IT tool due to compliance risks and SOA • Global Tax Advisor Global Tax Advisor Groups & Operating Companies / Delegates 1) According to definition of Siemens Shared Service Initiative Source: GEM Project

19. 72% Service management board (Global Responsibilities) Service management (Regional Responsibilities) Service delivery (HR , GROC Shared Service ) GEM Governance1 Clear roles and responsibilities were critical for the new service delivery model Key responsibilities for the GEM organization • Policy governance • GEM strategy • Vendors • Service Portfolio • Service Levels • etc • Performance tracking • Compliancemonitoring (visa, immigration, tax, policy) • Issue resolution • Controlling, auditing • International coordination of all GEM services • Service portfolio, • Quality management (KPIs) • etc • Coordination between corporate functions and regions • Customer satisfaction monitoring • Issue resolution/escalation • Benchmarking • Risk management • Vendor management • Process Management • IT Management • Support for Country Policy implementation • Establishment and maintenance of a delegation consultant network in the region • Professional lead of delegation consultants in countries of the region (dotted line) • Training, coaching of delegation consultants in countries • Change Request Management • Escalation management (regional level) • Customer satisfaction2 - KPI reporting, cost reporting (regional level) • Vendor management (regional level) • Risk management, compliance tracking (regional level) • legal, tax, policy • Administration & operational services • Delegation Processing, such as: • Policy Interpretation • Delegate briefing and relocation co-ordination • On assignment administration • Tax administration • Expense authorization • Business Administration: • Payments, invoicing, accounting 1) CP W and GEM Steering Board 2) BU and end-customer Source: GEM Project

20. Technology implemented – Access via GEM employee portal Availability of GEM Application IHRIS in the Employee Portal Employee Portal - GEM IHRIS Applications are available in the global Siemens Intranet Portal after PKI Login: • My Work >> Personnel Development >> Global Expatriate Management 3 IHRIS Applications: • Delegation Administration System (KPMG LINK E) • Target Group: Delegation Consultants worldwide • Access rights: Application via Account Order Form (https://sfsnet.siemens.com/livelink/livelink.exe/Open/20204504) • Availability: PILOT – 14.1.2008 • Delegation Order System (DOS) • Target Group: HR / BU Manager (to order services with the delegation centers) • Access rights: all employees globally • Availability: After GO LIVE • Travel Diary / Tracker for delegates • Target Group: Delegates • Access rights: Delegates that have an ACTIVE assignment in KPMG LINK E • Availability: GO LIVE – 11.02.2008

21. DOS – Process Overview Overview main workflow functionalities Automated upload into IHRIS every 1 hours Automated Email Submit Delegation Centre Home KPMG LINK Creator (line manager) Automated Email Forward Edit Rights Delegation Centre Host Print out a hardcopy and sign before sending to delegation centre Contributors (line manager)

22. Key Challenges faced during transition • Communication to and acceptance from key stakeholders • Speed and depth of change • Training of team + ongoing support • Interface management (other delegation partners, payroll) • Customers enhanced focus on cost/more for less • Changes at same time as enhanced focus on compliance internally • Increase in internal/external audits • Increase in legislative changes (e.g. PBS) • Transition to global providers

23. Key Challenges faced during transition • Major restructure of Siemens organisation and HR organisation • Requirement to take on “residual HR activities” • Set up of Global Shared Services organisation • Cost reduction programme – FTE reduction • Transition of acquired businesses to Siemens process/policy • Non standard delegations/requests • Increase in M&A / Divestment activity within Siemens

24. Global Expatriate Management (GEM 2) 1) International Business Traveller project 2) Centre of competence - set up 3) Optimisation of service delivery – regional hub set up

25. Why bundle international delegations service delivery? • Enhance quality of service, reduce risk whilst lowering cost through implementing a regional hub structure • Ensure adherence to local laws and regulations in home and host country • Ensure higher level of process standardization • Reduce delegation administration cost through economies of scale • Improve service quality with dedicated international delegation team • Ensure implementation of Siemens regulations & processes

26. Customer 1 Customer 2 Local Delegation centres Customer 3 Customer 4 Current versus future scope of service provision- example NWE Current model – delegation service delivery in each country Future model: one delegation hub SwedenHR UKHR DenmarkHR Norway HR NWE Hub Ireland HR FinlandHR Netherlands HR Poland HR • Service focus on country specific needs • smaller countries: no dedicated delegation FTE, but split FTE • No bundling, each country manages delegations separately • Service focus on international needs and standardization • Clear separation of country specifics to international services for delegations • Bundling delegation activities within hub

27. 2.965 Different roles will be present in the Hub to secure a high service quality - Overview Hub Roles Hub Lead Business support Key Account coordinator 2 Policy expert Partner / customer trainer Delegation consultant Delegation manager • By country • Inbound • Outbound • Home/Host • CPD ICS /SOA Officer Project consultant3 Knowledge coordinator IT Key user Support functions Business Ad-ministrator Process manager 2 Process owner2 Business administration Manager Core Business Tax expert1 Social sec. expert1 Delegation Administration Manager Delegation Administra-tor Contract/ Vendor Mgmt Immigration expert1 Legal expert1 Business administration / Delegation administration Specialist Functions / Interfaces Service Delivery Management 1 General expertise and interface to local experts within countries 2Could be Delegation Manager 3Depending on the organizational asignment of the CoC (Center of Competence)

28. Next steps for consideration • Implementation of regional hubs: Americas (North/Latin America) Europe, Middle East and Africa Asia, Australia • Implementation of Regional Governance + Regional Service Delivery Management - Delegation Services versus Delegation Advisory