How Philips uses the IBM Cloud to deliver on their global B2B Strategy

As presented by Veronica Kirn and Jeff Richard, this presentation will allow you to learn from Philips on how IBM Sterling B2B Cloud Services allows for faster scalability and growth. This presentation was originally given to a select audience in Las Vegas, NV at IBM InterConnect.

1. How Philips uses the Cloud to Deliver on Global B2B Strategy JEFF RICHARD VERONICA KIRN

2. The Royal Philips and IBM Relationship Introductions Jeff Richard – Philips Senior Director of Corporate IT Veronica Kirn - IBM Global Market Manager Overview of B2B Cloud Services Portfolio Integration Services Sterling Collaboration Network Philips Why Philips chose IBM Lessons learned Q&A 1

3. 70 % Of businesses outsource one or more strategic activities 85 % Of enterprises use external cloud services $3.5 billion Of cost per year in complying with just one new regulation, air cargo screening in the US 574 The average number of partners, customers and suppliers in an organization’s B2B global community 50 % Of businesses plan to adopt more collaborative sourcing models 65 % Growth of the middle class in Asia and Latin America between 2009 and 2020 3/26/2015 © 2015 IBM 2 Increasing complexity + velocity of data = reality

4. 3 Multi- National Organization Trading Partners Global requirements, adaptability for change, and sheer volume of trading partner transactions Collaboration SLAs Reliability Protocols Governance Visibility Integration Technologies Data formats Standards 3 These trends indicate that adaptability is key

5. Focus on the core of your business; drive growth through flexible and superior global services Enables secure integration with external business partners Extends your electronic community to include more partners Gain faster time to revenue, reduce the time of securely integrating with 100% of your business partners B2B Cloud Services Access to pre-connected trading partners across the globe 4 4

6. Extend a customizable website capability to your small business partners Services Reporting & Analytics Webforms Transform how you monitor incoming and outgoing B2B transactions How IBM can help you Modernize to the Cloud? Flexible cloud technologies and expert services; fully managing your communities © 2015 IBM File Transfer Service Integration Services B2B Cloud Services Address complex integration challenges of partners, suppliers and customers Sterling Collaboration Network offers a Global connection to 340,000 trading entities Secure, reliable file-based business to business Integration in the cloud 5 5

7. Proven value created across industries My client’s results Integration Services Enabled seamless and secure key business processes Improved business process efficiencies through visibility Automated manual processes, reducing errors Provided visibility and control over collaborative processes Decreased trading partner on boarding times Reduced processing and transaction costs 6 6

8. Top 3 things to consider after today Can you react quickly to scale up or down depending upon future M&A activity? Are you able to securely and reliably communicate with 100% of your trading partners? Is your focus on cost reduction with the need for a strategic approach to B2B? 7

9. How Philips uses the Cloud to Deliver on Global B2B Strategy JEFF RICHARD 8

10. Agenda Meet the speaker Philips at a glance & strategic drivers Challenges, opportunities Why we chose IBM Target architecture Lessons learned Working relationship and achievements 9

11. Jeff Richard at a Glance Working for Philips Senior Director; Head of Foundation Architecture Integration & Collaboration Program & Platform Management 20 years of financial services experience Fidelity Investments Citigroup Numerous IT related roles Product & Program Management Enterprise, Data & Integration Architecture Developer 10 linkedin.com/in/jeffrichard/

12. Royal Philips 42% Healthcare 37% Lighting 21% Consumer Lifestyle Est. 1891 Headquarters in Amsterdam, Netherlands 115,000+ Employees worldwide in 100+ countries € 23.3 billion Sales in 2013 Portfolio ∽70% B2B $9.8 billion Brand value in 2013 11

13. Presence in more than +100 countries Philips’ revenue across geographies Growth geographies North America Western Europe Other mature geographies 36% 30% 26% 8% 1 Based on sales last 12 months September 2014 2 Growth geographies are all geographies excluding USA, Canada, Western Europe, Australia, New Zealand, South Korea, Japan and Israel 12

14. Where is Philips Heading? 13 Standardize business processes across businesses and markets Standardize to common platforms and services Implement a simpler, standardized IT landscape with faster time to value Consumption based cost models Creating two world class companies Accelerate! change and performance improvement program is making Philips a more agile and entrepreneurial innovator.

15. What problems are we trying to solve? Philips current B2B architecture is overly complex, expensive, and brittle. Manual business processes Multiple point solutions, without enterprise class performance or scale Global market pressure Customer on-boarding opportunities Platform reach for connecting with smaller partners 14

16. Why IBM? Philips Key Requirements Support and expertise with global B2B Support for customer centricity and recued cost per order Seamless support for our Accelerate! transformation Philips & IBM Relationship Long time Sterling / IBM customer Strategic IBM Integration platform IBM Value Proposition Accelerated business value creation – reduced cost per order Support for business change and decoupling TPs from IT systems Reduced complexity and costs while moving faster w/less investment 15

17. Target Architecture Standardized common data models Reusable digital business service APIs Minimal architecture components Business acquisition and divestiture support 16

18. Lessons Learned Business group vs. Market vs. Global approaches present data and process challenges. Rationalize process and data models first. Ensure proper governance structures are in place from the start. Multi partner service models present unique challenges. Ensure a clear understanding of the service and delivery models, the service warrants a CoE. Don’t under estimate the level of business stakeholder commitment. Preparing the trading partner for on-boarding through the testing and final on-boarding steps. Governance. It’s a dirty word but someone's got to do it. 17

19. IBM Working Relationship Tight integration of IBM & Philips operational support Collaborative quarterly reviews and service adjustments Evolution of the relationship over time; CDS Support for Philips Agile delivery methodologies Sterling mindset survived post IBM acquisition 18

20. What has been achieved As of 1/14/2015 445 Healthcare Community Partners On-boarded in ~12 months 100 trading partners with IBM's Community Development Services (CDS) Specifications, requirements, and communications related to onboarding activities Reporting as well as requirements gathering from Philips business users Successful Warehousing integrations and data routing Overall Deployment Facts Regions and Countries supported include: North America, South America, EMEA including Spain, Netherlands, India, Germany 32KC/month processed with Integration Services 634KC /month processed on the Sterling Collaboration Network (VAN) 19

21. Thank You 20 #B2Bcloud