IBM Industry Frameworks Building Smart Solutions

IBM Industry FrameworksBuilding Smart Solutions Ljubljana, February 10, 2010 Alexander Knaani Industry Business Value Assessment Leader IBM Software Group, CEEMEA

Introducing Smart Planet … “Every human being, company, organization, city, nation, natural system, and man-made system is becoming interconnected, instrumented, and intelligent.This is leading to new savings and efficiency—but perhaps as important, new possibilities for progress The world is flatter. The world is smaller. The world is about to get smarter. Because it can. Because it must. Because we want it to.

The vision in detail… Smart Planet Smartis a vision of how the world works — how every person, business, organization, government, natural system, and man-made system interacts. Each interaction represents a chance to do something better, more efficiently, more productively. But more than that, as the systems of the planet become smart, we have a chance to open up meaningful new possibilities for progress.

Industry Solutions are a Reflection of IBM’s Expertise on how to develop smarter solutions • Marketplace Drivers: • Customers are looking for their business commitments to be met at market speed, or better • Managing project costs into bite-sized bits is now a requirement • Customers want to utilize the technology that best supports their strategy, independent of vendor • Our Strategy: • Combine industry assets and best practices into offerings focused on core and connected business problems • Design for re-use • Incubate an ecosystem of industry ISVs, pre-integrate • Be prescriptive about a platform, emphasize best practices, better utilize our industry expertise

The IBM INDUSTRY Solution Frameworks are the strategic platforms for Solutions Smarter Govt Industrial Comms Banking The Industry Solution Customer Blueprint once it is implemented across the enterprise enables the realization of the expected business benefits. Industry Enterprise Solution Industry Solution Customer Blueprint The Framework combined with implementation and subject matter expertise to design a customer specific solution which provides business value. Industry Framework The SOA Foundation and IOD products combined with industry specific assets configured according to an Industry reference architecture to support common business patterns. IBM’s five SWG brands including Service Oriented Architecture and Information On Demand SOA Foundation IOD IBM STG High Performing computer capabilities Dynamic Infrastructure

Benefits of a framework approach • Speed…of implementation with repeatable architectural patterns and accelerators • Flexibility…to progressively transform to a simplified architecture one project at a time • Choice…of how to get started and who to partner with for business capabilities • Cost Reduction…through re-use of services and assets and through faster implementation • Alignment…of business and IT priorities for more effective results from solution implementation BusinessArchitecture Business Processes Technology Architecture & Infrastructure

Intelligent software is critical to enabling smarter solutions Software is helping to: • Consume exploding volumes of data • Achieve an information advantage • Drive on-going product innovation • Serve new global markets • Deliver a more energy efficient world Software is increasingly viewed as a strategic business asset: • Leaders are deploying intelligent software, systems and products • Success depends on the ability to accelerate innovation and enable change by managing software delivery effectively

IBM is working across the industries to make our Planet Smarter Smarter Healthcare Smarter Banking Smarter Traffic Smarter Food Smarter Water Smarter Communications Smarter Retail Smarter Grids Smarter Cities Smarter Public Safety Smarter Oil & Gas Smarter Buildings

Forces Driving Industry-Wide Transformation in Healthcare are Leading to Business and IT Innovation Business & IT Innovation Globalization Rising National Health Expenditure Growing New Drug R&D Cost Consumerism Stagnating GDP Growth Aging / Chronic Illness Health Premium Increase • Standards Adoption • Changing Business Models • Value of IT Price Inflation Expensive New Treatments Emergence of New Technologies Market Forces / Change Agents Increasing Economic Pressure on Healthcare Adoption of New Business and IT Models 3/10/2014 10

Global financial competition will limit government & employer spending on healthcare • Healthcare delivery is shifting from local to regional, national & global settings • Consumers are becoming more demanding as they bear greater financial burden & are more knowledgeable about the risks posed by healthcare • There are now more people 60 years or older than 4 years or younger • Overweight individuals now outnumber those who are underweight • Chronic diseases account for 60% of deaths globally, consume 75% of resources in developed countries & are becoming more prevalent • Infectious diseases have re-emerged & often in drug-resistant forms • Medical technologies (e.g. genomics & regenerative medicine) will revolutionize risk assessment, diagnosis, & treatments • Advanced IT will be required to take advantage of the new medical technologies Five market forces make healthcare different from the past:

How much healthcare is a societal right? • What are reasonable lifestyle expectations? • What are acceptable behaviors? • What are acceptable attitudes toward privacy? • Financial • Service Quality • Clinical Outcomes • Governments aren’t addressing the tough challenges • Consumers are reluctant to adopt healthy lifestyles • Payers are unwilling to accept short-term cost increases to avoid higher future costs • More digital healthcare data in the last 3 years than in the previous 40,000 • IT infrastructure & processes are “stove-piped” • Lack of widely accepted, robust & specific data standards Counterbalancing change are inhibitors that threaten to maintain the healthcare status quo • Adequate funding • Prioritized & spent well

Automated Systems Throughput Analytics Revolutionary Technology Information Correlation 1st Generation Diagnosis Data and Systems Integration Non-specific (Treat Symptoms) Organized (Error Reduction) Personalized (Disease Prevention) Evolutionary Practices As we evolve towards Personalized healthcare… Volume Personalized Health Care Lifetime Treatment Pre-symptomatic Treatment Computer Aided Diagnosis Translational Medicine Molecular Medicine Genetic Predisposition Testing Clinical Genomics Health Care Today Complexity Digital Imaging Electronic Health Records Artificial Expert Systems Episodic Treatment

…healthcare delivery continues to change rapidly: Issues forcing change: Sorrel & Josie King - Preventing Medical Errors • Cost spiral • Productivity limits • Quality of care • Complex diseases/treatments • Entry and exit block • Supply chain complexity • Regulations

And in response – Hospitals are transforming: TO Integrated Patient Focus Outcome Based Fees Services Facilitator Patient Focused Collaborative Value Provider Knowledge Based FROM Specialized Silos Fee Entitlement Facility System Focused Stand-alone Administrator Instinct Based On-going Hospital transformation is critical for survival: • Economic realities remain: fold, acquire/merge, or specialize • Quality/cost of service delivery is becoming known and critical for patients • Role & Viability as a Healthcare Provider in a networked world is changing

Healthcare Provider infrastructures require flexibility and interaction across many boundaries Multichannel access Radiologist Pediatrician Unit Nurses Surgeon Health Plan

With this need for care flexibility comes a need for IT flexibility Rigid and disparate healthcare IT applications limit flexibility Flexibility means • Provide new and innovative delivery services • Standardize, automate and integrate processes • Extend without replacing existing legacy systems • Scale cost-effectively

IBM’s Health Integration Framework provides this IT flexibility healthcare provider, payer and life science solutions Business Partner Solutions IBM Solutions Healthcare Provider Clinical Information Systems Healthcare Provider Health Analytics Healthcare Payer Claims Adjudication Healthcare Payer Core Systems Modernization Life Sciences Drug Discovery Optimization Life Sciences Regulatory Compliance Initial focus on healthcare provider and payer segments IBM Services Assets and Delivery ISV Ecosystem IBM Health Integration Framework Healthcare and Life Sciences Extensions Reference Architectures Interfaces and Adapters Portals and Portlets Data and Process Models Tools Key Software Group Products Information Management Lotus Rational Tivoli WebSphere 3/10/2014 18

Provider and Payer Analytics The aggregation and analysis of information across a healthcare enterprise, to improve clinical, financial or administrative outcomes and results. Patient and Clinician e-Views Using a portal-based user interface for the aggregation of information across a healthcare enterprise, provider or payer, to create custom views depending on role and providing new services. Integrating the Healthcare Enterprise (HL7 ESB) The integration, exchange, and sharing of information across a healthcare organization. This can involve the integration of multiple systems within a single hospital, or within an integrated delivery network. Health Information Exchange (HIE) The exchange, sharing and usage of information across multiple healthcare organizations, region, or community of interest. Solution areas addressed by IBM’s Health Integration Framework 3/10/2014 19

Case Study: Industry Standards & SOA Based Data SharingTrillium Health Centre – Toronto Canada Business Challenge:Iintegrate all of Trillium’s patient information so health care professionals can get a complete, up-to-date picture of each patient from a single record, enabling improved patient care. Solution:Created a single patient record aggregating data from various software applications/platforms within the healthcare system (test results, x-ray images, patient scheduling, pharmacology systems) Results:Reduced wait times, Increased patient-touch, Reduced back office burden Implementation Details:WebSphere Message Broker, WebSphere MQ, WebSphere Portal Server, DB2, Tivoli Identity Manager

Reasons to be optimisticThere is an extraordinary opportunity ! $1,264 trillion 5.8% CAGR 2.5 billion Growth in world GDP1 from 2010 thru 2025 will put the current crisis in context. Half the world is unbanked. Just over half of world’s adult population do not use formal financial services to save or borrow.2 The value of global assets3 will quadruple by 2025 – calling on a vibrant global financial system to intermediate and manage. 1 - Nominal 2 - http://financialaccess.org/sites/default/files/110109%20HalfUnbanked_0.pdf 3 - Assets = deposits, equity and fixed income

Financial institutions Regulators Supervisors Surveillance and monitoring Compliance Policy makers Soundness Stability Laws and rules Standards Dramatic forces changing the world’s most complex system. • A global system moves more than $74T of money each day • A financial supply chain that is massively interconnected and interdependent • Public and private partnerships are suboptimal cross-border and within borders • System requires 24/7 continuous flow of information • Rapid increase in types of data entering financial system from “real economy” digitization • A criminal element that grows more sophisticated • In total the system intermediates the needs of billions of people in 190 countries in thousands of languages. An adaptive system evolving organically

Growth requires smart institutions to think and act in new ways Rethink the business model Develop new intelligence Integrate risk management Drive a simplified and streamlined agile enterprise that balances growth, efficiency and business resiliency Develop enterprise wide capabilities to enable informed judgment, client- centricity and profitable growth Achieve compliance objectives while mitigating operational risk, fighting crime and optimizing financial returns

Case studies - leading banks are responding with smarter solutions 90% reduction in manual process 75% reduction in false results 200+ millioncustomer records consolidated Streamlined payments: The bank streamlined operations to achieve a 90% reduction in manual touch points in the check-clearing process—cutting processing errors and required remediation. Risk management: The bank expanded the names checked on its anti-money laundering watch lists from 2,500 to more than 40,000 and reduced the number of false negatives and positives by 75 percent. Customer data integration:Major Global Bank The bank unified 200+ million customer records across all consumer lines including retail banking, cards and insurance, and increased its ability to up-sell products to existing customers. > IBM builds repeatable technology patterns into solutions to make them smarter

Smarter banking solutions have a common set of attributes INSTRUMENTED INTERCONNECTED INTELLIGENT SMARTER BANKING + + = Financial products are decomposed and managed at the atomic level, allowing the participants to measure, control, sense and respond quickly and precisely based on a “single source of truth.” A smart bank is built on systems that advance processing to better automate transactions with counterparties, partners and suppliers to enable innovation across the value chain. A smart bank enables the rapid, intelligent analysis of a vast mix of structured and unstructured data to improve insight, enable informed judgment and fight abuse. A smart bank anticipates client needs and delivers innovative products more quickly and consistently than the competition. It can respond nimbly to changes in market conditions.

IBM provides a comprehensive Banking Framework that accelerates solution deployment The framework provides a banking-specific software platform with… • Banking extensions and pre-built solution accelerators to speed deployment • Best practices and business- specific usage patterns to lower risk • Support for adoption of open and industry standards • A choice of business applications from IBM business partners • An approach to align technology with business needs Core Banking Transformation Integration Optimization Analytics Collaboration Security Resiliency Customer Care and Insight Payments and Securities Integrated Risk Management The framework gives you speed, flexibility and choice in deploying solutions while reducing cost and risk!

The framework enables integration of information and processes across the bank Example Front Office Open Account Build in greater efficiencies, improved customer service and reduced data requirements Back Office Verify Payments Back Office Monitor Potential Fraud Front Office Originate Loan

Solution areas addressed by IBM’s Banking Framework Core banking transformation Allows you to modernize and renovate the legacy applications that support core banking functions while aligning with the changing needs of the business Payments and securities Helps you progressively transform your payments operations to become more flexible and efficient Integrated risk management Supports taking a holistic approach to managing financial risk, financial crimes, operational and IT risk, and compliance Customer care and insight Helps you build a foundation for creating a single view of the customer and enabling more effective and efficient sales and service

Client Challenges • The bank needed a payments message hub that could send and receive SEPA Credit Transfers from the European Bankers Association Solution • Implemented a payments mediation, monitoring and management infrastructure across the DnB NOR SEPA payments business Case Study: DnB NOR implements a streamlined SEPA compliant payments infrastructure Smarter Business Outcomes • Ability to accommodate payments network / gateway changes without costly changes to back-end applications • Enhanced monitoring of payments processes • Transparent payments rules that business users can comprehend; rules can be changed in hours or days vs. weeks or months

Case study - a major multi-national bank created a roadmap – building on project successes Customer centric transformation 2009-2010New focus on data quality to improve risk management, anticipate increased regulations and lower costs Managing trusted information as a strategic asset Information Optimization 2007-2008Improve insight into branch and channel performance across many levels of management Significantly improved insight into business results from C-level to branch Business Insight Business Value 2006-2007Began paper-elimination projects to improve customer service, mitigate risks & lower costs Service Process Optimization Saved tens of millions of dollars in recent years Customer Data Integration Saved tens of millions of dollars per year 2005-2006 Launched enterprise customer hub initiatives in North America, Europe & UK Time

Banks can choose from leading business partner applications enabled on IBM’s Banking Framework …with 35+ IBM business partners in the framework ecosystem • Proven integration between IBM framework middleware and industry-leading partner applications provides… • Faster deployment • Easier integration • Lower cost of operations = validated for solutions that leverage the IBM Banking Industry Framework for payments & securities

After a century of dominance by voice services, industry executives are seeing a shift in demand to a much broader set of services Global Telecom Services Revenue Mix : 2007 - 2012 75% Broadband access 12% 72% “Our ‘old’ main product (the home telephone line) is literally going away.”CEO, Telecom provider, North America Voice 17% 51% Other content and value-added services 41% 44% Video services 40% 23% Advertising 47% 0% 10% 20% 30% 40% 50% 60% 70% 80% Major-to-moderate source of revenue Minor source of revenue Source: The 2007 IBM Institute for Business Value (IBV) and Economist Intelligence EIU) Telecom Industry Executive Survey (n=252); 2008 CEO Study, IBM

Market Forces are Driving theCommunications IndustryTo Seek New Approaches and Business Models Economic Issues • Core product (Voice) is being commoditized • Cost / complexity of new services Widening Field of Competitors • New market entrants from other industries • Convergence Is spawning “Telemedia” Industry Defend Market Share and Grow New Revenues Subscriber Expectations • Demand for multimedia, services and content • Quick to abandon underperforming services • Quickly / cost effectively roll out new products • Move to lower-cost IP networks while maintaining service quality, brand image and profitability

Communication Companies Must Innovate and Be Agile To Win in the Market Lower operating coststo drive profitability Improve time to market AND quality of value added services Deliver converged voice, video AND data services Increase retention AND drive new revenue Leverage existing network infrastructure Monitor AND manage services and user experience quality Integrate services ANDconnect with backend support systems

Accelerate Service Innovation and Delivery Evolve to Optimized Operations Differentiate the Customer Experience Communication Companies Must Innovate and Be Agile To Win in the Market Lower operating coststo drive profitability Improve time to market AND quality of value added services Deliver converged voice, video AND data services Increase retention AND drive new revenue Leverage existing network infrastructure Monitor AND manage services and user experience quality Integrate services ANDconnect with backend support systems

IBM supports Communication Companies with a Service Provider Delivery Environment (SPDE) SPDE Evolution (2001 to today) 2008/9 – SPDE 3.0 2006 – SPDE 2.0 2001 – Framework introduction SPDE expanded / enhanced: • Ideation, Service Exposure and Mashups via Web 2.0 • Dynamic SOA BPM • Media Integration • Info Agenda for CSP • Service Assurance & Customer Experience Mgmt • Business Intelligence SOA SPDE enhanced with: • Service Creation • 3GPP IMS Enablers • SOA • TMF NGOSS Early SPDE Solutions • Mobile Data Services • Subscriber Management • Portal Management • eTOM Process Automation

IBM is Driving the Continuous Evolution of the SPDE Framework Telecom Investments SPDE, Digital Media Framework, SOA, CBM, Carrier Grade Open Framework, TSPM IP Multimedia Subsystems From an initial 6 to more than 2000 partner ISVs Continuous Innovation IBM Telecom Operations Pack for WebSphere Fabric IBM launches BladeCenter HT EMEA Operator SDP Gateway Acquired: Cognos iLog End to End Application Platform IBM Announces IMS Middleware Suite IBM wins SDP at Bharti Acquired: Vallent Princeton Softech DataMirror SolidDB IBM opens Telecom Solutions Labs IBM launches BladeCenter T IBM launches SDP at AT&T Acquired: Micromuse Webify FileNet MRO ISS Platform Development Acquired: Ascential Trigo DWL DataPower IBM SDP at European Mobile provider IBM launches SDP at Sprint Carrier Grade Open Framework IBM SDP at Far EasTone IBM launches Telecom Industry Partner Network IBM develops SPDE Framework Start of an Industry focus in Telecom 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

NGOSS Contracts eTOM SID TAM Personalization Portal & Presentation Profile based content Context awareness Service access Market validation Self-care access IBM’s Service Provider Delivery Environment 3.0 Device vendors Advertisers Prosumers Service providers Enterprises Content providers Application providers Developers 3rd Party Domain Partner portal Enablers exposure Rich media content Enrollment Revenue sharing SLA reporting Development and test cloud Service Execution Domain Support Systems Domain Creation Domain Process Choreographies Support integration Marketing Business intelligence Core runtime functions Customer segmentation & profiling Capacity management Processes efficiency Bundles Services registry Service applications Analytics Promotions XaaS Integrated identities Information infrastructure Content & Media Content lifecycle Content lifecycle Automation Integrated catalog Single customer view Data lifecycle Data models Warehouse Web 2.0 Presence & location Service runtime support Core BSS & OSS functions Convergent services Development lifecycle Product management Commerce Billing Assurance Ideation and collaboration Charging Service OpsCenter User Interaction Fulfillment Subscription & activation Concept and design Device management Care Systems management Development and assembly Network abstraction layer Network support interfaces Test Network Domain Capacity automation Scalable real-time data Deployment Device Domain Client centric applications Device support Server access Security Carrier grade virtualized dynamic infrastructure Machine Consumer Professional user Service Oriented Architecture

Solutions areas addressed by the SPDE FrameworkImprove time-to-market, offer new services and reduce costs Accelerate Service Innovation & Delivery Service Innovation Ideation and rapid refinement of new services Service Design/Creation Rapid creation of revenue generating services Service Execution Assemble and deliver value added services quickly Service Exposure Provide reliable, controlled, third party access to core network resources Evolve to Optimized Operations Dynamic Process Integration Streamline integration of OSS/BSS processes Information Management Optimize business and operational information Differentiate the Customer Experience Service Management Provide end-to-end service quality to ensure customer satisfaction

Case Study: Lifestyle Enabler – Creating a community around services Bharti Airtel Business Challenge • Bharti needed: • A business-driven framework for integration allowing it to implement and deliver new services rapidly • The ability to scale the business to support massive growth • 2004: 4M subscribers • 2008: 80M subscriber • 2012: 200M subscribers • Improve customer experience when shopping for content • Solution • Bharti Airtel entered into a 10-year agreement with IBM to transform its processes and take on the management of its IT infrastructure • IBM Service Provider Delivery Environment • Service Delivery Platform providing Content Services, Messaging and Partner Enablement • Mobile Portal for user interface: • 1.2M unique users per day • 200 portal views per second • 11k concurrent users • Benefits • First to offer integrated services in India • Over 1000 companies from India and abroad to partner with Bharti using their SDP by 2010 • The time to market for new service is reduced significantly — by up to 90% • Activation time for new mobile accounts has been reduced from 20 minutes to 2 minutes • The SDP helps uniquely channel advertisements to Bharti’s 80 million subscribers

IBM is Running the World’s Largest Communication Service Providers • Selected by over 1000 Communications Service Providers (CSPs) Worldwide • World’s 10 largest CSPs have implemented an IBM SOA solution • IBM Rational is used by 20 of the top 22 CSPs as listed in the Fortune 500 • 7 of the top 10 global CSPs are WebSphere Portal customers • World’s top 20 CSPs have selected Tivoli Netcool to manage their networks

Intelligent Transportation Systems Measure & improve transportation usage • Reduce traffic congestion • Reduce CO2 emissions • Increase mass transit usage • Reduce energy usage • Improve environment • Carbon Management Measure & reduce carbon emissions • Carbon Mgmt Strategy • Carbon Mgmt Intelligence • Supply chain management • Property, buildings, workplace • Advanced Water Management Measure and manage water systems usage and quality with real-time knowledge • Weather event mgmt; flood management • Real-time monitoring and analytics for water usage and water quality • Energy Efficient Technologies & Services • Create &manage efficient IT • Active energy management • IT facilities infrastructure efficiency • IT operations efficiency • Monitoring and verification of efficiency goals • Demand-side efficiency IBM is applying innovative information technology and services that really matter to businesses, governments and people Intelligent Utility Networks Measure & improve energy mgmt • Improve efficiency usage • Reduce outages • Improved grid management • Mange distributed energy

Intelligent Transportation Systems Measure & improve transportation usage • Reduce traffic congestion • Reduce CO2 emissions • Increase mass transit usage • Reduce energy usage • Improve environment Intelligent Utility Networks Measure & improve energy mgmt • Improve efficiency usage • Reduce outages • Improved grid management • Mange distributed energy • Carbon Management Measure & reduce carbon emissions • Carbon Mgmt Strategy • Carbon Mgmt Intelligence • Supply chain management • Property, buildings, workplace • Advanced Water Management Measure and manage water systems usage and quality with real-time knowledge • Weather event mgmt; flood management • Real-time monitoring and analytics for water usage and water quality • Energy Efficient Technologies & Services • Create &manage efficient IT • Active energy management • IT facilities infrastructure efficiency • IT operations efficiency • Monitoring and verification of efficiency goals • Demand-side efficiency IBM is applying innovative information technology and services that really matter to businesses, governments and peopleIntelligent Utility Networks are critical to IBM’s Energy and Environment Initiative

Market Forces Driving Utilities Companies to Seek New Approaches and Business Models Regulatory & Policy Changes Environment & Climate Expectations of Financials Markets Security Customer Expectations Volatile Energy / Fuel Costs Technological Advancements Aging Assets & Workforce Dynamics

IBM Utility IBM COMMUNICATIONS LINK IBM IBM Medium Voltage Line Comm node Meter Cell relay IBM Comm node IBM Market forces are moving us to become a smarter utility a 21st Century Grid Digitization of “World’s Largest Machine” • Rich source of information • Exchanging information across the enterprise & with customers • Advanced tools to create value from information Expanding Virally … • Billions of linked devices • Highly complex energy flows • Highly complex information flows • Elevated role of consumer • Moving even faster than forecasted

Solutions for the Energy & Utility Industry are supported by IBM’s SAFE (Solution Architecture For Energy Utilities) Framework SAFE Framework Third Party Domain Business Domains Transmission and Distribution Customer Operations Generation Intelligent Utility Network Supply Expansion Fleet Mgmt Plant Operations Customer Systems Customer Mgmt Customer Care Enterprise Asset Mgmt Advanced Meter Mgmt Network Automation and Analytics Shared Services and Governance Infrastructure: Servers, storage, and associated services

Solution areas addressed by the SAFE Framework • Manage and maintain utility assets Manage every aspect of each asset’s life cycle including acquisition, compatible unit estimating, work management, inventory control, purchasing, preventive maintenance, safety and disposal • Enable business process orchestration Support new business processes that cross domains. Identify and optimize bottlenecks in your business processes • Improve service management of assets Enhance the value of the outage and distribution management systems Gain insight into quality of power delivered to customers Facilitate predictive maintenance through better information • Perform regulatory, risk, and compliance management Manage a broad and diverse set of regulatory documents in the enterprise Monitor and log access and changes to critical assets • Leverage data for informed decision making Gain customer insight and improve customer satisfaction Effectively manage meter data to better understand operations Manage energy and carbon credit trading activities

IBM Industry Frameworks Building Smart Solutions