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| | IBM Confidential Becoming a Globally Integrated Enterprise: The IBM Story NAME June 2007 The Globally Integrated Enterprise represents IBM’s business design for the 21ST century. “A Globally Integrated Enterprise shapes its strategy, management and operations in a truly global way. It locates operations and functions anywhere in the world based on the right cost, the right skills, and the right business environment. And it integrates those operations horizontally and globally.” This new model is gaining increased attention and generating discussion throughout the global media. The Globally Integrated Enterprise will replace the MNC (multinational corporation) for competing in the Flat World. Technology and business landscape changes are driving the requirements for global integration. Becoming the world’s premier Globally Integrated Enterprise is a key aspect of IBM’s corporate strategy. To become globally integrated, IBM aligned strategic, operational, and IT infrastructure transformation efforts, all guided by a shared set of global company values. We found that having this shared set of company values, understood and honored worldwide, is a critical success factor for our new globally integrated business design. Re-establishing IBM Values Re-established the core of IBM’s culture and brand Developed by employees in 72-hour virtual “jam”—employees from every geography participated Examined the company’s deepest values and collective purpose As part of our global integration transformation, we moved work to where it can be done best, based on openness, expertise, and economic factors. In moving work to where it can be done best, we deployed eleven support functions as global shared services. These support functions either directly or indirectly enabled our globally integrated business processes, providing us with more expert capability and competitive advantage. IBM’s globally integrated research centers are positioned to enable client collaboration in ne