Business Optimization Through Information & Analytics

© 2010 IBM Corporation

Business OptimizationThrough Information & Analytics

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Building a Smarter Planet

Introductions

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Getting Started

Our Smarter Planet and the Information Challenge

Today’s Topics

Applying Information & Analytics In Your Organization

Achieving Business Optimization



The world is changing and becoming more…

The resulting explosion of information creates a need for a new kind of intelligence

… to help build a Smarter Planet

Instrumented

Interconnected

Intelligent



Many Organizations are Operating with Blind Spots;Those Applying Information & Analytics are Breaking Away

1 in 3Business leaders frequently make decisions based on information they don’t trust, or don’t have

1 in 2Business leaders say they don’t have access to the information they need to do their jobs

Predict and prepare for the future by evaluating trade-offs proactively

15X

Industry Top performers

Industry Under performers

Top Performers Demonstrate Expertise

Source: IBM: Break Away with Business Analytics and Optimization Study



The Key is Leveraging Information and Analytics Informed, Real-time Decisions at the Point of Impact…

Sense and respond

Instinct and intuition

Automated

Skilled analytics experts

Back office

Predict and act

Real-time, fact-driven

Optimized

Everyone

Point of impact

BreakawayApproach

Lack of Insight

Inability to Predict

Inefficient Access

Variety

Volume

Velocity



Mobile County Public Schools: Real-time analytics more effectively measures student performance and will immediately identify “at risk” students

Mobile Service Provider: Analysis of social relationships prevents customer churn and identify new products

CenterPoint Energy: First-of-a-kind outage detection and self-healing within the grid of an intelligent utility network

University of Ontario Institute of Technology: Early detection of potentially life-threatening conditions in premature infants

The Result: Organizations Have the Insight to Act with Confidence.

http://old.ccsb.ca/um/images/UofOntario-in-Oshawa-005.jpg



2XClient Investment in

Business Analytics & Optimization Projects is Growing over Twice as

Fast as Business Automation

Automation

BusinessOptimization

Information& Analytics

Transforming Business Through Information and AnalyticsAs Significant as ERP & CRM…

Creating Value Lowering Costs



Transforming Business Through Information and Analytics

Reduction in storage space

Savings through modernization of core business applications

$60M

Reduction in loan processing cycle time60%

Improvement in supply chain performance

50%

Reduction in recall probability

Decrease in unplanned outage time

30%

50%

50%



Accelerating Business Optimization…

An Industry Context & Technology Innovation to

Accelerate the Journey



Information Agenda A proven, industry-specific approach for aligning information with business objectives

Establishend-to-end vision &

business-driven value

Align people, process &

information

Accelerateprojects for

short& long-term ROI

Architectan extensible information

infrastructure

Create Value

LowerCosts



Guides, Workshops,Accelerators, Roadmaps…

Information AgendaStrategy, Roadmaps, Information Agenda Guides

Information AgendaGuide for Banking & Finance



Smarter Business Outcomes With Information Agenda Strategy, Roadmaps - Information Intensive Projects

Connect the roadmap to a reference architecture

Raise maturity of information usage over time

Develop an adoption roadmap for the organization



Rooms To Go: Increased sales by helping staff optimize floor planning based on customer buying habits; save $120k/yr through self-service reporting.

Portugal Telecom: Streamlined over 150 business processes, savings millions of Euros in IT cost while improving productivity.

Kaiser Permanente: Developed enterprise-wide strategy for clinical data management, consolidating member data while ensuring control and security.

Irish Life & Permanent: Improved cross-sales, created new services, improved customer satisfaction and reduced costs via MDM initiative.

Businesses Planning Their Information Agenda



Accelerating Business Optimization

Meet new throughput, scalability, reliability and data protection requirements while controlling costs.

Create a single, trusted view of information across the organization managed over a strategic period

Optimize processes, manage business performance, and anticipate opportunities and threats

Analyze and use information at the point of industry-specific business impactCreate

Value

LowerCosts



Accelerating Business Optimization (continued)

Create a single, trusted view of information across the organization managed over a strategic period



Value

LowerCosts






Value

LowerCosts





Value

LowerCosts




Create Value

LowerCosts



A Flexible Information Platform

Expanding Technology$11B in Acquisitions Since 2006Over 10,000 Technical ProfessionalsOver 15,000 New ClientsOver 2,300 New Partners

Create Value

LowerCosts



Bharti Airtel: Transformed infra-structure, reducing new account time for by 90% while enabling addition of 2.5-3M new subscribers a month.

JB Hunt: New business process management system returns $1M annually through real-time visibility into business.

Coca-Cola Bottling: Replaced Oracle with IBM DB2, lowering costs and storage by 40% and manufacturing run duration by 65%.

Building a Flexible Information Platform

Geisinger Health System: Integrating real-time clinical data with medical history to create a massive storehouse of intelligence.



Workload Optimized Systems and ServicesDesigned, integrated systems provide a foundation

Power7Accelerators

IBM Smart Analytics Optimizer for DB2 for z/OS

CloudBurst Smart Analytics Systems

Scale Out NAS

System technology enhancements that hone capabilities for specific workloads

Integrated hardware and software solutions, optimized for specific workloads

SystemOptimizers

Smart Business Systems

Power7 System x

A choice of architectures – servers and storage – each fit for purpose

DS8000 XIVSystem z

General Purpose

Platforms

InformationArchive

StorageVirtualization



Taking it to the Next Level with Business Analytics

Create Value

LowerCosts



US Lumber: 3,623% ROI through improved productivity, reduced inventory, accelerated accounts receivable turnover.

Martin’s Point Health Care: 1,185% ROI through BI competency center that reduced reporting demands and improved user productivity.

Blue Mountain: 1,822% ROI by eliminating excess inventory, improved reporting, more strategic pricing decisions.

Delivering Insight and ROI Through Business Analytics

Swedbank: Reduced loan processing time from 6 days to 20 minutes by automating decisions using predictive analytics.



Taking it to the Next Level: Predictive Analytics

Center for Disease Control Characterizes disease & quickly assess medical needs in real-time

Cablecom GmbH Doubled ability to predict churn & reduced actual churn 10 fold

Infinity Property & Casualty CorporationReal-time claims scoring starts fraud investigations within 24hrs. vs. 2 weeks

Richmond County Police pinpoints hotspots & leads to 20-30% decease in violent crimes



Taking it to the Next Level: Content Analytics

NTT DoCoMo Content Analytics over “Voice of Customer” data creates insight driving customer-oriented decisions

Kraft Content Analytics over online customer postings helps target & deliver new campaigns, increasing sales & loyalty

University of Ontario Institute of Technology detects life-threatening conditions in infants up to 24 hrs earlier

Large Claims 3rd Party AdministratorContent Analytics over claims detects fraud faster, reducing costs by millions



Taking it to the Next Level – Packaged Analytics

Packaged Business Intelligence for Line of Business …

Ready-made reporting and analysis that consistently measure performance

departmentally and across the enterprise

Create Value

LowerCosts





Taking it to the Next Level: Information Governance Optimizing the Information Supply Chain

Announcing Comprehensive Offerings for Information Governance

These offerings are part of an ongoing investment in information governance.

Preview in Q1

GA in March

GA in March

Available Now

InfoSphere Business Information Monitor

Optim Data Redaction

Global Business Services Information Governance Assessment and Implementation Services



Taking it to the Next Level: Industry by Industry



Taking it to the Next Level: With Experts from IBM…

BI & Performance Management

Advanced Analytics & Optimization

EnterpriseContent Management

Enterprise Information Management

BAO Strategy

Business Know-HowStrategy & Change,

5,000 DedicatedConsultants



Pre-optimizedBusiness Intelligence Software

triples out of the box performance*

* Based on IBM Laboratory Tests. Actual results may vary depending on specific environment and configuration.

Powerful Data Warehouse Warehousing Platform Advanced Workload Management System Automation

Analytics Software Options Business Intelligence Capabilities Cubing Services Text and Data Analytics

Hardware & Services Server Platform Storage Capacity Build, Deploy, Health Check &

Premium Support Services

Putting it All Together…IBM Smart Analytics System



We’ve Only Just Begun to Uncover What is Possible on a Smarter Planet.

With the information organizations already have and new analytical tools, there are no limits to what is possible

Real-time Trading Positions

Real-time Risk Analysis

M&A Agility…

Withholding Tax Optimization

How can you use information and analytics to transform your organization?



Over $11B in acquisitions since 2006

Over 10,000 technical professionals

Over 5,000 Dedicated Consultants

Largest Math Department in Private Industry

Over 2,300 new Business Partners since 2006

IBM is Investing to Accelerate Business Optimization

“Since 2006, IBM has deliberately & doggedly constructed an unparalleled portfolio… it's difficult to see how any competitors will be able to compete anytime soon…”



Start the Transformation Today.Ask Yourself:

How can I align my information with my business strategy?

How can I manage my information as a trusted, strategic asset?

How can I deliver the insight neededfor informed decisions and actions?

Take the Information and Analytics Self Assessment

Contact your IBM Representative

Learn more: ibm.com/new-intelligence

https://secure.synapsegroup.com/ibm/assessment/

https://secure.synapsegroup.com/ibm/assessment/



Product and Service Innovation

Information & Analytics

Next-generation Datacenter

Smarter planet: Thinking and acting in new ways to make our systems more efficient, productive and responsive.

People and Process Transformation

Smart Industries & Cities

Sustainability Security and Resiliency



Innovation That Matters$11B USD in Acquisitions Over 10,000 Technical Professionals

Autonomic Operations

Developer Productivity

Deep Compression

pureXML

pureScale

Pervasive Content

Stream Computing

Content Analytics

Advanced Case Management

Smart Analytics Systems

Social Analytics/Consumer Insight

2010

2006



Large agri-business company consolidated transactional financial data into standard, reliable management reporting

Faster Insight: Smarter Decisions with Packaged Analytics

Oil & Gas international company projected $2-$5M in savings with consolidated analysis of spend

Manufacturer pinpointed sales territory that was discounting too heavily and impacting revenue

Chicago-based insurance firm provided managers with consistent reporting and analysis to assess employees’ performance



Volume 988 exabytes: The amount of digital information that will exist in 2010, equal to a stack of books from the sun to Pluto and back…

Variety 80% of new data growth is generated largely by email, with increasing contribution by documents, images, and video and audio.

Velocity77% of executives say they do not have real-time information to make key business decisions.

We are Producing an Explosion of Information…

Source: Various IBM and Public Studies



…While Forward-Thinking Organizations Distance Themselves From Their Competitors

Challenging

Disrupt the status quo to improve the business and create new opportunities

Empowered

Enable and empower employees to analyze,

decide and act

Anticipating

Predict and prepare for the future by

evaluating trade-offs proactively

21.9X5.6X

15X

Chart shows differences at the highest achievement levels

Key: Top performers (i.e., 1st quintile relative to industry peers)

Lower performers (i.e., 4th and 5th quintile relative to industry peers)

Relative difference of top performers to lower performers

32.5%

1.5%

22.7%

1.5%4.4%

25%

Source: Breaking Away with Business Analytics and Optimization: New intelligence meets enterprise operations at www.ibm.com/gbs/intelligent-enterprise.

Key Advantages

Winning CharacteristicsHigh quality information

Strong decision support

Keen focus on driving business

change

http://www.ibm.com/gbs/intelligent-enterprise



Physician Telco Call Center Rep

Loan Officer Retail Sales Associate

…predict infection in premature

newborns 24 hours earlier?

…apply social relationships of

customers to prevent churn?

…adjust credit lines as

transactions are occurring to

account for risk fluctuations?

…determine who to offer discounts

at time of sale instead of

offering to all?

Imagine if you could…



Considerations and dependencies

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Trademarks and notes

IBM Corporation 2009

IBM, the IBM logo and ibm.com are registered trademarks, and other company, product or service names may be trademarks or service marks of International Business Machines Corporation in the United States, other countries, or both. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml

Adobe, the Adobe logo, PostScript, the PostScript logo, Cell Broadband Engine, Intel, the Intel logo, Intel Inside, the Intel Inside logo, Intel Centrino, the Intel Centrino logo, Celeron, Intel Xeon, Intel SpeedStep, Itanium, IT Infrastructure Library, ITIL, Java and all Java-based trademarks, Linux, Microsoft, Windows, Windows NT, the Windows logo, and UNIX are trademarks or service marks of others as described under “Special attributions” at: http://www.ibm.com/legal/copytrade.shtml#section-special

Other company, product and service names may be trademarks or service marks of others.

References in this publication to IBM products or services do not imply that IBM intends to make them available in all countries in which IBM operates.

http://www.ibm.com/legal/copytrade.shtml

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Evaluation

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On a scale of 1 – 5, where 5 is “extremely well” and 1 is “not at all,”…

[_____] How well did this presentation answer your questions?

– What was most helpful? _____________________________________________________________________________________________________________________________________________________________________________________________________________________

– What was missing? _____________________________________________________________________________________________________________________________________________________________________________________________________________________

[_____] How much will this presentation contribute to your buying decision?

– Presenter’s name: ________________________________________________________

Do you have any suggestions for improving this presentation?

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PRESENTER GUIDANCE: Financing scenarios and advice. DELETE BEFORE PRESENTING (1 of 4)

Slide notes (best practices)

• Select from IBM Global Financing slides listed below (available in SAM).

• Contact Theresa Marshall/Rochester/IBM if you have questions or need assistance in developing a customized financing solution to meet your customer’s needs.

Financing category Target audience Financing scenario

1. Always select this slide:

IGF overview Companies of all sizes in all industries; LOB managers, IT managers, CFOs

IT and non-IT, all brands of hardware and software, and IBM services

2. Then add one of the following optional slides:

IBM Financing Advantage: More important than ever Affordable, Simple, Accessible, Complete

Small and medium businesses;otherwise, same as IGF overview All brands of hardware and software, and IBM services

Project Financing Same as IGF overview Financing of IT solutions from hardware, software & services

PC Leasing Same as IGF overview Personal computers—all brands

Software Same as IGF overview Software—all brands

Asset Recovery Solutions Same as IGF overview IBM and non-IBM PC assets, printers and displays

Commercial Financing SMB & larger accounts, with focus on revenue greater than $20 million

Provides working capital and supply chain financing for IBM clients and Business Partners

IBM Certified Pre-owned Used Equipment Same as IGF overview cost-effective alternative to new when matching, upgrading

or adding to your present IT portfolio

Vendor Financing -overview Potential new vendor alliances Financing options that potential vendor alliances can extend to their customers and partners

Vendor Financing Potential new vendors alliances Financing options that potential vendor alliances can extend to their customers and partners

https://prod.salesassetmanager.com/ibm/





Customer Centre Same as IGF overview

Provides customers who lease their assets through IBM with a secure, online lease management tool for tracking and managing all leases associated with those assets.

Green Data Center Same as IGF overview

Financing of single components or an entire project covering hardware, software and services from IBM and other vendors; environmentally friendly asset disposal of retired IT equipment; and IBM Certified Used Equipment™.

Financing your green initiatives Same as IGF overview

Offers clients a complete portfolio of financial services and rates our competitors can’t match.

Global Asset Recovery Services (GARS)

Same as IGF overview

Offers comprehensive services for used hardware, including resale and disposal.

Hardware Financing Same as IGF overview

Helps clients lower the cost of technology acquisition, better manage technology acquisition process and facilitate management of technology assets throughout the lifecycle.

IBM Global Financing benefits throughout the IT lifecycle


A 3-year technology refresh cycle based on leasing can ensure that you have upgrade flexibility to meet both your growing IT & business demands without impacting your current budget.

Affordable, non-disruptive migrations to the latest IBM technology


Clients can apply their current system’s fair market value to an “Exchange” POWER™ System server or System z™ Hybrid.

Slide notes (best practices)– Select from IBM Global Financing slides listed below (available in SAM).

– Contact Theresa Marshall/Rochester/IBM if you have questions or need assistance in developing a customized

financing solution to meet your customer’s needs.









Funding your migration to IBM Same as IGF overview

Clients can take advantage of IBM Global Financing capital to fund their migration to IBM technology.

Sale-leaseback Same as IGF overview

Clients can sell their existing equipment and transfer title of ownership to IBM Global Financing at the fair market value price and then lease the equipment back at regular, low monthly payments over a flexible payment period with sale leaseback.

IBM Global Financing mid-lease restructuring for upgrades can accelerate budget approvals for clients considering a move to new equipment


Leasing upgrades leverage client's initial IBM investment, eliminate obsolescence risk and drive lower total cost of ownership.

Mid-lease upgrade example: Significant price performance improvement with little or no impact to existing budget


Existing leasing clients upgrading to POWER6 can in many cases maintain their monthly payments (with little or no change) and obtain the latest POWER6 technology.

IBM Global Financing – Strength in numbers


Use the financing option as a trigger to close new engagements when financing services and solutions to help to overcome a client’s budget constraints.









Enterprise IT Financing Facility Same as IGF overview

An IT Facility is a multi-year agreement that consolidates multiple invoices, smoothes the cost of IT investments and provides for a committed global credit line.

Optimize Total Cost of Ownership with an IT technology lifecycle strategy


A technology lifecycle strategy may include energy-efficiency aspects, business transformation events, IT optimization or consolidation projects or just a technology refresh to reduce costs.

IBM Global Financing helps clients to… Same as IGF overview

IBM Global Financing helps clients to optimize Total Cost of Ownership throughout the entire technology lifecycle.

Leasing helps… Same as IGF overview The benefits to clients of leasing with IBM Global Financing.

IBM Open Infrastructure Offerings Same as IGF overview

For enterprise clients who are partnering with IBM on large infrastructure projects, IBM can assemble an Open Infrastructure Offering (OIO) that combines hardware, software, professional services, maintenance, financing and disaster recovery into a single customized agreement




IBM Global Financing at-a-glance

Client Financing CommercialFinancing

Provides working capital and supply chain financing for

IBM Clients and Business Partners

Global AssetRecovery Services

Offers comprehensive services for used

IT assets, including resale, buyback and

recycling

IBM and non-IBM: Hardware Software Services

IBM Global Financing

Total Solution Approach

Provides financing (leases and loans) for the acquisition of

solutions and technology

Experts in financing technology and solutions

Focuses primarily on solution and

technology financing Provides single-source financing

that helps clients acquire business services and technology services, hardware and software ― IBM and non-IBM

Flexible financing with competitive rates to businesses of all sizes and across all industries

Complete financial plans for the lifecycle of the investment



IBM Financing Advantage: Affordable, Simple, Accessible, Complete

Access to funding is a major impediment to realizing a solution’s post-implementation benefits.

Costs are heaviest at the front end of a project, while benefits do not fully accrue until a project is well underway.

This makes financial justification difficult.With IBM Financing Advantage, you can overcome this

challenge.

Financing allows costs and benefits to track more closely. IBM Financing Advantage can help to reduce up-front costs

and structure your monthly payments to anticipated benefits.

This can help ease the decision to invest in solutions that have longer payback periods.

Clients are feeling pressure to do more with less and get more value from their infrastructure investments. A smarter funding strategy can help you meet budget and cash flow objectives in a capital-constrained environment.

IBM Financing Advantage, from IBM Global Financing, offers credit qualified mid-sized companies access to affordable leases and loans for a complete IT solution for both IBM and non-IBM hardware, software and services.

Financing helps clients meet budget and cash flow objectives in a capital-constrained environment by:

Providing predictable monthly paymentsPreserving cash flow for higher-yield investments Allowing more acquisitions within current budget Accelerating implementation of new technology Matching payments to business needs



IBM Project FinancingTM

Client Benefits

Turns up-front costs into affordable and predictable payments Aligns payments with anticipated benefits Speeds project approval, and preserves cash flow and credit lines Develops a tailored funding solution through our comprehensive financing

facility for:

– All project elements and phases

– Both IBM and non-IBM hardware, software and services

Customized deal structures targeted at business benefits

– Self-funding project based on anticipated benefits

– Payments timed with project milestones

Customized, all-inclusive financial package for infrastructure solutions, services and business transformation projects

Cost of the project

Benefits of using the new solution (ROI)

$

IBM Global Financing payments



IBM Global Financing:The Solution to Your PC Lifecycle Management Strategy

IBM Global Financing has developed a broad portfolio of programs and tools to assist you in navigating the four phases of the PC Lifecycle… From planning to disposal:



Leverage your project budget and help simplify solution acquisition with IBM single-source software financing.

IBM Global Financing software financing offers you:

100 percent “soft” financing

– No hardware is required, unlike with many other vendors.

Customized payment options designed to provide value

– Develop the IT solutions you need today, with more budget buying power.

– Match your software costs to benefits.

– Preserve cash for other strategic investments.

Simplified software solution acquisition with single-source financing

Learn more at: www.ibm.com/financing

http://www-03.ibm.com/financing/us/



Global Asset Recovery Services can help you dispose of unwanted IT assets--easily and affordably through IBM Asset Recovery Solutions!

Help determine competitive market value for marketable assets through our buyback offering

Facilitate environmentally friendly disposal for non-marketable assets

Can help provide protection of confidential data stored on hard drives through our Disk Overwrite services

Complete logistical services including packing and transportation

Available for IBM and non-IBM personal computer (PC) systems and accessories in countries that sell IBM and Lenovo systems



Commercial Financing

Why IBM Global FinancingWhile credit is tight everywhere else, IBM Global Financing can provide your company with working capital and channel financing to support day-to-day operations or grow your business. Our innovative funding can help your business stay afloat, maintain a healthy balance sheet and minimize risk during today’s economic environment.

What we offer Inventory Financing — Obtain up to 90-days worth of interest-free financing for acquiring

products from your suppliers. We offer lines of credit with over 100 suppliers whose products and services cover the gamut in technology and information technology.

– With Channel financing, you get relief from the cash crunch and an overall expansion of business credit, potentially yielding significantly greater volumes and profits.

Receivables Financing — Open up cash flow by borrowing against available collateral such as accounts receivable and inventory. Choose the offering that best suits your company’s needs and financial strategy:

– Revolving Lines of Credit - Asset-based loans that use accounts receivable and inventory to secure cash advances to meet your working capital needs

– Receivables Purchase - Get immediate cash from IBM Global Financing by selling your receivables from pre-qualified clients

– Large Sale Receivables Financing - Obtain bridge funding to help you accommodate larger orders-for up to 100 percent of the order purchase amount and with no interest charges for up to 30 days. Structure your repayment terms to match your collection of the receivables `

Learn more at: ibm.com/financing/us/comfinGFP03051-USEN-00

http://www.ibm.com/financing/us/comfin

http://www.ibm.com/financing/us/comfin



IBM Certified Pre-owned Equipment is the cost-effective alternative to new when matching, upgrading or adding to your present IT portfolio

Fully refurbished and tested to IBM standards IBM maintenance qualified Current and prior-level technology solutions at a fraction of the original price Selected models include 1 or 3 years’ maintenance 90-day satisfaction guarantee with IBM maintenance contract (system may

be replaced or refunded at IBM’s discretion if equipment is unsatisfactory) Availability of selected IBM Pre-owned Equipment which is provided with the

same warranty as new equipment and is priced slightly higher than IBM Certified Pre-owned Equipment

Acquisition: Less stringent credit requirements for purchase or financing of IBM Certified Pre-owned Equipment

Short-term rentals are available for IBM Certified Pre-owned Equipment Wide range of equipment available off the shelf or custom-configured,

including:– Intel®-based servers: Netfinity®, xSeries® and System xTM

– Midrange servers: AS/400®, iSeries® and System iTM – UNIX® servers: RS/6000®, pSeries® and System pTM – Mainframe systems: S/390®, zSeries® and System zTM – Storage: disk and tape systems– Printers and networking hardware



Vendor Financing - Overview

IBM Global Financing has been expanding its reach by developing key alliances with several vendors

– These alliances provide the vendors with an array of financing options that they can then extend to their customers and partners

– This gives customers more funding options, and allows them to turn large up-front costs into an affordable and predictable monthly payment

IBM Global Financing has signed agreements with the following vendors:

– APC-MGE

– Motorola Enterprise Mobility (previously Symbol Technologies)

– Lenovo

– Juniper Networks

– InfoPrint Solutions Company



Vendor Financing

Target Audience

Pain Points Benefits of IBM Global Financing

Vendor customers

Budget constraints

Difficult to accurately calculate and manage technology spend

Obsolete equipment

• Acquire one-stop financing for hardware, software and services, including IBM or any other IT vendor

• Turn large up-front costs into an affordable and predictable monthly payment

• Match costs to project milestones

• Minimize the risk of technology obsolescence

• Manage all equipment recycling, disposal and data cleansing

• Manage the transition to next generation IT solutions as and when business needs dictate

• Preserve cash and credit lines for strategic investments



Customer CentreManage your IT leases online to simplify administration and reduce costs

If your enterprise leases assets through IBM Global Financing, you can take advantage of Customer Centre, our secure, online lease management tool for tracking and managing all leases associated with those assets.

We can help you manage your leased assets easily with:

– Secure access to your detailed lease information

– Comprehensive search and online reporting capabilities

– Convenient, customizable ability to download asset information

– Capability to query, search and download reports for invoices in some countries

– Additional capability for U.S. clients• Access to review and sign delivery confirmation documents

• Ability to review options and make end of lease decisions

• Ability to request and track progress of transportation request

Learn more at: ibm.com/financing/us/hardware/tools GFP03031-USEN-00

http://www.ibm.com/financing/us/hardware/tools/

http://www.ibm.com/financing/us/hardware/tools/



Green Data Center – funding and asset disposal is part of the strategy

Tailored to the five essential elements of a green data center, IBM Global Financing provides clients across the world with a holistic approach that includes competitive, customized financing of single components or an entire project covering hardware, software and services from IBM and other vendors; environmentally friendly asset disposal of retired IT equipment; and IBM Certified Pre-owned Equipment.

We can help clients:– Reduce total cost of ownership of new IBM hardware by

leasing vs. purchasing

– Establish a technology refresh cycle that can ensure price/performance optimization while helping to manage operational costs and eliminating technology obsolescence

– Finance services and/or software projects in any of the five elements

– Match cost to benefits (improved ROI payback) by consolidating complex, multivendor virtualization or other green projects with large up-front costs into a single monthly payment

– Dispose of retired IT equipment in a safe and secure way and in compliance with environmental laws and regulations

– Reuse equipment by offering used when new is not an option

Green Data Center

DiagnoseGet the facts to understand your energy use and your opportunities for improvement

Measure and Manage

Seize control with energymanagementsoftware

Cool Use innovativecooling solutions

VirtualizeImplement virtualization and other innovative technologies

BuildPlan, build and upgrade to energy-efficient data centers

GFP03032-USEN-00



Financing your green initiatives

As the world’s largest IT financier, IBM offers a complete portfolio of financial services and rates our competitors can’t match.

By providing a holistic view, we can provide a single financing solution to cover the entire scope of an IT project, including hardware, software and services from IBM and other vendors.

Our leases lower the total cost of IT ownership and allow clients to upgrade technology within the lifecycle of their leases.

Among our offerings:– Financing of hardware, software and services from IBM and

other vendors, migration and upgrades

– IBM Project Financing (all-inclusive financial package for services, infrastructure solutions and business transformation projects)

GFP03033-USEN-00



IBM Global Asset Recovery Services (GARS) High Level Process Flow

Returning assetsParts and machines

Warehouse andFulfillmentProcessing/refurbishment of machines

Harvesting of parts

Bulk scrap

Machines and PartsPackaged for sale

Excess and obsolete parts

Scrap vendors

IBM Sales ChannelsIBM sales force, Business Partners and ibm.com

IBM Global Asset Recovery Services Facts

In 2009: GARS remanufacturing operations processed

over 1 million machines with a weight of over 27.8 million pounds.

This equated to over 19.4 thousand machines (or 536,180 pounds) per week.

90.33% of the returned machines were from end of lease, and 9.77% were ARS-related.

90.2% of the units processed were readied for resale and reuse, while the other 9.8% were sent for scrapping.

From 2003 through year end 2009: GARS remanufacturing operations have

processed over 7.4 million returned machines (units), an average of 20,488 machines per week.

The weight of returned machines is now over 109.5 thousand metric tons (or over 241 million pounds).

Since 2004, GARS remanufacturing centers have processed over 1.5 million laptops. If these laptops were stacked on top of each other, the pile would extend over 31 miles into the atmosphere (a trans-oceanic jetliner flies approximately 7 miles high by comparison).

GFP03020-USEN-00



Hardware Financing

Increases buying power; reduces up-front costs into predictable monthly payments.

Lowers acquisition costs over purchase, eliminates obsolescence risk and drives lower total cost of ownership.

Helps establish a flexible technology refresh cycle, ensuring that capacity needs are met while controlling costs.

At mid-lease, the refinancing of the remaining obligation over a new term can lower the payment and create budget room for a new payment for the upgrade.

For clients starting or enhancing their green strategy, leasing ensures that they can obtain the latest IBM advances in power, cooling and space at an affordable cost.

IBM assumes responsibility for environmentally compliant asset disposal at end of lease.

Available Options

Fair Market Value Lease (FMV)

FinancedAmount

$

36 Months

Payments

Residual Value

Estimates hardware value at end of lease You can return the equipment at end of lease Provides lowest monthly payment

Full Payout Lease (FPO)

FinancedAmount

$

36 Months

Payments

$1 Buyout

Nominal end of lease purchase option For clients with longer term use expectations and

requirement to pay over time

GFP03035-USEN-00



* For illustration purposes; represents a 32-way POWER6 595 standard server; best credit client: FMV 36-month lease. Actual financing rates based on client’s credit rating, financing terms, offering type, equipment type and options. Other restrictions may apply.

IBM Global Financing benefits throughout the IT lifecycle

Base lease – 36 months

Month 18 of original lease

18-month point Technology upgrade Extend base lease with

upgrade for 36 months

New 36-month lease with upgrade

End of lease New machine and lease

or Renew, extend, return

machine

IT Acquisition$1,500,000

$1,000,000

$500,000

$0POWER6™ 595 Purchase POWER6 595 Lease

PV of payments

16% savings over purchase

Lower cost of technology acquisition Minimized obsolescence risk

Technology UpgradesE

stim

ate

d m

on

thly

paym

en

ts

($)

Lease Term (months)12 24 36 48

POWER5+™ 32W

Initial 36-month Lease

Technology Upgrade

POWER6 595 32W

New Base Lease36 months

$46,314/month* $44,133/month*

New monthly payment is 5%

lower than original lease payment

Upgrade for little or no change in monthly payment Optimize price performance improvements Obtain latest power, cooling and space advances

Asset Disposal

Minimize data disposal risks Minimize environmental risks Minimize disposal costs

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Affordable, non-disruptive migrations to the latest IBM technology

Key client benefits Affordable, side-by-side non-disruptive migration. Minimized termination charges on leased base

equipment with early replacements. Full 12-month warranty. Offers current system’s fair market value to an

Power™ Exchange server or System z® hybrid. In some cases, the current server may be purchased from the client.

Client can use both servers for up to 60 days to perform side-by-side installation and testing.

Hybrids/migrations: How they work

Client

IBM server on IBM Global Financing lease or client owned to start

1Order new server

from IBM

IBM Power Server

IBM Global Financing GARS

2Builds new IBM

server with upgrade installed by IBM

3

4Client returns used

asset once migration is completed

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Summary Available through IBM Systems and Technology group

for:

– System z and mid-range/high-end Power servers.

– clients who currently own or lease their IBM equipment



Funding your migration to IBM

Take advantage of IBM Global Financing capital to fund your migration to IBM technology

Competitive low rates with flexible terms and friendly contract terms and conditions

– affordable, fixed-rate financing with no restrictive covenants

Total solution financing of IBM and non-IBM hardware, software and services

– one financing provider, one contract, one monthly payment and IT expertise to manage your ongoing project costs

Customized financing structures to meet any budget or project ROI requirement

– innovative deferrals and step structures that can help you mitigate up-front costs

Asset buyback and disposal capabilities to simplify the migration process and potentially provide you value on your older equipment

– Eliminates compliance risk by leveraging IBM expertise in applicable local and state environmental disposal regulations

– IBM can buy back remarketable equipment which can help you reduce migration costs

Why IBM Global Financing? Worldwide asset base of nearly US$38 billion

and more than 125,000 clients in over 50 countries

Nearly two times the IT financing volume of #2 Dell Financial Services and three times the volume of #3 HP Financial Services

Focuses primarily on solution and technology financing

Provides single-source financing to help clients acquire business and technology services, hardware and software – IBM and non-IBM

Flexible financing with competitive rates to businesses of all sizes and across all industries

Proven partner across the lifecycle of IT investments, from acquisition through disposition

IBM Global Financing processes about 40,000 returned machines, or 1.8 million pounds, per week across the world and recycles 85% of the assets

Learn more at: ibm.com/financing/us/migration/overview.htmlGFP03039-USEN-00

http://www-03.ibm.com/financing/us/migration/overview.html

http://www-03.ibm.com/financing/us/migration/overview.html



Sale-leaseback

Client Benefits Clients receive cash in exchange for IT assets to fund higher-yield investments or pay off debt Return on Assets (ROA) is improved by reducing the value of book assets Debt Ratio (Total Debt/Total Assets) is improved by reducing the value of book assets and also

by potentially paying off debt with the cash infusion Reduces IT expenses over the long term: A 20% reduction in IT operations cost increases new

applications development budgets by 80%, according to Gartner Help to reduce depreciation expense along with the value of book assets Protect against shorter technological life than originally anticipated Establish a regular technology refresh cycle through leasing IBM Global Financing bears the responsibility to remove/dispose of assets at end of lease

Client sells existing IT equipment, transfers title of ownership to IBM Global Financing at fair market value

Client leases the equipment back at low monthly payments over a flexible payment period

Cash infusion when a client sells their existing IT assets



IBM Global Financing mid-lease restructuring for upgrades can accelerate budget approvals for clients considering a move to new equipment

Establish base lease 36 months

Month 18 of original lease



New 36-month lease with upgrade

End of lease New machine and lease or, Renew, extend, return

machine

Month 18 of new lease



Leasing upgrades leverage your initial IBM investment, eliminate obsolescence risk and drive lower total cost of ownership

Financing can help establish a flexible technology refresh cycle, ensuring that capacity needs are met while controlling costs

At mid-lease, the refinancing of the remaining obligation over a new term can lower the payment and create budget room for a new payment for the upgrade

For clients starting or enhancing their green strategy, leasing upgrades ensure that they obtain the latest IBM advances in power, cooling and space advances at an affordable cost, and IBM assumes responsibility for environmentally compliant asset disposal at end of lease

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Mid-lease upgrade example: Significant price performance improvement with little or no impact to existing budget

Lease Term (months)Est

imate

d m

onth

ly p

aym

ents

($

)

12 24 36 48

POWER6 595 32W

Technology Upgrade

New Base Lease36 months

4.2 and 5.0GHz options POWER6™ 595 can provide up to 80% more rPerf performance than POWER5™ 590/595 servers

New monthly payment is 5% lower than original lease payment

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

POWER6Upgrade

Original Asset Value

Remaining Principal

New ServerUpgrade

New Server Lease

Principal Value

POWER5+ Base and POWER6

Upgrade

POWER5+ 595at 20 months

POWER5+ 595

POWER5+™ 32W

Initial 36-month Lease

Improve performance by 80%, reduce monthly payment by 5%

* For illustration purposes; represents a 32-way POWER6 595 standard server; best credit client: FMV 36-month lease. Actual financing rates based on client’s credit rating, financing terms, offering type, equipment type and options. Other restrictions may apply.

$44,133/month*$46,314/month*

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IBM Global Financing – Strength in numbers

Global reach– With 29 years of experience, IBM Global Financing is the world’s largest IT financier, with total assets

of $34.6 billion and 125,000 customers in 55 countries. Clients range from small businesses to more than 80% of the Fortune Global 100 list of companies and nearly 90% of Fortune 500 Most Admired companies.

– In 2009, IBM Global Financing represented about 2.4% of IBM’s external segment revenue and 8.9% of IBM’s external segment pre-tax profit

Achieving higher value for our clients– As organizations plan on how to reap the benefits of a rebound, IBM Global Financing will play a key

role in helping companies finance critical projects.

– As IT spending shifts to software and services, the need for financing these areas is increasing. IBM Global Financing Project Financing offering provides longer payback terms and graduated payments to allow clients to align payments with anticipated benefit streams.

Rankings and accomplishments– In December of 2009, IBM Global Financing was awarded the "Captive Finance Provider of the Year"

by Leasing Life Magazine.

– Following the announcement of the economic stimulus funding in May 2009, InformationWeek wrote Doesn't sound much like a computer company, does it? Or a software company? Or just a financing company? In fact, it sounds a lot like a business- and technology- and financial-services company with deep industry expertise



Enterprise IT Financing Facility

Available for strategic IBM relationship accounts

Provides large, dedicated source of capital to fund IBM expenditures (some non-IBM funding)

Credit Facilities from $50M-$400M (dependant on credit rating)

An upfront fee is included based on the facility amount

IT Facility

Peripheral HW

/ OEM

Maintenance

Services

Projects

Existing Leases

& assets

Global, enterprise-wide “umbrella” credit facility

Minimized cash outlays during the initial “construction” period

Preserve cash flow and revolving credit lines,

Match cash outlays with anticipated benefits

May enable some projects to be viewed as “self-funding”

Vendors paid timely after milestone approvals

May enable clients to treat invoices either as a period expense, or as an asset capitalized over the project’s term

Client Benefits



Optimize Total Cost of Ownership with an IT technology lifecycle strategy

You want to find the optimal solution for a certain IT infrastructure or IT project requirement, given your available budget and timing

You want to help ensure that your budget can quickly address ongoing infrastructure requirements – latest technology for productivity; capacity for business growth or seasonal demands

You want to trust the vendor you choose for asset disposal to follow DoD

compliant security processes, local environmental laws and regulations and to provide a

process that is as hassle-free as possible

You want to ensure that you can dispose of old/obsolete

equipment – or migrate to new – in a safe, easy or,

if needed, non-disruptive manner

A technology lifecycle strategy may include energy-efficiency aspects, business transformation events, IT optimization or consolidation projects…

or just a technology refresh to reduce costs GFP03048-USEN-00



IBM Global Financing helps clients to…

Lower the cost of technology acquisition

Preserve cash Lower monthly payments Leverage from IBM Global

Financing residual value

Facilitate management of technology assets throughout their lifecycle

Facilitate technology refresh End of lease options Asset buyback and disposal

Better manage technology acquisition processes Accelerate project implementation Mitigate technology obsolescence risk Improve financial measurements Payment and term flexibility

…optimize total cost of ownership throughout

the entire technology lifecycle

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Leasing helps…

Leasing helps clients…

…avoid issues related to depreciation

The equipment is owned by IBM Global Financing – leasing offers ability to expense rather than capitalize and depreciate system payments


…avoid issues related to disposition of owned assets

Disposition of assets incur cost in time, resources and even cash – at the end of a lease the equipment is simply returned


…lay out less cash compared to a purchase

Simplifies asset management with better tracking and a more homogeneous portfolio

Laying out less cash means funds (or credit lines) are available for other strategic initiatives


…avoid costs associated with technology obsolescence

Technology obsolescence has implications on price performance, maintenance/support costs, energy efficiency and productivity

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Highlights One agreement, one strategic partner and multiple options to meet specific

business needs

Improves price-performance and offers interest-rate protection

Enhances reliability, scalability and flexibility of the IT environment

Streamlines the entire IT infrastructure life cycle, including planning, procurement, budgeting and payment, and asset disposition

Open Infrastructure Offerings (OIO)

Overview

For enterprise clients who are partnering with IBM on large infrastructure projects, IBM can assemble an Open Infrastructure Offering (OIO) that combines hardware, software, professional services, maintenance, financing and disaster recovery into a single customized agreement.

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Date post:	28-Jan-2015
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