Facing to the ongoing globalization trends, and to position Advantech as a competitive player in the fast growing vertical markets, Advantech will launch a comprehensive Globally Integrated Enterprise (GIE) transformation program from now on and throughout year 2008.

For years, Advantech has been actively expanding its global presence to accommodate market needs. All these efforts have transformed Advantech into a Multinational Corporation (MNC) spanning Europe, North America, South America and all of Asia . Recently, Advantech has experienced slower than expected growth. I believe that one of the root causes is the out-dated MNC structure. The "GIE" term was invented by IBM and has been adopted by many successful global enterprises ; I firmly believe GIE is also the right way for Advantech to expand into the future.

Advantech's present organization and operations are still based on the traditional MNC model. This model sets boundaries between product divisions and sales regions, which limits our potential growth in this ever changing and competitive global market. The more I study the situation, the more I believe we need to transform Advantech into a real GIE company to facilitate the next generation of growth. To be competitive, we need to change from the one-headquarter-multi-regions model to the GIE model. In the GIE model, the key success factors are to establish direct command chain and end-to-end domain knowledge transfer within each vertical sector from the product divisions to the sales teams. Another key factor lies in serving the vertical markets from the customers' point of view. Sales teams will no longer be limited to selling products from just their own product groups ; they will also sell products from other groups, and even external alliance partners to deliver total solutions. This cross-product division collaboration will also help to reduce redundant resource consumption and internal conflicts.

In terms of market positioning, Advantech will adapt to supply Application-Ready Platforms and Service-Ready Platforms, in addition to existing General Computing Platforms, with special emphasis on developing the Industrial Automation, Medical Computing, Gaming, Self-service, Real Estate Intelligence, Vehicle Computing, and Digital Signage vertical markets. Besides vertical sectors, we will continue to serve existing general ePlatform customers with our current segmentation models: Design To Order Services (DTOS) for key accounts, Channel Sales Forces (CSF) for channel partners, and Direct Marketing Forces (DMF) for general accounts.

As vertical sectors conduct end-to-end communication across regions, regional heads will become enablers who coordinate, administer and host the local working infrastructure. Most regional heads may also take lead in one key vertical business sector. With regard to supply chain management, the newly established Customer Fulfillment Center (CFC) will streamline the logistics process and provide customers with effective end-to-end services. The whole idea is to optimize Advantech's business process and work flow at the right place with the right talent, regardless of their location and department boundary. Human resources, accounting & finance and MIS will be channeled from HQ to leverage back-office functions and provide timely and consistent service to globally-located business units.

All GIE operations and processes will be systematically designed with help from IBM's professional consulting service. Later this year, the company will formally announce the GIE organization adjustment to kick off this new GIE model in 2008. The Finance Department will start setting the GIE budget for year 2008 in Q4. The budgeting system for the regional offices will move from the current "RBU ITP (Internal Transfer Pricing) Mock-up" model to a new matrix fixed-budget model. Then, hopefully by 2010 Advantech will be a fully-fledged GIE. I predict that these new changes will foster both the professional growth of our global business as well as the personal growth of all Advantechers.

KC Liu, CEO of Advantech