Unlocking the Business Value of Information for Competitive Advantage Information On Demand Unlocking the Business Value of Information for Competitive Advantage

Competitive Advantage Faster Processing, Reduced Costs New Initiatives Increasingly Focus on Optimization Organizations Striving for Competitive Advantage Business Optimization Growth is 2 Times Faster than Business Automation Competitive Advantage Business Optimization Information Agenda Customer Profitability Dynamic Demand Planning Financial Risk Insight $594B 5.1% CGR Business Automation Application Agenda For the past two decades, companies have primarily focused their IT investments on automating their business processes with the objectives of driving faster processing and reduced costs This has been driven by an “application agenda” to implement ERP and Financial applications, supply chain management solutions and call center and CRM applications However, these types of investments are no longer creating a sustainable competitive advantage for organizations As a result, over the past few years, we’ve seen new initiatives increasingly focused on optimizing their business to drive a more sustainable competitive advantage in the market place This means moving from just leveraging ERP and financial applications to providing increased financial risk insight for better business decisions…moving from just managing your supply chain, to enabling more dynamic demand planning…and moving from just managing your call center and customer relationships to providing increased insight to improve customer service a drive greater profitability from your customers These new initiatives are all dependent on information, and having an information agenda in place 5.1% CGR $594B Call Center Operations Supply Chain Management IT Spending Estimate* 2008 ERP & Financials Faster Processing, Reduced Costs Includes Hardware, Software and Services. Does not include Networking, Printer, or Standalone Printer or PC Markets. CGRs 2006 – 20011. Opportunity estimates based on analysis done by the IBM Market Intelligence Department. IBM Market Intelligence data is provided for illustrative purposes and is not intended to be a guarantee of market opportunity. IBM Confidential 2

Focusing on Optimization at BCBS TN Provider Satisfaction Improves to Over 90% Competitive Advantage Business Optimization Information Agenda Understanding Providers Improves Negotiations Nearly 3 Million Members …insufficient understanding of customer issues 630,000 Healthcare Providers …multiple healthcare programs …no single view of all provider claims and activity Customer insight for better service Business Automation Application Agenda Employee Portal Call Center Application BCBS TN is a great example of this. 5-7 years ago, BCBS TN was focused on deploying call center applications to handle customer calls and building portals to provide their employees with a place to access relevant information They have spent the past 2 years optimizing customer service and sales by generating and delivering insights on prior issues directly to call center agents while they are engaged with customers and providing sales increased knowledge of providers, including an understanding of the total business they do with any individual provider to improve their negotiating position when renewing contracts Initial Focus on Automating Processes Deploys call center applications to handle calls for different healthcare provider programs Develops intranet portal for delivering information to employees Optimizing Customer Service & Sales Generate insights on issues and deliver directly to call center agents while talking to customers Provide sales increased knowledge of providers, including an understanding of the total business they do with any individual provider to improve their negotiating position when renewing contracts Faster Processing, Reduced Costs IBM Confidential 3

Key Challenge is Unlocking the Value of Information 47% of users don’t have confidence in their information Organizations need information to optimize their businesses, but continue to struggle with how leverage all of the information they have Information remains locked in various silos across the organization The volume of information and the variety of different information types an organization has to deal with growing exponentially The velocity of business in today’s market is driving more real-time requirements for accessing and using information Some recent surveys point out just how bad this problem has become Almost 50% of users claimed they don’t have confidence in their information (AIIM 2007 Survey) – hidden fact is that this number is higher than it was in the 2006 survey, indicating that this problem is getting worse, not better Even more staggering is the fact that almost 60% of managers claim they miss Information they should have used when making a business decision, and… Over 40% of managers claim they use the wrong information at least once a week (Accenture survey) 59% of managers miss information they should have used 42% of managers use wrong information at least once a week AIIM & Accenture Surveys, 2007 IBM Confidential

Business Optimization How Do You Unlock the Business Value of Information for Competitive Advantage? Business Optimization ? So, customers need the ability to unlock the business value of information across their organization and start using that information more effectively as a competitive advantage…but they struggle with how to actually do this When we ask customers what their application agenda is, we get clear answers about the different ERP, financial, supply chain management, and CRM applications they are deploying. However, when we ask customers about their information agenda, we get more varied, less confident answers. Automation IBM Confidential

Business Optimization Information On Demand Unlocking the Business Value of Information for Competitive Advantage Financial Risk Insight Workforce Optimization Dynamic Supply Chain Better Business Outcomes Customer & Product Profitability Multi-Channel Marketing Business Optimization Plan, understand and optimize business performance End-to-End Capabilities Plan, understand and optimize business performance Establish and maintain an accurate, trusted view of information Flexible Architecture for Leveraging Existing Investments Establish and maintain an accurate, trusted view of information We believe that there are 4 key things that organizations require to unlock the business value of information for competitive advantage…and this is what Information On Demand is focused on. Organizations need the ability to manage data and content over its lifecycle to reduce the costs associated with managing information, provide controlled accessibility, and address retention and compliance requirements They must also be able to use data and content as part of the individual business processes and applications across the enterprise, optimizing the performance of applications and improving decision making…these first two requirements are addressed by data and content management capabilities. Organizations then need to establish an accurate, trusted view of information across these different processes and applications to drive more consistent information across the enterprise and support analytic and other requirements to use information coming from different sources, whether it’s delivering a single view of customers, products, revenue, etc…and they need a “flexible” architecture that can leverage all of their existing investments…accurate, trusted information is established through information integration, data warehousing and master data management. These first components had really been what our IOD story was addressing until recently…with the acquisition of Cognos, we are now providing our customers with the ability to leverage that trusted information to build their plans, understand how their business is performing, and focus on optimizing performance across the enterprise…and this is accomplished through business intelligence and performance management These are the main capabilities required by organizations to unlock the business value of their information and the components that can enable organizations to make that happen, but the ultimate object our clients have is to drive better business outcomes. And that’s what we are focused on with all of these components…helping our clients improve customer and product profitability, provide increased financial risk insight for better business decisions, optimize the workforce and control labor costs, enable more dynamic supply chain management, and support multi-channel, event driven marketing initiatives. And IBM provides the most complete, end-to-end capabilities for Information On Demand, with every component focused on helping customers optimize their business. Other Information Sources Manage data and content over its lifetime Use data and content as part of business processes Manage data and content over its lifetime and as part of processes IBM Confidential

Information On Demand Unlocking the Business Value of Information for Competitive Advantage People, Processes & Applications Establish and maintain an accurate, trusted view of information Plan, understand and optimize business performance So, these are the key things that companies need to do to leverage their information, and what Information On Demand is focused on. Manage data and content over its lifetime Use data and content as part of business processes IBM Confidential

Information On Demand Part of a Broader Technology Ecosystem People Collaboration Messaging Portals Processes & Applications SOA Message Bus BPM But we recognize that companies need more than just software to leverage their information. Information On Demand is about providing a comprehensive vision for unlocking the business value of information for competitive advantage by enabling organizations to establish and leverage trusted information to optimize business performance. And IBM’s commitment to the cross-company Information On Demand initiative has resulted in a comprehensive portfolio of software, services, hardware and industry-specific solutions to turn Information On Demand vision into reality for organizations of any size. This includes infrastructure required for information, such as storage and servers, strategy and implementation services to provide the know how and assistance to required to take advantage of the technologies, and partnerships to integrate these capabilities into third party applications and your environment. IBM even provides a set of industry models, blueprints and frameworks to help address industry specific business needs. Systems & Development Systems Management & Development Tools IBM Confidential

Information On Demand A Comprehensive Approach People, Processes & Applications Business Partners & Solutions Applications & Tools Skills & Expertise Industry Solutions Strategy & Implementation Know How & Experience Strategic Consulting Implementation Services But we recognize that companies need more than just software to leverage their information. Information On Demand is about providing a comprehensive vision for unlocking the business value of information for competitive advantage by enabling organizations to establish and leverage trusted information to optimize business performance. And IBM’s commitment to the cross-company Information On Demand initiative has resulted in a comprehensive portfolio of software, services, hardware and industry-specific solutions to turn Information On Demand vision into reality for organizations of any size. This includes infrastructure required for information, such as storage and servers, strategy and implementation services to provide the know how and assistance to required to take advantage of the technologies, and partnerships to integrate these capabilities into third party applications and your environment. IBM even provides a set of industry models, blueprints and frameworks to help address industry specific business needs. Infrastructure Storage & Servers IBM Confidential

Organizations Need an Information Agenda An approach for unlocking the business value of information Strategy Creating a vision to guide decisions and address business objectives Information Infrastructure Identifying technology components and capabilities to support enterprise requirements And we want to help organizations establish an information agenda to support these initiatives and get more value out of their information related investments. An effective Information Agenda provides a guiding mechanism for an organization to gain a future perspective to information requirements across heterogeneous informational systems (IBM and non-IBM). It establishes the enterprise information infrastructure that supports tactical decisions and transforms organization towards optimized business performance. An information agenda establishes corporate information vision tied to business initiatives and strategies, helps identify technology needed to establish a common framework, delivers a roadmap for implementing short and long term projects within context of strategy, and helps organizations develop and implement cross line of business policies and procedures for managing and protecting information… All efforts in conjunction with each other result in a systematic methodology to ensure the strategic use of information resulting in business optimization. What is it? An Information Agenda is the strategic vision and roadmap for organizations to: Identify and prioritize projects that deliver a return Identify what data and content is important to the organization Identify how and when it should be made available Determine what capabilities are required to support and access it and Determine what management processes and governance practices are required to sustain the plan. Align the use of information to match the organizations business strategy Create and deploy an information infrastructure that meets immediate needs and future needs Implementing policies to manage and control definitions and use of information Information Governance Establishing a plan that delivers both short and long-term returns on investment Roadmap IBM Confidential

Cognos and Performance Management

Scorecard or dashboard shows Profit is below plan Business Intelligence & Performance Management A complete platform to plan, understand and optimize performance Resolve Issues and Plan for the Future Identify Issues Explore and Understand Issues Financial Management Revenue Expense Report shows Cost of Goods Sold is rising due to increase in fuel costs Plan is updated to adjust for rising fuel costs…provides understanding of impact to other expenses and profit Scorecard or dashboard shows Profit is below plan Cognos wasn’t just one of the leading BI vendors in the market place…they were a thought leader around performance management. They recognized early on that while there were independent markets forming around business intelligence and financial or corporate performance management, customers really needed an integrated set of capabilities to understand, plan and manage the overall performance of their enterprises. Thus, Cognos focused on this higher level thought around performance management and answering the three key questions every organization must address when it comes to their finances, their assets, their revenue and their expenses. First, the must answer the question, “How are we doing?” – this requires measuring and monitoring tools like scorecards and dashboards to help managers identify potential issues…in this example, a manager may see that profit is falling below plan Next, they’ll want to know “Why?” – this requires the ability to explore and understand issues through reporting and analytics…in this example, a report may show that the cost of goods sold is rising due to increasing fuel costs MOST BI SOLUTIONS STOP SHORT HERE – they only provide the ability to find out what is going on, but don’t help you do anything about it! 3) Cognos also helps customers figure out “What should we do?” – this requires planning, budgeting and forecasting capabilities to help resolve issues and plan for the future…in this example, the plan can be updated to adjust for the rising fuel costs, but before putting the new plan into effect, you can run what-if scenarios to see the impact on other parts of the plan, including expenses and profit, to determine if this is a change you even should be making Ultimately, it’s about providing end-to-end capabilities to not just understand how your business is doing, but to enable people to do something about it. And Cognos provides a complete, unified platform that delivers all of the business intelligence and performance management capabilities required by an organization… Asset Management IBM Confidential

Performance Management is Relevant Across the Enterprise Finance Sales Operations How are we doing? Scorecards and Dashboards Why? Reporting & Analytics Marketing And Performance Management is relevant in every functional area of an organization in every industry. Whether it’s a top down corporate performance management initiative or a department-led operational performance initiative, every part of the organization needs scorecards and dashboards to know how they are doing, reporting and analytics to understand why, and planning, forecasting and budgeting to figure out what they should be doing? What should we be doing? Planning, Forecasting and Budgeting Customer Service Human Resources IT/Systems IBM Confidential

The Performance Management Journey Customer Phases Departmental BI Applications Enterprise BI Capabilities Independent Planning Coordinated Decision Making Addressing end-to-end performance management is typically a journey that customers take…and Cognos has been focused on helping customers accelerate that journey Companies usually start off implementing different BI tools in different departments, and one of the first major challenges they face is providing enterprise wide BI capabilities This can be difficult with many BI solutions because most vendors provide a “suite” approach, where they have different products to address the different requirements we just talked about…for example, one product for reporting, one for dashboarding, and a different one for analytics, and typically an entirely different environment for planning Cognos made a major investment four years ago to help customers take this step in the journey by rebuilding their entire stack as a single, integrated platform for all capabilities, making it easier for organizations to leverage all of the different capabilities across the organization The next step for most organizations is to move from making independent decisions, without regard to how those decisions may impact other parts of the organization, to supporting one of the key objectives of most CEOs, which is to drive greater strategic alignment across the organization…this requires more coordinated decision making This is really the higher level objective - driving the overall performance of the enterprise…which is why over the past 18 months, you’ve seen Cognos stop talking about just BI, but focus on overall Performance Management And Cognos provides integrated planning capabilities and enables companies to share definitions, assumptions and metrics across different plans so that you can see the impact of changes you make on your plan to the plans of other parts of the organization and the impact on the enterprise’s performance as a whole So, what do companies most need to support their performance management journey? What Do Companies Need To Support their Performance Management Journey? IBM Confidential

People, Processes, Applications Customers need accurate, trusted information For better decisions, faster People, Processes, Applications Well, business intelligence is important to applications…and as a result, many companies are looking at how to integrate these capabilities into their applications However, every company has multiple applications that need to take advantage of these capabilities…even companies that consider themselves an “SAP shop” continue to have non-SAP applications For this reason, when Cognos re-built their platform, they based it on a Services Oriented Architecture, so that customers could easily integrate their BI functionality into multiple applications across the enterprise, and continue to provide common, consistent business intelligence across those applications So, while BI is important to applications, the EFFECTIVENESS of BI DEPENDS on having accurate, trusted information upon which to base your business decisions This is why the marriage of Cognos and IBM is such a great fit for customers…because it helps customers make better decisions, faster, through delivering business intelligence capabilities with accurate, trusted information, while leveraging SOA to ensure that these capabilities can be leveraged across the organization by ALL people, processes and applications IBM Confidential

New Offerings and Solutions Announced 4 New Pre-Integrated Software Offerings 2 New Pre-Integrated Systems Offerings 10 New & Enhanced Industry Solutions Data Warehousing Data Integration & Quality Actionable Dashboards Process Management 3 New Implementation Services Offerings

New Pre-Integrated Software Offerings Data Warehousing BI pre-integrated with the data warehouse for easier deployment, reduced TCO and faster query times Cognos 8 BI Starter Kit included with Warehouse 5 user licenses for reporting & dashboarding InfoSphere Warehouse included with Cognos 8 BI Non-production license Data Integration & Quality Improved BI through more accurate, integrated information and data lineage to track basis for business decisions Information Server pre-integrated with Cognos 8 BI Data quality, ETL & Metadata Management 4 New Pre-Integrated Software Offerings Data Warehousing Data Integration & Quality Actionable Dashboards Process Management End-to-end Capabilities Easier Deployment Lower TCO

New Pre-Integrated Software Offerings Actionable Dashboards Enable users to seamlessly take action while reviewing key business metrics Cognos 8 BI Starter Kit & Cognos “Builder” included with IBM Dashboard Accelerator 5 user licenses for reporting & dashboarding Dashboard Accelerator Starter Kit included with Cognos 8 BI 20 user licenses Process Management Leverage BI for better decision making and optimized processes Pre-built integration templates for IBM FileNet BPM Include BI content as part of a process Events engine to initiate processes in IBM FileNet P8 BPM or WPS based on IBM Cognos 8 scorecard thresholds, including predicted violations 4 New Pre-Integrated Software Offerings Data Warehousing Data Integration & Quality Actionable Dashboards Process Management End-to-end Capabilities Easier Deployment Lower TCO

New Pre-Integrated Systems Offerings Balanced Warehouse New C4000 Balanced Warehouse provides “appliance like” offering for the mid-market Includes Cognos 8 BI IBM Compliance Warehouse Automatically identify, classify and aggregate content and process information that must be retained for compliance Leverages IBM Cognos for reporting, analytics and monitoring compliance related content and processes 2 New Pre-Integrated Systems Offerings Balanced Warehouse IBM Compliance Warehouse End-to-end Capabilities Easier Deployment Lower TCO

New Implementation Services Offerings IOD Infrastructure Acceleration Quicker, more effective deployment of warehousing environments for faster return on BI investments Storage Optimization Design, deployment and operation of more efficient storage infrastructure to improve utilization and reduce overall costs Data Mobility Establish a simple and unified approach to managing and moving data on-line without impacting performance 3 New Implementation Services Offerings IOD Infrastructure Acceleration Storage Optimization Data Mobility End-to-end Capabilities Easier Deployment Lower TCO

New & Enhanced Industry Solutions Financial Services Financial Risk Insight for Banking Risk Adjusted Profitability for Banking Retail Store Operations & Planning for Retail Integration Framework Public/Government Municipal Scorecard Crime Management and Insight Healthcare & Life Sciences Health Analytics Life Sciences Promotional Spending and Compliance Industrial Manufacturing Sales and Operations Planning Horizontal Financial Planning Workforce Analytics 10 New & Enhanced Industry Solutions End-to-end Capabilities Easier Deployment Lower TCO

Information On Demand from IBM Unlocking the Business Value of Information for Competitive Advantage “…there's no more extensive information management portfolio available, period…” 2008 Editor’s Choice Awards Intelligent Enterprise Magazine Establish and maintain an accurate, trusted view of information Plan, understand and optimize business performance End-to-end capabilities Open standards, SOA Flexible architecture for heterogeneous environments Deep industry expertise Industry solutions Extensive partner network Manage data and content over its lifetime Use data and content as part of business processes IBM Confidential