Managing a Mega Programme –

Kay Vaughan Siemens PLC

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

Siemens - Committed to profit and growth

Active in three Sectors Revenue by region

Revenue and employees

100,000

80,000

60,000

40,000

20,000

500

400

300

200

100

20001985 1990 1995

Revenue in millions of euros

FY

As of September 30, 2008

Continuing operations

(in millions of euros)FY2008 FY2007

Revenue 77,327 72,448

New orders 93,495 83,916

Income 1,859 3,909

Free cash flow 5,739 6,755

Employees 427,000 398,000

Americas

Germany

Europe, CIS,Africa (excl. Germany)

17%

36%26%

21%

2008

Key figures

Employees in thousands

Asia, Australia, Middle East

Location of customer

7.7 %

Healthcare€11.2 billion

Energy€22.6 billion

49%

29%

14.3%

Industry€38 billion

Cross-Sector Businesses

€6 billion

Global presence – basis for competitiveness

As of September 30, 2008

Germany 32% 23%Europe, CIS, Africa(excl. Germany)

Americas Asia, Australia, Middle East

Employees

Revenue (billions of euros)

Major facilities

23% 26%

97,600 20.1 6831%

132,000

12.8 48

17% 28% 36%

28.054118,400

18% 21%

79,000 16.4 49

Sectors and Divisions: Industry

Energy Healthcare

Fossil Power Generation Renewable Energy Oil & Gas Energy Service Power Transmission Power Distribution

Imaging & IT Workflow & Solutions Diagnostics

Industry

Drive Technologies Industry Automation Building Technologies Mobility Lighting (OSRAM) Industry Solutions

Divisions Divisions Divisions

Sectors

Cross-Sector Businesses

Siemens Financial Services New orders / Innovations

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.

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.

Siemens IT Solutions and Services

Main UK locations

Offices

Worcester

Manufacturing / Offices

Glasgow

Durham

Newcastle,Hebburn

Nottingham

ManchesterBlackpool

Congleton

Milton Keynes

Slough, Stoke PogesLondon, Sunbury

Frimley

Romsey

Poole, Christchurch

Crawley

Eynsham, Oxford

Harrogate

Leeds

Belfast

Lincoln

Headquarters

Monmouth

Tonbridge

AshbyNewtown

Stroud Aylesbury,

Bradford

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

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

Services

IDU Helpline - the delegate equivalent to ‘999’

Core Delegation Services provided by IDU

Language / InterculturalTraining

School SearchAssistance

TenancyManagement

Orientation

ExpatriateBanking

ExpatriateAccounting

CostCalculations

RemunerationSupport

ContractualSupport

TaxSupport Advice on medical

requirements / vaccinations

Pension / SocialSecurity Advice

SAP HRSupport

Consultancy / advice to businesses

Non-delegate support(tax, NI, pension)

Removals / relocation

Spousal / PartnerSupport

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)

Current major delegation centres within Siemens

Brazil

USA

India

China

Great Britain

Germany*2

1

Austria

Delegation experts within 73 countries – all trained in global tool / processes / policy

Dubai

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.

Global Delegation Principles (GDP)

A: Principlesglobal framework

B: Guidelinesdetail supporting global principles

Localization and CustomizationLocalization and Customization

Country DelegationGuidelines (CDG)

Each country has developed Country Delegation Guidelines

in accordance with GDP

Policies: GDP versus CPDPEmployment in the interest of Siemens outside the home country for a specified period of time

Global Delegation Principles (GDP)

Construction / Project Delegation Policy (CPDP)

Duration6 month, maximum 4 years1

Know-How TransferExecution of a specific functionPersonnel developmentFurther education measure

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 managementInstallationMaintenanceModificationConsultingCommissioningServicing

Location ofemployment

contract

SpecificConditions

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 Committee2) if delegation < 6 months, administration according to CPD Home Guideline

Type ofActivity

Home baseddelegation

Exceptional case, only whenthe employee is exclusivelyworking for the home country

Host basedCPD

Tax concept, immigration law orother legal regulations requirean employment contract in thehost country

Delegation period > 6 months2

Host baseddelegation

Standard case

Home basedCPD

Standard case

Considerations prior to launch of Global Expatriate Management Programme at Siemens

Expatriate Management Trends and Implications – trend towards standardisation and global service delivery models

General

Increase focus on:

Compliance, Controls, Coordination, Consistency, Competitiveness

Growth in expatriate population diversity (ie. varied types and nature of assignments)

Expatriate Service Delivery Management

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

Market Trends

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

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

Source: top+ Shared Service Initiative, CHR

Service Management

Account management

Business development

Product management

Supplier management

Administration

Governance Strategy

Control

Service Delivery Processing

Shared Service Initiative

HR Shared Services for Siemens

CHR

HR Governance

Service Management

AM(Americas)

HRs

EMEA(Europe,

Middle East, Africa)

HRs

AA(Asia,

Australia)

HRs

HR Service delivery

GEM Service Delivery will

remain with the countries

GEM is governed by CP and managed by CP SPMC and E HR CPD

Current delivery model and key principles

1) According to definition of Siemens Shared Service Initiative

Source: GEM Project

Global Service Delivery Model for GEM

CP

Responsibilities

GEM Steering Board

CP SPMCPG HR5 (CPD)

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

Overall GEM strategy & targets & budget approvals

Auditing & controlling GEM Policy governance &

process ownership

Global customer strategy alignment

Coordination of CPD & home / host delegation processing

GEM strategy & target & budget Global service delivery standards Performance feedback &

controlling

CF Tax governance

GEM Service Mgmt.

CP SPMC PG HR5

Regional

Service Mgmt.Asia

Governance Structure

Service Model1)

Governance

ServiceMgmt.

CP

Regional

Service Mgmt.Americ

as

Regional

Service Mgmt.EMEA

GEM Steering

Board

CF

Service delivery

Groups & Operating Companies / Delegates

Global Tax Advisor

Global IT-platform

Americas HR’s(Delegation Consultant)

Asia HR’s(Delegation Consultant)

EMEA HR’s(Delegation Consultant)

Clear roles and responsibilities were critical for the new service delivery model

Key responsibilities for the GEM organization

GEM Governance1

Policy governance GEM strategy

Vendors Service Portfolio Service Levels etc

Performance tracking Compliance

monitoring (visa, immigration, tax, policy)

Issue resolution Controlling, auditing

Service management board

(Global Responsibilities) 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

Service management (Regional Responsibilities)

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

1) CP W and GEM Steering Board 2) BU and end-customer Source: GEM Project

Service delivery (HR , GROC Shared

Service ) 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

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

DOS – Process Overview

Overview main workflow functionalities

Creator

(line manager)

Contributors

(line manager)

Forward Edit Rights

KPMG LINK

Submit

Automated upload into

IHRIS every 1 hours Delegation Centre

Home

Delegation Centre Host

Automated Email

Automated Email

Print out a hardcopy and sign before

sending to delegation centre

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

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

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

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

Current versus future scope of service provision- example NWE

Current model – delegation service

delivery in each country

Future model: one delegation hub

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

Ireland HR

NorwayHR

SwedenHR

PolandHR

DenmarkHR

UKHR

NetherlandsHR

FinlandHR

NWEHub

Customer 2Local

Delegation centres

Customer 1

Customer 3

Customer 4

Tax expert1

Social sec.

expert1

Delegation manager

IT Key user

Core Business

Policy expert

ICS /SOA Officer

1 General expertise and interface to local experts within countries2 Could be Delegation Manager 3Depending on the organizational asignment of the CoC (Center of Competence)

Different roles will be present in the Hub to secure a high service quality - Overview Hub Roles

Specialist Functions / Interfaces

Key Account

coordinator 2

Service Delivery Management Business administration / Delegation administration

Business administr

ation Manager

Delegation

Administra-tor

By country-Inbound -Outbound-Home/Host-CPD

Delegation consultant

Support functions

Contract/ Vendor Mgmt

Project consultant

3

Partner / customer

trainer

Process manager 2

Process owner2

Knowledge

coordinator

Immigration expert1

Legal expert1

Business Ad-

ministrator

Business support

Hub Lead

Delegation

Administration

Manager

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