TietoEnator Oyj - Company Announcement

TietoEnator's strategy - creating the winning professional service company

TietoEnator Corporation Stock Exchange Release 18 July 2008, 8.00 am
EET

TietoEnator has carried out a thorough strategy process during the
spring, and the company's Board of Directors has now approved the new
strategy which repositions the company with an increased focus on
growth and efficiency.

TietoEnator aims to be the leading IT service company in Northern
Europe, with a significant presence in Russia. The company's
competitive advantage will be based on customer-focused operations
that are supported by a new way of working, efficient global delivery
of services and a unique combination of capabilities in IT, R&D and
digital services.

TietoEnator will continue to make significant investments in people
development to strengthen its competitiveness and to support its
transformation. By executing the new strategy, the company aims to
deliver an EBIT level of over 10%.

Need for change
The IT industry has changed and competition has intensified during
the past several years. Today, the IT industry is being shaped by
rapid globalization and industrialization of services as well as
emerging new delivery models such as Software as a Service (SaaS) and
Business Process Outsourcing (BPO). Consumer-driven technological
innovations have an important role for all industries and customers.
At the same time, the reliability of basic IT is more critical than
ever for all customers.

TietoEnator's past strategic choices have not addressed the changes
in the industry and the competitive landscape fast enough.
Furthermore, the company has not been able to utilize its
competencies and assets in an optimal way, partly due its fragmented
structure. All this has led to the weakened financial performance of
the company in the recent years.

In October 2007, TietoEnator's Board of Directors reviewed the
strategy with the aim of improving the company's position in the
industry and enhancing profitability. The process has continued since
then, and the Board has now approved the new strategy for 2009-2011.

Sharper business focus - leading IT service company in Northern
Europe by 2011
TietoEnator is a professional service company providing IT, R&D and
consulting services. The company focuses on large- and medium-sized
organizations in its main markets - Nordic countries, Germany and
Russia. In telecom, forest, oil and gas as well as digital services,
the company will, however, serve customers globally. In addition,
TietoEnator will have industry-specific activities in selected
countries.

In the telecom industry, TietoEnator is striving for a position as
the world-leading telecom R&D partner, and a recognized expert in the
telecom value chain, seeking substantial growth with net sales
increasing from current EUR 650 million to close to EUR 1 billion.

The company has a special growth initiatives planned for Sweden and
Russia. In Sweden, organic growth is targeted to exceed EUR 100
million by leveraging the current and new offerings and seeking
growth actively from new market segments. In Russia, TietoEnator aims
at annual sales in excess of EUR 100 million by serving its European
key customers as well as expanding to new Russian customers operating
in TietoEnator's areas of expertise. To enhance its services to
customers in Russia, TietoEnator will open a data-centre in St
Petersburg by the end of 2008 and introduce a new managed service
concept, based on co-operation with world leading technology
partners.

Today, investment decisions are largely made by individual business
areas. TietoEnator will reallocate investments to ensure that they
are aligned with the new strategy and support growth in telecom,
Sweden and Russia as well as other selected areas. The company will
continue to develop a more focused portfolio of solutions to support
its service business.

TietoEnator's Nordic expertise especially in telecom and digital
self-services sets the company apart from the competitors. By
utilizing its experience, competencies and market position
TietoEnator aims to become a leading advisor of digital
transformation in its key markets.

Customer centricity as the main source of competitive advantage
TietoEnator differentiates itself from its competitors through
superior customer centricity resulting from a deep understanding of
its customers' businesses and needs. The company will further
strengthen its sales and customer service organization by combining
country- and industry-level resources.

Horizontal integration to ensure growth and efficiency
TietoEnator is transforming into a horizontally integrated company
with fewer organizational units and stronger company-wide competence
centres, e.g. testing, Enterprise Resource Planning (ERP), business
intelligence and Applications Services Management (ASM). In 2009, the
company will invest in the development of the global delivery model,
which will bring cost-efficiencies offsetting overall wage inflation
in TietoEnator. The ramp-up of global delivery capacity will be
accelerated, especially in India and China.

From the beginning of 2009, the company will have a new structure
with a stronger focus on countries. This new organization will drive
higher growth and profitability as well as customer value and
quality. The organization, including key positions, will be defined
during the autumn.

Substantial investments in people and competence development
To support the on-going change, TietoEnator is creating and executing
competence transformation plans to ensure the move to more high-value
competence profiles, such as systems architects, consultants, project
managers and technical experts. Today, approximately 3% of working
hours are used for competence development, and these investments will
be increased going forward.

Three-year execution plan targeting over 10% EBIT
Implementation of the strategy and change will be orchestrated
through a transformation programme spreading over a three-year
period. In 2009, the focus will be on the implementation of the new
organization and the development of the global delivery model.
Delivery quality is high on the management agenda.

By executing this strategy, TietoEnator is targeting an EBIT level of
over 10%, which is in line with the long-term financial targets set
in July 2007.

Main drivers for profitability improvement
Completing the Performance Improvement Programme that was initiated
in January 2008 lays the foundation for continuous profitability
improvement. The programme aims at EUR 130 million annualized savings
from the end of 2009. The programme is progressing well, and by the
end of June 2008, the company had achieved annualized cost savings of
EUR 71 million.

Through this programme TietoEnator is

  * improving utilization by reducing administrative costs through
    moving resources from unbillable work to billable tasks,
  * discontinuing or divesting underperforming or unsustainable
    operations and projects,
  * accelerating global sourcing,
  * increasing the focus on the quality of services, and
  * aiming for better purchasing conditions.


The new strategy will complement the Performance Improvement
Programme and drive improved profitability through

  * a new operating model and a more integrated structure will
    improve the use of resources across industries, countries and
    global competence centres,
  * a global delivery model that focuses on the efficiency and
    quality of deliveries and better utilization of global
    competencies,
  * major investments in offering and competence development that
    will result in more productized services and more added value to
    customers and the company."The Performance Improvement Programme creates a solid foundation for
our new strategy. With the new structure, investments in people, and
the implementation of the global delivery model we can restore
TietoEnator's position as a high performing company. Sustainable
business practices and competent people ensure the success of
TietoEnator," says Hannu Syrjälä, President and CEO.


For further information, please contact:
Hannu Syrjälä, President and CEO, tel. +358 2072 68729
Åke Plyhm, Deputy CEO, tel. +46 10 481 3321, +46 705 65 86 31,
ake.plyhm@tietoenator.com
Reeta Kaukiainen, Executive Vice President, Communications and
Investor Relations,
tel. +358 2072 68711, +358 50 522 0924


TIETOENATOR CORPORATION

DISTRIBUTION
Helsinki Stock Exchange
Stockholmsbörsen
Principal Media


TietoEnator is among the leading architects in building a more
efficient information society and one of the largest IT services
providers in Europe. TietoEnator specializes in consulting,
developing and hosting its customers' business operations in the
digital economy. The Group's services are based on a combination of
deep industry-specific expertise and the latest information
technology. TietoEnator has about 16 000 experts in close to 30
countries.
www.tietoenator.com