Siemens ShareNet - Building A Knowledge Network

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9-603-036
NOVEMBER 5, 2002
ALAN MACCORMACK
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Siemens ShareNet: Building a Knowledge Network
The Siemens Information and Communication Networks’ (ICN) group boardroom had grown
stuffy through the long July 2002 afternoon. On the upper floor in one of Siemens’s many Munich,
Germany buildings, the fate of ShareNet, an innovative knowledge management initiative, was on the
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agenda. Joachim (Joe) Döring, president, ICN Group Strategy; Marc Widuch, vice president, ICN
Group Strategy-Competence and Knowledge Management (GS-CKM); and Andreas Manuth, manager
of ShareNet and a GS-CKM member, were hashing out the challenges they faced. They were to meet
with ICN’s board in a few days, when they would be asked to propose a strategy for the future of
ShareNet. Fostered in the ICN group in early 1998, ShareNet had grown from a small experiment to a
tool that was widely used by ICN’s sales and marketing staff.
At the top of the agenda was the meltdown in the telecommunications industry, which had
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precipitated major cutbacks throughout ICN. Döring and his Group Strategy team faced pressure to
cut costs, and as a result ShareNet was likely to come under increasing scrutiny. While the tool had
been created under Döring’s budget, some thought it time that ICN’s five product divisions, which
used it as a resource, were asked to pay for ongoing development and support. After all, with 19,000
registered users, ShareNet must be adding significant value to these businesses. Other members of
Döring’s staff, however, were not as convinced that this was the right move. What if the divisions did
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not want to pay? Measuring the benefits that came from the use of knowledge management systems
was notoriously difficult. Perhaps these initiatives were better funded as a corporate initiative and
provided free to all who wished to use them.
Adding to Döring’s dilemma over how to fund ShareNet were questions over its broader
implementation. A recent experiment to implement ShareNet among some of ICN’s research and
development (R&D) centers had met with positive feedback. Yet the model for extending ShareNet to
other functions and groups was still not clear—should these be designed as separate knowledge
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networks or as part of one supersized knowledge management “club?” With such important issues
needing to be resolved, it was clear there would be no early trip to the beer keller tonight.
Siemens AG: A Short History

Between 60 percent and 80 percent of value-added we generate is linked directly to knowledge—and the
proportion is growing.
— Heinrich von Pierer, president and CEO, Siemens AG
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________________________________________________________________________________________________________________
Professors Alan MacCormack and Sven Voelpel, Visiting Fellow, Faculty of Arts and Science, Harvard University, University of St. Gallen, and
Stellenbosch University and Research Associate Kerry Herman prepared this case. HBS cases are developed solely as the basis for class discussion.
Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
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This document is authorized for educator review use only by AMIR MANZOOR, Bahria University until Apr 2020. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
603-036 Siemens ShareNet: Building a Knowledge Network
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Founded in Berlin in 1847 by cousins Werner and Johann Georg Siemens along with Johann Georg
Halske, Siemens started as a small precision-engineering workshop manufacturing electrical telegraph
systems, warning bells for railways, and wire insulation. Spreading telegraph lines across Germany,
the company soon established branches in St. Petersburg, for Russian lines, and London, for English
lines. In 1866, Werner Siemens discovered the dynamoelectric principle, expanding the company’s
applications for electricity. A series of power-engineering innovations followed in quick succession,
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including the first electrical railway and installation of streetlights in Berlin (1879), the first electrical
elevator (1880), and the first electrical streetcar (1881). The company’s products expanded to include
dynamos, cables, telephones, electrical power and electrical lighting, and by the 1920s they
encompassed medical engineering—including medical diagnostic and therapeutic equipment, X-ray
machines, and electron microscopes—wireless communication, and household appliances.
Components, data processing systems, automotive systems, and semiconductors were added
following World War II, when the company rebuilt in Germany and began expanding into foreign
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countries.
By 1998 Siemens employed over 416,000 people in 190 countries. Sales topped 60.1 billion euros
(€),1 and products ranged well beyond electrical and medical engineering to include networks, mobile
phones, and business services as well as services for financing, investment, treasury, fund
management and insurance, real estate development, management, and leasing. The company had a
decentralized corporate structure, with a separate Supervisory and Managing Board as stipulated by
the German Stock Corporation Law. Beneath that, each company unit had its own executive
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management, overseeing groups, regional units, and corporate units and services. (See Exhibit 1 for
Siemens’s financials.)
Siemens ShareNet: Early Beginnings2

ShareNet: More than a tool, it’s an experience.
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— Donald Tsusaki, head, IT Knowledge Platforms
Siemens’s telecommunications business had evolved from the early days of constructing telegraph
systems into providing telecommunications equipment globally. Up until the mid-1990s, competing in
the telecommunications industry was fairly straightforward. Customers, primarily state-owned
telephone companies with a monopoly in their home markets, sought well-defined products, which
they integrated into their networks themselves. Manufacturers focused on producing quality products
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for highly specialized customers. Manuth acknowledged, “When it came to maintaining a competitive
position, quality and reliability far outweighed speed and responsiveness.”
As the end of the decade closed, however, the telecommunications industry had shifted
significantly. Competition, deregulation, and a surge in data traffic wrought global changes across the
industry. Networks originally designed for voice traffic, were increasingly called on to carry a
convergence of voice and data. Siemens, like other telecommunications product manufacturers, was
forced to change from a “simple” product provider to a complex customer-oriented organization that
provided customized solutions and service. New skills and a new mind-set were required.
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1 Summer 2002 exchange rate: $1=€1.03.
2 The following sections draw on Michael Gibbert, Petra Kugler, Sven Völpel, and Marius Leibold, “Getting Real About
Knowledge Sharing: The Premium-on-Top Bonus System,” in Knowledge Management Case Book: Best Practices, eds. Thomas
Davenport and Gilbert Probst (New York: John Wiley, 2002); and S. Völpel, P. Kugler, and M. Gibbert, “Siemens’ Premium-on-
Top: Measuring knowledge management with a bonus system for fostering innovation,” University of St. Gallen Case #902-
0120-1 (Beresfordshire, England: European Case Clearing House, 2002).
Siemens ShareNet: Building a Knowledge Network 603-036
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Siemens underwent a significant restructuring in 1998. As part of the overhaul, the carrier and the
enterprise branches of Siemens’s Telecom Networks merged into a new group called Information and
Communication Networks (ICN). ICN included the Wireline Networks Group (encompassing
enterprise, carrier and broadband, and carrier divisions), Communications on Air, IP/Data Networks,
Transport Networks, Manufacturing and Logistics, and Service and Carrier Networks. The new group
employed 65,000 workers in over 84 countries, with 17,000 sales and marketing staff generating
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revenues of €12 billion.3 (See Exhibit 2 for ICN’s organizational chart.)
The Core Idea: A Global Knowledge Network

The telecommunications industry was changing quickly and radically; new carriers were cropping
up across the globe, offering service, solutions, and products, and market volume was moving away
from incumbents to start-ups. Manuth recalled, “Many of these start-ups still needed Siemens’s
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technology—the “boxes” [products]—and some had money and ideas about how to make more
money from them. But they also needed consultancy about how to use these products—in other
words, solution providers.” The group needed to figure out how to shift its offerings from pure
technology products to a mix of products with solutions. As a longtime leader in the field, ICN knew it
had reams of experience to tap into; there had to be a way to exploit the extensive expertise and
experience of 65,000 ICN workers. The question was what form such an activity should take.
To identify the unique opportunities facing Siemens as the industry shifted, an internal ICN
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consultancy group, Business Transformation Partners (BTP),4 teamed with a group from Boston
Consulting Group (BCG). Alfons Kuhn, a member of BTP, noted: “We had poor reuse of customer
solutions across our sales regions; best-practice sharing in sales was nonexistent, or at best accidental,
and what little sharing and solution exchange we had was not institutionalized. We needed to build a
global community of knowledge and best-practice sharing.” Manuth added, “In the past ICN had
relied on centralized flows of information to and from units. We wanted to dramatically shift from that
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approach to globally networked flows of knowledge.”
Döring and the BTP team decided the knowledge management project should focus on ICN’s sales
and marketing staff, since it had the greatest need and opportunity for sharing knowledge. With a
well-designed knowledge management system, an ICN sales and marketing team in one part of the
world that was facing the challenge of winning a lucrative new contract could speed its bid, and
strengthen its proposal, by tapping into the experience of an ICN team that had already successfully
won (or attempted to win) a similar contract in another part of the world. One BTP team member
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explained:
We knew that knowledge sharing between local project teams within a country—focusing on
the same market, with the same competitors—would lead to advantages. But we also wanted to
work out how this knowledge could be leveraged globally. Looking at the industry, it was clear
that telecommunications markets around the globe were in vastly different stages of
development. We positioned each country on a two-dimensional graph, based on its stage of
economic development and the development of its telecom landscape—its regulatory
environment. We realized that countries in the same market stage would have similar telecom
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needs. And of course, as each market developed, we could leverage solutions from the next
market stage—from a more economically developed country to a developing country.
3 Siemens Annual Report, 1999.
4 This became the Group Strategy team in November 2001.
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The idea of developing a knowledge management system was not new. Since the 1970s, firms’
increased levels of computerization had made all kinds of data—ranging from employee or customer
information, supplier and partner payment processes, records of transactions, and prospect leads—
readily available for analysis. But, for the most part, these systems had had a poor history of success.
Many were nothing more than a repository of engagement proposals or sales bids, often in the form of
the original PowerPoint presentations made to a client. Truly capturing knowledge was much more
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complicated than just storing information. As another BTP team member noted:
Most knowledge management systems focus on “codified” knowledge, knowledge which

can be easily transferred through databases, reports, or documents. They omit any consideration
of “tacit” or experience-based knowledge, which is more commonly transferred through social
interactions, for example, in meetings, phone calls, or videoconferences. But one is no good
without the other. Both types of knowledge need to be transferred in order for true knowledge
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sharing to happen. So we had the goal of designing a system that captured both elements—the
codified part and the tacit or personalized part.
Döring’s group’s first meeting was held in 1998 at Frankfurt Airport. He brought together a select
group of ICN’s most successful salespeople and asked: “How do we sell solutions?” Team members
developed a detailed map of the solution-selling process, identifying the broad categories of business-
knowledge relevant to each stage. (See Exhibit 3 for examples.) They also discussed the form that the
tool should take. Ideally, it would exploit the familiar technology employees interacted with on a daily
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basis, such as e-mail and the corporate Intranet; it would provide a single sign-on, enable database
searches with specific keywords, and allow browsing by topic. To solve the problems associated with
traditional knowledge management tools, the team envisioned a platform comprising multiple
elements: a “knowledge library,” a way to field “urgent requests,” and forums for sharing knowledge,
such as live chat rooms, community news boards, and discussion groups on specific issues. The plan
was to create a virtual bullpen of ICN sales teams.
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The chief innovation in the new system was to be the knowledge library, which would consist of
thousands of knowledge “objects.” These objects would be structured to codify what had been
learned in projects under way or completed. ICN’s solution-selling process was divided into separate
categories; “solutions objects” described technical or functional solutions to problems, whereas
“environment objects” included data on specific markets, projects, partners, competitors, and
customers. These categories were designed to capture the spectrum of experience-based knowledge in
the sales and marketing process; keywords were used to search within a category.
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The details of each object would be entered in online entry forms by participating project team
members. Critically, however, the entry forms were structured as questionnaires, with the object fields
posed as question-and-answer blanks. (See Exhibits 4 and 5 for sample screen shots and object
design.) These questionnaires encouraged personal statements, comments, field experience, and “real
life” feedback on implemented solutions. Manuth noted:
It was important to give people the opportunity to explain their experiences gained in the
field and to describe the solutions they had invented. We were anxious to avoid this becoming
another typical “knowledge management” tool failure—just a document depository. And we
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didn’t want it to be brochureware. We knew we needed to capture some of the “tacit”

knowledge managers had in their heads—the real life-tested pros and cons of a solution. So we
had to ask questions that managers wouldn’t necessarily think about after just completing a bid
or project document. It was explicitly designed as an interactive medium.
For each type of object that the system held, a series of tailored questions would lead the user
through giving their input. For example, contributing a technology solution object required answering
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questions such as “What type of technology is this?” “What are the key features of this technology?”
and “What keywords would enable other users to find this contribution quickly?” In addition to
replying to this series of questions, the contributor could also attach any files that were relevant to the
object for users to view further details.
The second critical part of the ShareNet system was to be the “urgent request” section. This was
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where urgent questions could be posted for anyone to respond to, the idea being that users would
check the list regularly to see if there was a problem that they could help with. Examples included
questions such as “My customer needs a business case for implementing this new router technology
by next Monday. Can anybody help?” or “Does anybody have a list of recent network projects by this
competitor?” (See Exhibit 6 for sample urgent request screen shots.) Manuth noted:
Urgent requests are like asking the whole world for help. You don’t know where the answer
will come from. For example, one ICN project manager in South America was trying to find out
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how dangerous it was to lay cable in the Amazon rain forest. He wanted advice on the type of
insurance his project needed. The manager sent out an urgent request asking whether anyone
had experience with this specific challenge and environment. A project manager in Senegal who
had encountered a similar situation responded within several hours. Getting the right
information before the cables went underground ended up saving millions of dollars. Plus next
time this manager has a similar problem, he knows who to consult first.
In combination, the knowledge library, the urgent request hotline, and the various chat and
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community boards would make ShareNet a living interactive tool. Don Tsusaki, head, ICN IT
Knowledge Platforms, elaborated on the power of the ideas behind the system:
Historically, the transfer of knowledge has happened verbally. But that’s terribly inefficient.
You have to be at a particular place and time to make it happen. The first attempt at codifying
and disseminating knowledge—the printing press business—got rid of the time and space
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problem. But there’s no way to codify all your experience into a book. And it’s still one to many;
there’s no interactivity. With a tool like ShareNet, we add dynamism. We leverage the Intranet,
not only as a one-way publishing thing, but in having everybody contribute, on a democratic
basis—a truly interactive exchange. You can put an idea up and have many people view it—you
start hearing from people who never would have been involved, who you never knew had any
experience or knowledge about the topic. You get this congealing of knowledge, from all sorts
of places. And that in itself creates a new body of knowledge.
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ShareNet Takes Shape

After the network meeting at Frankfurt Airport, ten meetings followed throughout the various
regions, with a final meeting in Garmisch, Germany in December 1998. During this time, Döring began
to select the members of his core ShareNet team. The team began mapping out the details of how the
technology and managerial processes around ShareNet should operate. Manuth recalled:
There were two ways we could go about developing the technology. We could do it here in
Munich and roll it out to the rest of the company across the globe. We’ve had plenty of
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experience in doing that—that’s the typical Siemens way—and we’ve had plenty of failures this
way. Or, we could go out into the field and ask people, “How should we do this?” And that’s
what we did.
ICN engaged a Web development firm to develop the first version of the system. From April to
August 1999, pilots were run in China, Malaysia, Portugal, and Australia. The aim was to get feedback
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from the users who would depend on it the most—those located far from Munich’s hallways. But the
initial version was not well received. The look and feel of the interface was too complex, while the
system’s performance was poor. So the overall vision was redefined; content would be kept as simple
as possible, with no graphics or other large files to download for those accessing the system over a
low-bandwidth connection. The ShareNet team also chose a new technology partner, ArsDigita, an
open-source content management provider. ArsDigita revamped ShareNet using a customized version
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of its Community Server software.
By August, after much discussion and refinement, the pilot teams had checked and vetted the
general concepts for the system, while Döring’s team had started to make headway on getting buy-in
for ShareNet at the local level. General rules for ShareNet’s use had been defined, such as the use of
English as the standard language. Ready for launch, Döring sent 60 ICN managers to an impromptu
bootcamp to build a sense of camaraderie among the system’s evangelists and to discuss how the
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ShareNet community should operate. Lake Starnberg, south of Munich, provided the site; Döring
brought the group to its shores and told them to build rafts. A report of the adventure:
All they had to work with were steel drums, logs, pontoons, and some rope. Another catch:
No talking. The managers, who gathered from offices around the world, could only scribble
messages and diagrams on a flip chart. For the better part of a day, it was knowledge-sharing at
its most basic. Yet the group managed to put together a small fleet of rafts, which they paddled
about triumphantly on the placid waters of the lake.5
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As ShareNet went live in August, responsibility for its strategic direction was handed to a new
ShareNet committee, comprising 11 members: one from ICN’s board, two from ICN’s Business
Transformation Department, and the remainder from users of ShareNet in the local companies.
Boot-strapping the Network

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With the first version of the system up and running, the group faced the challenge of getting people
to use it, especially getting managers to populate the database with existing knowledge and
documentation of projects under way or completed. Manuth remembered:
The first challenge was trying to get the word out. We were constantly marketing it. We put
the logo on anything that moved—pens, caps, posters, pencils, stickers—you name it. We had to
get as many people online as quickly as possible. The only way urgent requests would succeed
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was if we had a high number of users on board. And we had to get people willing to respond to
urgent requests. At first the core ShareNet team fielded these problems themselves. They would
comb their personal networks of contacts to find solutions to posted urgent requests. They
would then connect their contact with the poster themselves, sometimes offline. The system had
no value until the database was populated and urgent requests were answered. It was a
chicken-and-egg problem!
To jumpstart the network, we held two- to three-day workshops in the local countries to get
each local company on board, to get them used to the system and interface, and to convince
them of its value. We had an exercise we’d run at every workshop. At the beginning of the
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sessions, we’d tell them: “You must have some problem that isn’t solved—that you left sitting
on your desk before you came here. Put that up on the system as an urgent request.” Without
fail, by the end of the day, that posting would get at least one reply, and inevitably the effect
was that the person who had posted it would be stunned. They’d say, “Wow. This works! I
5 Jack Ewing, “Sharing the Wealth,” BusinessWeek E.Biz, March 19, 2001.
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never would have figured this out on my own. This saved me so much time.” And everyone
else in the room would see the effect too. So they’d go home convinced.
We also nominated handpicked local company representatives called “ShareNet managers”

to promote the system within their region. These managers were tasked with monitoring usage
at the local level, but they also fielded a lot of the early urgent requests.
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To support the network, Döring’s group employed a number of dedicated ShareNet consultants,
based out of Siemens’s Munich headquarters. They provided support to local country subsidies,
running conferences to set up each of them and interfacing with the ShareNet managers once a
country was up and running. ShareNet consultants also policed the network, monitoring contributions
for quality and offering feedback where they thought appropriate. Ultimate control over the quality of
content lay in the hands of the “global editor.” Their role was to ensure the clarity and usefulness of
contributions, assessing their potential for reuse throughout ICN and checking the ease with which
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submitted solutions could be understood. Manuth explained:
The concept of ShareNet was more about the managerial system and processes than the
technical platform. Especially those processes such as content editing that focused on the input
of knowledge and the elevation of this knowledge to a more reusable [i.e., abstract] form.
Putting together the team to drive ShareNet forward was therefore complex. Getting people to
man the user hotline and provide IT support was straightforward—people knew how to tackle
those tasks. But getting people to be ShareNet consultants was much trickier. None of us had
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been in the knowledge management business. We came from areas like Web publishing, R&D,
training, sales, and change management. In the end, it came down to a case of “We understand
what Joe and his team are trying to do, we like it, and they like us.”
These early efforts quickly began to pay off. After each country’s workshop, the team would see a
jump in urgent-request postings from that country, and thereafter, a trickle of knowledge objects
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would begin to flow. By the end of 1999, ShareNet had 3,800 registered users. As expected, benefits
were being felt most immediately in Siemens’s more remote locales. Manuth recalled:
Munich has all the power, and the local network here gives you all the knowledge you need.
If you have a problem, there is probably someone who can answer it within shouting distance.
But out in the jungles it is a different story. For example, we had an official hotline for engineers
in the field to call in to get technical help for one of our switches. If someone in Vietnam had a
problem with the switch, they were supposed to call the hotline. Over and over again, we heard
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“No one ever calls me back. We’re too small.” But with urgent requests, ShareNet gave them
access to other people like them, struggling with switch problems out in the field—people who
would call them back. Or at least drop them an e-mail.
Since Siemens’s product divisions and local companies were not charged to use ShareNet, users
could just log on and start using it; headquarters absorbed all the costs, which by the end of 2000 were
reported to total $7.8 million.6 Manuth noted the tremendous benefits of this approach: “Nobody has
to get a signature for spending money to use ShareNet. For example, in Brunei, I think there is just one
technical salesperson, he has just come on to ShareNet, and now he is connected to all the other ICN
technical salespeople. He’s so much happier.”
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6 Ewing (2001).
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Creating Incentives for Use
Our slogan was: “You are no longer in school. Copying is allowed!”
— Gerhard Hirschler, ShareNet manager, Carrier Sales, Europe and Middle East
ShareNet faced two problems as it tried to gain momentum: getting people to contribute, rather
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than lurk in the midst of others’ contributions and getting people to rely on it for solutions. Gerhard
Hirschler, selected as a ShareNet manager early on, explained some of the challenges:
There were always excuses. People said, “I haven’t the time to spend on this.” Others were
reluctant to share. The network consultants, for example, say, “Sure, we have knowledge, but
it’s for sale, it’s not for free.” Still others said, “Everyone has a certain clearness about their own
projects in their heads, but it won’t translate well for others.” Then we were concerned to
manage people’s expectations, that they might be disappointed in their first interactions and
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that would turn them off. We didn’t want them saying, “I got a stupid answer on ShareNet,” or
“I asked a good question, but people are passing me around, saying ask someone else.” We
were also up against the biggest prejudice of all, a negative perception over re-use. This is a firm
of creative, technical problem solvers. Using an already existing solution to your unique
problem went against the grain. We had to actively encourage this form of reuse—or copying.
The core ShareNet team constantly brainstormed ways to embed the system into Siemens’s and the
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local companies’ cultures. Hirschler explained:
In the beginning it was rather philosophical, so we were missionaries. We published articles

which supported the philosophy: “It’s good, use it.” Behavioral things, we even looked at
animals, how they behave—dogs rely on each other and hunt in packs—things like that. And
we spread that in ShareNet to create the community. We said, “We have experts in every
culture and field of activity. Before you go somewhere and come back with a bloody nose, you
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can find out the key factors about the place in ShareNet.”
In support of these efforts, the team soon began to experiment with incentive schemes to motivate
ShareNet’s use and adoption. Manuth recalled:
The first system was called Bonus-on-Top. It provided incentives for local country managers
and rewarded a country’s overall participation in knowledge sharing. If a country’s sales team
managed to secure a certain amount of business with the help of international knowledge
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sharing, they received a bonus. The bonus counted for both the country that contributed the
knowledge and the country that used it.7
This first attempt had only mixed success. While the majority of country managers received the
bonus, costing Siemens a significant amount of money, it was not clear that ShareNet itself was
benefiting. One user commented, “Receiving some . . . award naturally serves as an incentive to
sharing our knowledge with colleagues worldwide, but it is not the most important aspect. Getting
direct recognition for how much our daily job is appreciated is the most important thing. That’s what
counts and motivates us.”8 Manuth recalled, “We decided to focus more on the users themselves.”
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7 Management teams were rewarded bonuses of close to ten percent of their salary (local currency) when revenues achieved
through international collaboration totaled at least five percent.
8 Völpel, Kugler, and Gibbert (2002), p. 14.
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At the beginning of 2000, a program was launched where ShareNet users could collect points called
ShareNet shares, similar to frequent-flyer miles. Users earned shares for entering knowledge objects
into the library, answering urgent requests, reusing knowledge, and rating one another’s
contributions. Urgent-request responses, for example, earned three shares; contributing a success story
earned 20 shares; a project, technical solution or service, or functional solution component also earned
20 shares; technology objects or market or customer objects earned 10 shares. In May 2000, the top 50-
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point collectors were invited to New York City with their partners for a conference on ShareNet.
Subsequently, a scheme was implemented whereby ShareNet shares could be redeemed for various
gifts and prizes such as text books, Siemens-manufactured mobile phones, computers, PDAs, business
training, or trips to knowledge-exchange partners. (See Exhibit 7 for examples of awards.) One share
was equivalent in value to approximately one euro.
The scheme prompted significant increases in the quantity of contributions—in 2000, over 396,000
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shares were awarded. But quality problems began to creep in. As a result, the team began to examine
various measures for providing quality control, establishing both a rating system and stronger
editorial control. From now on, contributions would be rated by knowledge users, with the number of
stars reflecting their usefulness. Providing feedback was also rewarded with shares, encouraging users
to rate contributions once they had been used. Next, the global editor was designated as the arbiter of
all rewards. When a user wanted to cash in her shares, the global editor would evaluate her
contributions and ratings before approving the award. Finally, ShareNet put peer pressure to work—
details of ShareNet members, including all their contributions and their level of usefulness, could be
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viewed by everyone on the system.
Periodically, limited-time promotions were used to increase new object contributions and feedback
on existing knowledge objects. For example, from February to July 2001, rewards of shares for some
contribution types were doubled. This limited-time promotion had a tremendous impact on object
publication and feedback postings. In July, 2,328 objects were published, compared just over 600 three
months later; similarly, 76,075 shares were earned in July compared with just 19,330 three months
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later. Manuth acknowledged, “We were extremely surprised. None of us expected anything near this
kind of response.” (See Exhibits 8 through 11 for statistics on objects published and shares awarded.)
The final area where the team decided to create incentives for performance was in the role of
ShareNet managers. These managers could earn up to 120 percent of their monthly fixed salary as an
annual bonus, based on how well they handled their responsibilities. In addition to monitoring use
day to day, these duties ranged from overseeing the input of completed projects, to encouraging
general use, to helping resolve urgent requests by drawing on managers’ network of contacts (built
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over many years with Siemens). Hirschler commented:
When a project was completed, I would do a group discussion with project members—with
the people I could get hold of. I’d go through my standard questions then fill in the objects on
ShareNet. You don’t do it to the last detail, but in a 20-question analysis you can get at the big
gains and losses. Getting something of substance—the bare bones—takes me an hour, maybe
two hours at worst. I put that up, then the rest of the team looks at it and fills in the details. You
can put half or three-quarters of whatever you have up on ShareNet to start with, as long as
there is substance to it—it won’t be a dead fire, people will add to it, it stays alive.
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The other role is that you must keep track of what people are using it for—it’s a little bit like
KGB activity. From time to time you publish statistics for your division, noting “Our group
always seems to be asking questions, we’re not giving answers, we are not putting any projects
in, we should change that,” things like that. Finally, I also try to identify other ShareNet coaches
in my division’s smaller groups and keep them as happy and as motivated as possible. So that
they beam, and everybody looks at them and says “I want to use ShareNet.”
t
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Administrative tasks associated with managing ShareNet ranged from ten percent to 50 percent of
a ShareNet manager’s time. Manuth commented:
We did a short survey to assess ShareNet managers’ efforts. We found a range from zero
percent—ShareNet managers who did this outside of work or after work because they didn’t
have time during the day—to others who spent 50 percent of their time managing ShareNet. But
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the overall average was 10 to 15 percent of their time. It’s very different for everyone. We have a
ShareNet manager in the Netherlands, for example, who at first managed it as an after-work
activity, then at some point because he could prove ShareNet was successful and made his
group productive, he was able to spend more time on it during work, until he was basically a
full-time ShareNet manager. Now he’s back to zero because he’s on other important things. It’s
very much related to how important ShareNet is to the current projects at the local level.
In support of managers’ activities, ShareNet conferences were held regularly around the world,
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bringing ShareNet managers together. Hirschler remarked, “We come together from different places in
the world, we become personally acquainted, and friends at times, or at least very good colleagues.
This is the network that keeps it going as it branches out more and more.”
As ShareNet’s reach grew, so did the list of stories illustrating its potential impact. For example, in
Switzerland, Siemens won a $460,000 contract to build a telecommunications network for two
hospitals even though its bid was 30 percent higher than a competitor’s. The clincher: Via ShareNet,
colleagues in the Netherlands provided technical data to help the sales reps prove that Siemens’s
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system would be more reliable.9 Meanwhile, in Malaysia, ShareNet helped land a $3 million contract
to build a pilot broadband network. The local team needed to provide a reference customer in its
proposal and discovered a team in Denmark that had done a nearly identical project. Using the
Denmark group’s experience, the Malaysian team won the job.
By the end of 2001, ShareNet had signed up 18,200 users. In a typical month, these users would
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contribute around 300 to 400 new knowledge objects and answer 80 percent to 90 percent of several
hundred urgent requests (see Exhibit 12 for statistics on urgent requests). However, not all were active
contributors. Manuth noted, “Across all of ICN, we calculate that about 80 percent of users read
ShareNet regularly but don’t contribute, about 15 percent contribute once in a while, and about five
percent are heavy users.” Hirschler added, “But we don’t let them get comfortable. We register the last
time they logged on to ShareNet, and we ask managers to make them active or to get them out.”
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Expanding the Reach of ShareNet

During 2001 Felix Baumann, a ShareNet consultant, gave a presentation to the Wireline Network
Development Group, an R&D division of ICN. The head of the group was intrigued by ShareNet’s
potential and handed the presentation to Jürgen Klunker, director, Center of Competence, Europe and
Middle East and an engineer in ICN’s Wireline Network Development Group, saying, “Use this, check
it out, tell me what you think.” Klunker was immediately convinced of ShareNet’s potential value and
worth to his organization.
Do
Siemens’s Wireline Network products development was conducted by 3,000 staff at Siemens’s
Munich headquarters, who focused on developing core platforms for switching systems for telephony
and data networks. These platforms were adapted to local market requirements for each customer.
This local customization was carried out at regional development centers (RDCs, staffed by local
9 Red Hat Web site, <www.redhat.com/software/ccm/casestudies/siemens090700.html>, accessed August 6, 2002.
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engineers. In total, about 460 staff worked for the RDCs, with locations in Greece, Brazil, Slovenia,
Belgium, Hungary, Thailand, South Africa, and Portugal.
Adapting ShareNet for the R&D organization was not straightforward. The ShareNet team had
structured much of the knowledge library’s architecture to reflect sales and marketing processes. Chief
among their tasks, therefore, was adapting the library structure to reflect an R&D-appropriate
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knowledge base. Categories now had to capture information about product development processes,
phase of design, or the role of a contributor (for example, tester, developer, or solution integrator).
Klunker asked the department heads of each area to name one individual as a ShareNet coach. These
coaches were brought together to determine the adaptations necessary to make ShareNet useful for
R&D. Klunker recalled some of the early meetings:
We presented our proposal of how the library should be structured. Specifically, when a
person goes to contribute a knowledge object, how does the menu question for his or her input?
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What are the criteria, and which parameters and features should be included? Suggestions were
made in a proposal by a small group and presented to the ShareNet coaches. We made a couple
of changes, then we built a sort of playground where we could test out the results.
The first version of R&D ShareNet was up and running by mid-February 2002, and populating the
knowledge library again became the primary focus. This time around, however, there was little fanfare
or marketing to spread the word. “We wanted to see how it was working and move forward
carefully,” Klunker said. By May, 50 knowledge objects had been contributed. Klunker noted how
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active the coaches had to be to promote usage:
I asked the coaches to motivate their colleagues to use ShareNet, to raise awareness of the
initiative. Of the 460 developers in our main department, 420 subscribed. However, I felt the
usage of ShareNet was not satisfactory, not enough people were actually contributing. So I
asked our coaches to promote ShareNet again. For each group or lab, I asked the coaches to
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select one person who regularly, periodically, even daily, monitored ShareNet, looking for
urgent questions concerning the area of knowledge he or she was responsible for or posing their
own questions on that area. The idea was that if you looked into communication on ShareNet,
the most active life would be in the discussion forums.
Klunker relied on workshops to promote ShareNet. But with market conditions deteriorating,
travel funds for users coming from RDCs in far-flung places had dried up. As he began to organize an
RDC workshop, he received a note from the head of his division asking, “Couldn’t you organize this
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workshop in a way that only one person per RDC has to travel”‘ Klunker recalled his reaction:
No, this will not be a workshop anymore, it will be a management meeting. Because the one
person who comes will have to be a manager, a higher-ranking person, otherwise they cannot
cover everything. On the other hand they won’t be at the working level, and the workshop will
no longer function the way it is supposed to. I was going to skip the whole workshop, but that
was not satisfying. It’s my job to bring ShareNet communication alive, so the idea came to me,
“We’ll use ShareNet for the conference.”
Plans for the virtual workshop were under way by April, and on 24 June the workshop went live.
Do
Presentations were posted with links to knowledge objects and discussion threads. Presentations were
organized by time sequence, just as they would have been at a conference. They were available for a
window of time, about two to three hours. On the first day, Klunker received only seven comments.
But after a general call for more comments that evening, and after Klunker posted a comment or two
of his own, the following day 30 to 40 comments were posted. He noted, “It’s just like when I have to
11
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moderate a real conference. The first paper gets one or two comments, I have to add a comment of my
own, and then things start to flow.”
Klunker acknowledged there were some significant challenges to face before ShareNet’s long-term
adoption in the R&D group was secured:
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The developers are owners of the knowledge, and for the most part, they are not aware that
others might need some part of this knowledge. Our message is: “Please use ShareNet to spread
your knowledge, to give something away.” That’s not so easy in our culture, to give something
away, especially if it seems that you don’t get something back. We have to convince them that
“Yes, you give something away, it’s knowledge, it doesn’t cost you anything.” Just a few
minutes to write an answer to a question. The benefit is that you have given a competent
answer. And when the next question comes you can say, “Look to this answer.” Or, you get
better involved in this play of questions and answers. You are not outside the community, you
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are a part of it. This is your advantage. It’s not an advantage that counts in the next quarter of an
hour, but it will pay off after a certain length of time.
If you look at ShareNet now, the most important thing for us to achieve is getting the
knowledge that is concentrated in the lab in Munich to those who need that knowledge.
Twenty-seven hundred people in Germany need to know what’s happening outside of these
buildings. But there are questions about security, confidentiality, and little incentive for them.
The people in the labs in my group for example they already have their own informal
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information networks established—e-mail lists, distribution lists, and so on. They already
belong to communities of experts. But the engineers located outside of Munich, in the RDCs—
they realize the strengths. They know they depend on knowledge from outside. I don’t have to
convince them to use it.
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The Future of ShareNet

By July 2002, ShareNet had grown to encompass over 19,000 subscribers, with 53 ShareNet
managers located in different countries around the globe and an additional 20 to 30 countries using the
tool but not represented by a manager. Over 20,000 knowledge objects had been deposited in the
system, half of which had been written within the previous 12 months. The total number of ShareNet
shares given out now exceeded 2.5 million, with close to 300 users in reach of an award—although
surprisingly, no one had yet redeemed any shares for prizes.
No
Against this backdrop of success, however, the corporate climate had worsened, with the
telecommunications sector particularly hard hit. After years of hype that every household in the
developed world would sign up for high-bandwidth access, encouraging firms to quickly build out
network infrastructure, the market collapsed, demand dried up overnight, and most telecom firms
were left buried under staggering amounts of debt. Equipment manufacturers such as Nortel and
Lucent collapsed as demand for switches and routers fell by an order of magnitude. Despite slashing
service fees, carriers like Qwest began to sink under a lack of consumer demand. And to add insult to
injury, others like WorldCom were swallowed by scandals arising from accounting irregularities.
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Siemens was not immune to these problems. By the end of 2001, restructuring and layoffs had hit
every group and division. In January 2002, ICN underwent a reorganization, as a result of which
ShareNet was placed into a department called Competence and Knowledge Management, run by the
newly appointed Widuch. The ShareNet team was cut back to Manuth, three consultants, the global
editor, and the equivalent of a few full-time IT resources. As Manuth put it, “We’re operating as lean
as we can.” Döring outlined the implications of these changes for ShareNet:
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In 2000, we were set up to help shift ICN to a “service-based” organization. The context was
one of rapid growth. And ShareNet was a great success story. But now, the criterion for
management has changed. We have to be lean and efficient. There is pressure from the divisions
to make sure that we don’t spend money on nonessential items. Unfortunately, one side effect of
this environment is that we often tend to cut the functions first that we don’t understand. So we
have to make our case to the divisions that knowledge management actually has a good return
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on investment. It’s not just something that’s a “nice to have.”
Unfortunately for the ShareNet team, this was not as easy as it sounded. Serious attempts at
evaluating the worth of knowledge management efforts were rare, given that it was notoriously
difficult to attach a value to the benefits delivered. As a result, knowledge management was a topic
that tended to ebb and flow in popularity along with the general business cycle. Everyone wanted to
do it when times were good, but as Widuch put it, “When times are bad, knowledge management
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becomes a dirty word—it’s the easiest thing to cut. For example, right now we are in the process of
stopping all projects where the return on investment isn’t clear and where the payback is too late.”
Given the mounting pressure to justify expenses across Siemens, the ShareNet team had begun
discussing the option of charging each product division a per-user fee for each person that subscribed
to the tool. This would allow each division to work out whether the return from using ShareNet was
worth the cost of providing it to their sales and marketing staff, in effect increasing the accountability
of ShareNet to the product divisions. This was a desirable goal, given that ShareNet had been a grass-
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roots initiative developed and promoted outside the normal processes and structures that operated
within each division. Widuch elaborated:
ShareNet’s founders went directly to the local country sales and marketing organizations to
help them. But these are the channels for the product divisions, and the division heads in
Munich were not addressed or included in the process. This was probably the right strategy at
the time—it got things done quickly. But now, we have to figure out how to more closely tie
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ShareNet to the divisions. To answer this question requires that we better understand where we
really need ShareNet. Too many people say, “I know you want me to take ShareNet, but do I
need it? Can you demonstrate that my sales guys need it?”
Not everyone on the ShareNet team thought charging the divisions was necessarily a good idea.
Besides the challenge in deciding a price, the strategy entailed several risks. What if one of the
divisions decided it did not want ShareNet? Should the team cut off users from that division? Such a
move would be sure to spark uproar. Furthermore, for every division that decided not to adopt
No
ShareNet, the remaining divisions would need to pay more to ensure the network’s costs were
covered. This would reduce the return from ShareNet, increasing the likelihood that the remaining
divisions would also turn it down. Given these problems, some staff believed that ShareNet should
continue to operate as a corporate-level service. But they would have to persuade the board that the
project warranted continued funding at a time when other corporate-level initiatives were being cut.
Conscious of these concerns, Manuth had attempted to document the impact that ShareNet was
having on ICN’s businesses from an early stage. For the financial year 2000–2001, he had asked local
country managers to provide details of projects where ShareNet had played a “vital” role in winning
Do
or executing on a contract. He also asked managers to document that Siemens had actually received
payment from the customer in each case. Twenty-seven projects met these criteria, ranging in size
from €60,000 to €89 million. In total they represented €120 million in revenues to ICN (see Exhibit 13).
ShareNet was also credited with helping to achieve cost savings of over €500,000. Manuth had also
attempted to prepare forecasts of the profits from ShareNet, based on projections of how much new
knowledge would be contributed in a year and how much this knowledge was worth (see Exhibit 14).
13
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Showing that ShareNet was adding to the bottom line was not all that had to be done to satisfy
potential critics, however. There was also a feeling that the initiative should better reflect Siemens’s
current business challenges. As Widuch explained:
To date, we haven’t linked ShareNet to our competence and knowledge management efforts.
It has been more of an ad hoc initiative that existed without consideration of our other business
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processes. We need to find a way to link ShareNet more explicitly to ICN’s strategy by asking
“What do we need to do, and how can ShareNet help us achieve this?” For example, two years
ago we were focused on selling solutions. Now, however, we have to improve time to market.
Our industry used to endure boom-bust cycles of five to 12 years, but now the cycles are faster,
in the order of two to five years. How can ShareNet help in this new environment?
Döring was confident that these shorter-term challenges would be overcome. His attention was
focused more on the longer-term issues facing ShareNet. He explained:
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We’re just at the beginning of exploring ShareNet’s potential. We’ve started to roll it out
across the R&D department within ICN. But we still have critical questions to answer. For
example, should we try and keep ShareNet as one big club that everyone is a member of, or split
it into many different networks, one for each function or business? We must work out the
answer quickly, because we’re starting to get requests from other Siemens groups—for example,
our automation and drives group—to help them implement similar systems.
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Döring’s long-term vision for ShareNet knew no boundaries. He was constantly thinking of new
ways the initiative might evolve to realize a broader mission—the seamless exchange of knowledge
across Siemens’s far-flung empire in the most effective manner possible. As he explained:
We’re not going to stop with ShareNet in its present form. Just think—we have this system
that is great for transferring knowledge from one employee to another. But sometimes, this
won’t be enough. Talking to the guy in Denmark can get you so far, but to go further, you need
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the guy from Denmark to come over and actually do the job. So why shouldn’t we have a
system that allows us to do that if he is available? That’s the advantage of being a global
company. So we’re designing a system to do this—we call it “PeopleShareNet.”
Tsusaki added: “ShareNet’s power is the result of a transformation process, and this transformation
process, plus everything else that comes along with ShareNet, can be used to optimize whichever
business process we choose to use it for. To me this is the lasting asset from ShareNet; the knowledge
No
itself is a wasting asset as the business and technological environments change.”
Recognition of ShareNet’s potential impact was not just limited to within Siemens. Manuth
explained, “We’ve had requests from our customers, who’ve heard about ShareNet from our sales
staff, to link them to the system.” The ShareNet team had obliged one of its large U.S. clients,
providing access to ShareNet in an effort to assess what kinds of benefits might come from extending
the knowledge management system outside the firm’s organizational boundaries. Finally, given the
recognition ShareNet had received in the corporate world—it had received several awards, including
one from the prestigious American Productivity & Quality Center—discussions had been held with
several outside firms that wanted Siemens to package and sell them the platform.
Do
With limited resources at its disposal, the ShareNet team had some hard decisions to make about
where to focus in the coming year. Manuth, Widuch, and Döring packed away their notes, having
divided up the work to be completed in preparation for the board meeting. Preparing the slides would
be easy. Recommending a strategy for moving forward was a much more difficult task.
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Exhibit 1 Siemens Worldwide Financial Performance (in millions of euros)
[A] Consolidated statement of income (years ended September 30, 1998–2001)
1998 1999 2000 2001
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Net sales 60,177 68,582 77,484 87,000
Cost of sales 43,859 (49,091) (55,949) (63,895)
Gross profit on sales 16,318 19,490 21,535 23,105
Research and development expenses (4,664) (5,236) (5,848) (6,782)
Marketing, selling, and general administrative expenses (10,885) (12,427) (14,173) (16,640)
Other operating income (expense), net 35 (513) (277) (1,476)
Income from investments in other companies, net 242 278 299 49
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Income from financial assets and marketable securities, net 742 924 2,732 173
Interest income (expense) of operations, net (231)a 347a (35) (32)
Other interest income (expense) 199 (20) 180 43
Gains on sales and dispositions of significant business interest 7,826 4,238
Income (loss) before income taxes 1,758 2,870 12,239 2,678
Income taxes (399) (1,005) (3,017) (781)
Income before extraordinary items 1,359
Extraordinary items after taxes (890)
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Minority interest (362) 191
Net income (loss) 469 1,865 8,860 2,088
Source: Siemens Annual Reports, 1999–2001.

aIncludes interest income from pension funds.
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[B] Siemens External Sales by Segment (year ended September 30, 2001)
Siemens Segment 2001
Information and Communication Networks (ICN) 12,189

Information and Communication Mobile (ICM) 11,151
No
Siemens Business Services (SBS) 4,261

Automation and Drives (A&D) 7,843
Industrial Solutions and Services (I&S) 3,398
Siemens Dematic (SD) 2,381
Siemens Building Technologies 5,094
Power Generation (PG) 8,487
Power Transmission and Distribution (PTD) 3,818
Transportation Systems (TS) 4,000
Siemens VDO Automotive (SV) 5,694
Medical Solutions (Med) 7,199
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Osram 4,200
Corporate, eliminations 1,945
TOTAL 81,660
Source: Siemens Annual Report, 2001.
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Exhibit 2 2002 ICN Organizational Chart
Information and Communication Networks Group (ICN)
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Divisions: Common Functions:
Access Solutions Enterprise Networks Wireline Network Group Strategy Other Common
Communication Joe Doering (Pres) Functions
Accounting + Control
Meta Directory Information Technology
Optical Networks
Services Audit
Competence & Personnel
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Knowledge Management
Marc Widuch (VP)
Etc.
Sales:
Sales Deutsche ShareNet

Sales Germany Carrier Sales
Telekom Andreas Manuth
(Manager)
Regional Companies; Group Specific Companies

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Source: Siemens ICN.
Exhibit 3 Solution-Selling Process and Examples of Questions

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Knowledge Sharing along the Process

Who can provide more What are the key highlights What are potential pricing options
information about this of this Technical Solution and commercial terms for this
Technical Solution or Service? and Service? Functional Solution Component?
No
Which Projects
have we carried Business Pre- Bid preparation
out in this Market? ....
Development acquisition Solution creation
What drives this Customer's How did you develop

How did you approach and
decision making process? contracts for this Project?
develop business with the
Customer(s) of this Project?
What are important cultural
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issues to be aware of when

Technical Solution Market dealing with this Customer?
Functional Solution Project Customer
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Exhibit 4 ShareNet Screen Shot: Example of Questions to Codify Knowledge
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No
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Exhibit 5 ShareNet Screen Shot: Example of a Knowledge Object
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op
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No
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Exhibit 6 ShareNet Screen Shot: Example of an Urgent Request
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op
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No
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Exhibit 7 Sample Awards Earned with ShareNet Shares
Textbooks
400 Shares You need some special book for your job or for
your personal knowledge creation? Just mail us
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the author, title and ISBN number of the book
you are looking for (maximum price € 150) and
we will order the book to your address.
Available until 30 Sep 2002
Siemens SL45
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900 Shares Do you need more than a mobile to contact your
knowledge exchange partner? Here is something
special for you: The Siemens SL45 is delivered
with a 32 Megabyte MultiMediaCard. That means
saving up to 45 minutes of your favourite music,
five hours of voice memos, the address of
everyone you ever met (with up to 14 sub-
entries), and much more. Just plug and play, or
organize, or up and download and share your
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knowledge - it's that easy!
Trip to a knowledge exchange partner
1500 You are in regular knowledge exchange with

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Shares another member of ShareNet somewhere else in

the world? We offer you the opportunity to visit
your peer. You arrange the trip, we will pay for
it. The only restrictions are to stick to the
Siemens travel agreement (Siemens contract
hotel, economy flight) and to keep the price of
the trip below € 2,500. (We also expect a
short report of your experience.)
No
Training
1500 You want to take some special training courses

Shares to increase your personal knowledge base, e.g.
a special technical training or a language class?
We will pay for a training including trip and
accomodation up to € 2,500. You can choose
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any course from the international SQT

programme. Alternatively select external
courses after a consultation with the ShareNet
team.
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Exhibit 8 ShareNet Knowledge-Object Statistics (May 2001–May 2002)
A. Objects Published by Month (total objects: 9,758)
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2500
2000
1500
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1000
500
0
May- Jun- Jul-01 Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May-
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01 01 01 01 01 01 01 02 02 02 02 02
B. Objects Published by Category (total objects: 9,758)

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Competitor
Partner
Contact
Other*
No
Customer
Functional Solution
Market Component
Project
Uploaded Document
Technology/Tool Technology
Solution/Service
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*Other includes the following categories: Customer Project; Feature and Requirement; New Vitac Case; Process; Method
Tool and Rule; Product Development; Success Story; Test Tool and Test Equipment, all with less than 20 contributions
over the year.
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Exhibit 9 Published Objects List by Country (FY 2000–2001)
Country/Groupa Objects Contributors Country/Group Objects Contributors
Germany 2,040 370 Finland 38 9
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India 1,009 79 UAE 33 7
Indonesia 836 44 Czech Republic 31 13
Netherlands 712 25 Norway 30 6
Turkey 680 19 Ireland 25 7
Malaysia 629 28 Greece 24 4
Brazil 497 110 Poland 24 11
Thailand 494 28 Chile 21 5
Belgium 458 76 Ukraine 14 7
Philippines 437 20 Denmark 12 12
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China 400 24 Estonia 12 2
Portugal 354 34 Vietnam 11 6
Singapore 304 33 Ecuador 7 1
Hungary 200 27 Peru 7 4
France 198 7 Saudi Arabia 7 2
Egypt 194 11 Croatia 5 1
Hong Kong 164 8 Latvia 5 3
Australia-New Zealand 153 24 Sweden 5 3
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Colombia 153 24 Worldwide 5 2
Russian Federation 137 13 Lithuania 3 2
Switzerland 137 17 Israel 2 2
Spain 129 48 Slovak Republic 1 1
Argentina 124 20
United Kingdom 81 16 TOTAL 11,517 1,314
Italy 79 20
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Venezuela 76 9
Mexico 75 6
South Africa 71 21
Romania 70 6
United States 69 21
Austria 53 13
Canada 48 6
Jordan 47 4
No
Taiwan 46 3
Iran 45 13
Pakistan 45 13
aWithin a country, several groups may contribute separately; these groups have been aggregated.
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Exhibit 10 ShareNet Shares-Awarded Statistics (worldwide, May 2001–May 2002)
A. Shares Earned by Month (total shares: 363,696)
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2500
2000
1500
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1000
500
0
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May-01 Jun-01 Jul-01 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 Jan-02 Feb-02 Mar-02 Apr-02 May-02

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B. Shares Earned by Contribution Type (total shares: 363,696)
Urgent Request Discussion Forum

No
Response Response
Urgent Request
Feedback Received Object Feedback Given
Specials
Object Published Object Feedback

Received
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Exhibit 11 ShareNet shares Earned by Country (FY 2000–2001)
Countrya Shares Contributors Country/Group Shares Contributors
Germany 75,326 1,139 Czech Republic 1,020 30
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India 42,002 179 Ireland 1,004 21
Indonesia 31,839 115 Vietnam 775 33
Belgium 23,119 179 Saudi Arabia 666 14
Brazil 20,696 290 Pakistan 617 14
Thailand 20,545 67 Greece 403 21
Netherlands 16,125 60 Worldwide 384 10
Singapore 11,342 55 Estonia 376 3
Philippines 11,074 39 Denmark 370 26
Portugal 10,979 114 Ukraine 318 11
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Malaysia 10,649 54 Latvia 276 9
China 10,443 93 Lithuania 245 3
Turkey 7,364 38 Croatia 187 10
United States 7,263 154 Sweden 173 13
Hong Kong 6,492 11 Israel 121 4
Argentina 6,372 57 Ecuador 98 4
Russian Federation 5,727 29 Tunisia 55 3
Australia-New Zealand 5,657 63 Peru 47 5
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Egypt 5,495 21 Slovak Republic 42 6
France 5,226 27 Slovenia 38 10
Hungary 5,093 54 Unisphere 28 3
Switzerland 4,880 63 Luxembourg 10 2
Romania 4,826 14
Spain 4,392 76 TOTAL 396,649 3,796
United Kingdom 3,783 79
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South Africa 3,765 81

Colombia 3,414 53
Iran 2,704 4
Mexico 2,351 18
Finland 2,334 28
Italy 2,232 87
Jordan 2,172 8
UAE 1,911 23
No
Taiwan 1,851 15
Canada 1,662 16
United States Enterprise 1,646 51
Venezuela 1,559 15
Norway 1,474 21
Poland 1,403 58
Austria 1,381 41
Chile 1,369 8

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aWithin a country, several groups may contribute separately; these groups have been aggregated.
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Exhibit 12 Urgent-Request Statistics (July 2001–June 2002)
A. Urgent Requests Answered
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450
400
350
300
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250
200
150
100
Jul-01 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02
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B. Average Minutes until First Answer

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1300
1200
1100
No
1000
900
800
700
600
500
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400
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Exhibit 12 (continued)
C. Average Minutes until Best Feedback
18000
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16000
14000
12000
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10000
8000
6000
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D. Average Number of Total Answers
4.8
4.6
No
4.4
4.2
3.8
3.6
3.4
3.2
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3
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Exhibit 13 Countries that Won Projects with the Help of ShareNet
Belgium [1]
Brazil [1]
China [1]
Colombia [2]
rP
Ecuador [1]
Hungary [1]
India [2]
Italy [1]
Jordan [1]
Mexico [1]
Netherlands [1]
yo
Poland [1]
Portugal [4]
Romania [2]
Russia [1]
South Africa [1]
Thailand [2]
Turkey [2]
United Kingdom [1]
op
Note: Number of projects in each country is indicated in brackets.

tC
Exhibit 14 Example of ShareNet Projected Revenue Calculation
1999/2000 Plan
Average number of active contributors 300

Number of knowledge objects per contributor—assumption 15
Number of knowledge objects in system 4,500
No
Percentage of reused knowledge objects—assumption 10%

Number of reused knowledge objects 450
Cost saving per reused object—assumption €3000
Total projected cost savings €1,350,000
Percentage of reused objects resulting in new projects—assumption 10%

Projected number of new customer projects 45
Revenue per new project—assumption €2,500,000
Additional revenue €112,500,000
Do
Additional profit (5% of revenue) €5,625,000
Note: Adapted; original deutsche marks converted to euros.
27

Siemens ShareNet - Building A Knowledge Network

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t

Siemens AG: A Short History

Siemens ShareNet: Early Beginnings2

— Donald Tsusaki, head, IT Knowledge Platforms

1 Summer 2002 exchange rate: $1=€1.03.

The Core Idea: A Global Knowledge Network

approach to globally networked flows of knowledge.”

3 Siemens Annual Report, 1999.

4 This became the Group Strategy team in November 2001.

Most knowledge management systems focus on “codified” knowledge, knowledge which

didn’t want it to be brochureware. We knew we needed to capture some of the “tacit”

ShareNet Takes Shape

Boot-strapping the Network

We also nominated handpicked local company representatives called “ShareNet managers”

In the beginning it was rather philosophical, so we were missionaries. We published articles

over many years with Siemens). Hirschler commented:

Expanding the Reach of ShareNet

9 Red Hat Web site, <www.redhat.com/software/ccm/casestudies/siemens090700.html>, accessed August 6, 2002.

The Future of ShareNet

itself is a wasting asset as the business and technological environments change.”

[A] Consolidated statement of income (years ended September 30, 1998–2001)

1998 1999 2000 2001

Income from investments in other companies, net 242 278 299 49

Source: Siemens Annual Reports, 1999–2001.

Siemens Segment 2001

Information and Communication Networks (ICN) 12,189

Siemens Business Services (SBS) 4,261

Source: Siemens Annual Report, 2001.

Information and Communication Networks Group (ICN)

Sales Deutsche ShareNet

Regional Companies; Group Specific Companies

Exhibit 3 Solution-Selling Process and Examples of Questions

Knowledge Sharing along the Process

What drives this Customer's How did you develop

issues to be aware of when

Functional Solution Project Customer

Source: Siemens ICN.

Source: Siemens ICN.

Source: Siemens ICN.

Source: Siemens ICN.

Available until 30 Sep 2002

Available until 30 Sep 2002

Trip to a knowledge exchange partner

1500 You are in regular knowledge exchange with

Shares another member of ShareNet somewhere else in

Available until 30 Sep 2002

1500 You want to take some special training courses

any course from the international SQT

Source: Siemens ICN.

A. Objects Published by Month (total objects: 9,758)

Source: Siemens ICN.

B. Objects Published by Category (total objects: 9,758)

Source: Siemens ICN.

Country/Groupa Objects Contributors Country/Group Objects Contributors

Germany 2,040 370 Finland 38 9

Source: Siemens ICN.

A. Shares Earned by Month (total shares: 363,696)

Source: Siemens ICN.

B. Shares Earned by Contribution Type (total shares: 363,696)

Urgent Request Discussion Forum

Object Published Object Feedback

Source: Siemens ICN.

Countrya Shares Contributors Country/Group Shares Contributors