Siemens 2006 Annual Report Download - page 139

contract revenue. Such estimates are subject to change based on new information as projects
progress toward completion. Loss contracts are identified by monitoring the progress of the
project and updating the estimate of total contract costs which also requires significant judg-
ment relating to achieving certain performance standards, for example in the IT service busi-
ness, and estimates involving warranty costs.
Non-financial performance measures
In fiscal 2005, we initiated a program called Fit4More consisting of four main areas with the
goal to achieve lasting profitability and growth (see figure below). The financial goals are
defined in the area Performance and Portfolio, which aims at reaching the target margins of
our Groups, building a portfolio that enables us to grow at least twice the global gross domes-
tic product and completing the strategic reorientation of our business area Information and
Communications and the Group L&A. The drivers of Portfolio and Performance are defined in
the other three areas of our Fit4More program: Operational Excellence, People Excellence and
Corporate Responsibility. These areas are predominantly determined by non-financial per-
formance measures.
Within Operational Excellence we execute our Siemens Management System initiative,
which focuses on innovation, customer focus and global competitiveness
With People Excellence we create a working culture that motivates our people to yield high
performance results. Our Siemens Leadership Excellence (SLE) program serves the deepening
of business know-how and the advancement of leadership capabilities of Siemens managers.
Our Top Talent Pool enables us to identify our top talents and systematically foster their fur-
ther development. Furthermore we systematically enhance the status of our technology
experts by offering them attractive career options through our standardized Siemens Expert
Career program.
Corporate Responsibility comprises our commitment to the society. This includes Corporate
Governance as the basis of all our decision-making and monitoring processes, Business Prac-
tices to conduct our business in compliance with the laws and regulations of the countries
where we are active and in accordance with our own binding guidelines, Sustainability as a
basis for our future business success and Corporate Citizenship by the company’s programs
to support science, education, culture, the arts and our commitment to social projects, as well
as our engagement in important national and international organizations.
For further information with regard to our Fit4More program see “Fit4More – The basis for
a successful future” on pages 16– 31 of the annual report.
Management’s discussion and analysis 135
Management’s discussion and analysis
Performance and Portfolio by April 2007
• Reach target margins in all Groups
• Build portfolio for 2X global GDP growth
• Strategic reorientation of I&C and L&A
Operational Excellence
People Excellence
Corporate Responsibility
A comprehensive and logically structured program with clear goals and clear drivers
Drivers Goals
Fit4More