Siemens 2008 Annual Report Download - page 151

Management’s discussion and analysis 55
R&D in the Energy Sector focuses on more efcient and effective ways to generate, transmit and distribute
energy. Examples include coal-red power plants with an efciency rating of 50% that are expected to emit 40%
less carbon dioxide per kilowatt hour than today’s power plant; combined-cycle plants in which the exhaust heat
from a gas turbine generates steam for other steam turbines; oating wind turbines for use far offshore; and
technologies for carbon dioxide capture and storage.
As a result of recent acquisitions, our Healthcare Sector has become the rst company capable of offering
a comprehensive diagnostics chain incorporating the key solutions of “in vitro” and “in vivo” diagnostics in con-
nection with information technology for laboratories, hospitals, clinics and doctors. Thus one focus of R&D at
Healthcare is increasing integration among these disciplines, so that healthcare professionals can diagnose dis-
ease at an early stage with information from multiple diagnostic sources and better personalize the therapy for
patients. Healthcare R&D also includes focused work on the Sector’s core imaging technologies as well as minia-
turization, instrument throughput, and other topics essential to the eld of advanced medicine.
Global SG&A program
As mentioned above, we initiated a global SG&A reduction program in scal 2008 as part of Siemens’ transfor-
mation programs, with the goal of securing our competitive position against the backdrop of an impending
global economic downturn. The program is targeted at improving the efciency of the selling and administra-
tion processes in our corporate functions, in our Sectors, Divisions and Cross-Sector Businesses, as well as in
our regional Clusters.
Under this program, we intend to reduce global SG&A costs until scal 2010 by approximately €1.2 billion from
the level of scal 2007. We plan to achieve some of these reductions by cutting expenditures for IT infrastructure
and consultants. Savings in personnel are also part of the SG&A program, now that the company has consider-
ably streamlined its top management. Substantial synergies are also being generated internally following the
formation of three new Sectors from previous eight Groups. In addition, Siemens is bundling a large number of
administrative tasks of its roughly 70 Regional Companies into 20 Regional Clusters. The total cost reduction
target was allocated to the Sectors, Cross-Sector Businesses and central functions as well as to the regional Clus-
ters, in order to manage this global project effectively.
During scal 2008, a number of key drivers were identied to support the achievement of the overall cost reduc-
tion target. The following chart includes the scal 2007 starting point as well as the scal 2010 target values of
our most important drivers.