Customers and Partners Co-Creation

Management Guidelines for Major Topics

Customers and Partners Co-Creation

Name of material topic	Importance of this material topic to Advantech
Importance of this material topic to Advantech
Customers and Partners Co-Creation	As a global leader in the IoT industry, Advantech is dedicated to providing exceptional products and services. Customer satisfaction has a direct impact on Advantech's brand value, longterm market competitiveness, and customer loyalty. It also impacts the interests of key stakeholders, including employees, customers, shareholders, and partners. Consequently, maintaining strong customer relationships is essential to enhancing corporate competitiveness. In addition, cultivating high-quality partnerships contributes to advancing the overall innovation and creativity of the IoT industry.
Management strategy
Management strategy	We view customers as partners and engage in market development through a co-creation mechanism. Improve channel distribution management, optimize the Global Customer Relationship Management (CRM) System, Technical Service Platform, and provide more diverse online training courses. Ensure comprehensive protection of customer privacy and safeguard customer rights and interests, even during the pandemic. We focus on the development of the IoT industry and continue to invest in IoT platforms and solutions. Improve customer feedback mechanism: Strengthen response speed through customer satisfaction surveys, AI analysis, and internal communication. Mitigate customer dissatisfaction risks: Make timely adjustments to products and services based on the data collected. Improve service quality: Enhance the technical support team to provide customized solutions. Reinforce internal performance mechanisms: Evaluate the possibility of organizing RBU customer satisfaction evaluations in the future to raise internal service awareness.
Policy or commitment
Policy or commitment	Advantech is committed to maintaining high customer service standards and continues to monitor customer satisfaction indicators to enhance the customer experience and ensure corporate sustainable operations. Position customers as partners and collaborate with them through co-creation mechanisms to jointly develop the market. Improve channel distribution management, optimize the Global Customer Relationship Management (CRM) System, Technical Service Platform, and provide more diverse online training courses. Ensure the complete protection of customer privacy. We focus on the development of the IoT industry and continue to invest in IoT platforms and solutions.
Positive impact
Positive impact	In terms of positive impact, Advantech leverages to apply its core business strengths, guided by ecosystem partnerships and a spirit of co-creation, to promote an intelligent and sustainable planet. In terms of society, IoT is applied to telemedicine and healthcare to reduce medical costs and improve medical precision. In terms of the economy, improvements in the efficiency and performance of production, along with the application of AI technology, significantly elevate industrial productivity. In terms of the environment, equipment monitoring and the deployment of a large number of sensor will effectively reduce energy consumption and environmental pollution. In recent years, due to the development of alternative energy, Advantech has also ventured into the business of charging piles and alternative energy. Through close collaboration with customers and ecosystem partners to achieve sustainability in various fields.
Negative impact
Negative impact	The potential negative impact of this issue is the risk of intangible damage to Advantech’s brand image and corporate reputation. Low customer satisfaction may increase the risk of market share loss, which could in turn affect the company’s revenue performance. Low customer satisfaction may also lead to customer complaints and legal disputes. Advantech addresses negative impacts by implementing action plans derived from customer satisfaction surveys, analyzing feedback to understand issues, and requiring relevant personnel to take corrective measures. Additionally, the Company promotes proactive prevention and care mechanisms and fosters healthy competition for customer satisfaction across different regions.
2024 goal achievement progress
2024 goal achievement progress	Distributor management: 【2022】2022 unset goals/2022 achievements progress are as follows 1. The percentage of newly signed distributor partners reached 15%. The percentage of premium distribution partners reached 18%. 2. Customized product education and training lists were designed according to different distributor partner types and piloted in emerging countries, successfully inviting nearly 40 distributor partners to participate in the online training program. 【2023】Goals achieved 1. The percentage of premium distribution partners reached 21%. 2. In 2023, a total of 13 distribution partners in emerging countries completed the course and passed the evaluation. The localization courses in Korea have been launched online, the basic courses in Japan have been completed, and the advanced courses have been introduced in stages. 3. Held over four Advantech global partner conferences, attracting more than 6,500 Advantech customers and partners from 60 countries. 【2024】certain goals were achieved 1. In 2024, the overall revenue of global distributors declined by 9.6% compared to the same period last year. Although CSF's overall revenue performance fell short of expectations, it still slightly outperformed Advantech’s overall market performance for 2024, which recorded a gross revenue (GR) decline of 9.9%. The inability to achieve the originally targeted 14% GR growth was also influenced by broader market conditions. 2. The percentage of premium distribution partners and sector-focused distribution partners accounted for 46%. 3. A total of 12 Sector-Focused Partner Conferences / Advantech ADF events were held globally, engaging nearly 3,000 sector-focused partners. Customer satisfaction survey: 【2022】Unset goals The customer satisfaction survey targeted customers representing the top 80% of cumulative sales in each region, with a total of 748 customers surveyed, 325 in Taiwan, 102 in Mainland China, 134 in North America, and 187 in Europe. The survey achieved a coverage rate of 60.76%, a response rate of 32.89%, and an average customer satisfaction score of 92.66 points. 【2023】Goals achieved Revenue from sampled customers accounted for 76.73% of total revenue, and the customer satisfaction score was 93.16 points 【2024】Goals achieved Revenue from sampled customers accounted for 81.37% of total revenue, and the customer satisfaction score was 93.15 points Customer connection experience: 【2022】Goals achieved 1. Held 76 Advantech Connect global forums, uploaded 299 Video-on-Demand (VOD) videos, which were viewed 72,771 times and shared 1,899 times. 2. Advantech utilizes eStore and IoTMart to meet the purchasing needs of direct sales customers, with emphasis on optimizing the customer shopping experience and minimizing manual steps 【2023】Goals achieved A total of 68,748 customer feedbacks were collected from the official website and customer portal satisfaction, with an average satisfaction score of 4.03 points, and approximately 99% of the feedback had a satisfaction score of three or higher. 【2024】Goals achieved 1. A total of 63,532 customer feedbacks were collected from the official website and customer portal satisfaction, with an average satisfaction score of 4.057 points, and approximately 99% of the feedback had a satisfaction score of three or higher. 2. The number of views for the 2024 A-Connect replay reached 19,324. Digital service upgrade: 【2022】Unset goals 1. The Customer Relationship Management (CRM) system is progressively shifting to the cloud, Salesforce Sales Cloud was initial implemented in Taiwan and the AInterCon regions in 2022. 2. Introduced the CRM Salesforce CPQ quotation function in the European region, realizing the consolidation of CRM and quotation functionalities, decreasing the number of business operation platforms, and improving the real-time synchronization of customer data. 【2023】Goals achieved 1. Introduced the cloud customer relationship management system to the Japan branch and the Korea branch 2. The marketing automation system has transitioned from a locally developed system platform to a cloud-based application 3. Achieved: Japan, Korea, and Brazil branches implemented the Salesforce Sale Cloud in 2023 4. Achievement: Introduced the Project Registration Module Version 2.0 to the European market in 2023, enabling real-time synchronization of complete CRM data and further breaking down data silos 5. Improved the Salesforce platform information and cyber security risk score by nearly 20% to effectively prevent phishing, credential stuffing, and account infringement attacks 【2024】Goals achieved 1. Integrated the CRM systems of the headquarters and the North American branch to improve business efficiency and facilitate management consistency. Achievement progress: The merger project was completed in May 2024, resulting in significant improvements to business efficiency and management consistency, optimized internal work processes, and mitigated operational risks. The digital upgrade project not only enhances data security and customer data protection but also demonstrates our commitment to corporate governance transparency. 2. Advantech will launch the Salesforce PRM operation program with specific partners in Europe, providing a new customer experience that includes electronic customer contract signing via DocuSign, product and marketing information retrieval, project registration and rebate mechanism. The program aims to cultivate potential business opportunities, improve communication efficiency with key partners by replacing email, and enrich downstream customer data within the CRM through the rebate mechanism. Achievement progress: Achieved. In 2024, the partnership management operating system program was launched with specific partners in Europe (roughly 20 distributors), using the Salesforce PRM platform to offer a new customer experience, including electronic customer contract signing via DocuSign and product and marketing information retrieval. Furthermore, the project registration and rebate mechanism will also be completed in 2025 and will be progressively made available to our distributor partners. We expect improved communication efficiency, increased information transparency and real-time availability, and enhanced collaboration on contracts, projects, and orders through the shared platform. 3. The Mexico branch introduced the Salesforce Sales Cloud to enhance customer information and cyber security and privacy protection. Achievement progress: The Mexico branch completed its relocation in October 2024 and has fully implemented multi-factor authentication, ensuring strict identity verification for all users accessing customer data. This further strengthens data security and demonstrates Advantech’s commitment to data protection as part of its ESG strategy
2025 Goals
2025 Goals	Distributor management： The total number of "premium distribution partners" and "sector-focused distribution partners" is expected to account for over 50% of the overall number, with a revenue growth rate of over 10% in 2025. Expand the online training and certification program, aiming to reach a cumulative total of over 100 distribution partners globally, with more than 500 individuals completing exclusive training and certification courses. Digital service upgrade： Using the Salesforce platform as the central hub, Advantech strives to promote its cloud-based CRM system by relocating branches in the ASEAN region and Australia to the new system to achieve over 85% coverage across overseas branches. This strategy will not only help realize standardization and transparency in data management, and enhance data security and decision-making efficiency, but will also facilitate corporate governance best practices. Implement Salesforce PRM in Europe and provide 70% of our partners with a brand-new customer experience, including customer electronic contract DocuSign signing, product and marketing information search, and the project registration and rebate mechanism. Customer satisfaction survey： The revenue of the sampled customers accounts for over 85% of the total revenue. Achieve an average score of at least 92 points for customer satisfaction surveys. Established a mechanism for collecting customer satisfaction and conducting visits for VIP (KA) customers (3 customers).
2030 Goals
2030 Goals	Distributor management： The overall revenue from global distribution channels is expected to continue expanding, with a target of surpassing USD 650 million and achieving a CAGR of over 10%. Efforts will focus on developing industry-specific and regional distribution partners, particularly premium distribution partners, who collectively contribute more than 50% of total revenue and volume. Digital service upgrade： Integrate supply chain management as part of Salesforce and consolidate key processes such as front-line operations and inventory management. This will materialize real-time digitalization and transparency in order processing, inventory monitoring, and logistics management, which is expected to improve operational efficiency while lowering resource waste and carbon emissions, thereby achieving the goals of environmental protection and corporate governance. Implement a 360-degree customer view within the CRM by integrating data from multiple systems and contact points, enabling the sales team to gain comprehensive insights into customer needs and deliver more precise, personalized services. This measure will not only help improve customer satisfaction but also provide strong support for Advantech at the corporate governance level in terms of data transparency and decision-making optimization. Customer satisfaction survey： Revenue from sampled customers accounts for at least 85% of total revenue, and the customer satisfaction score achieves an average of more than 93 points. Develop a global customer satisfaction benchmarking mechanism to ensure long-term competitiveness. Reinforce our ESG commitments to ensure transparency and sustainable customer service.
2024 Key action plans or programs
2024 Key action plans or programs	Digital service upgrade： The project to integrate the overall Salesforce environments of Advantech headquarters and the North American branch is expected to complete the system merger by May 2024. This integration involves technical evaluations, data migration, system configuration, and user training. Upon completion, it will enhance cross-regional business collaboration, enable data sharing, and standardize business processes. Provided European partners with a one-stop product and marketing information search platform, as well as developed project registration and rebate mechanisms to offer partners a more convenient and efficient collaboration experience, thereby enhancing customer satisfaction and sales effectiveness. Customer satisfaction survey： Utilized EDM pages via the Mailbee system to implement improvements in real time based on data analysis. Optimized supply chain management to ensure on-time product delivery. Strengthened the customer care mechanism by establishing VIP (KA) exclusive services.
Effectiveness assessment
Effectiveness assessment	Digital service upgrade： Partnered with Salesforce to become a B2B industry success case featured on the Salesforce global website, showcasing the business value and cloud-based innovations enabled by the Salesforce platform. This highlights Advantech's achievements in digital transformation and innovation, while also allowing customers, partners, and distribution channels to gain more insight into the Company’s sustainable practices in environmental protection, social responsibility, and corporate governance. A regular progress review mechanism has been created, including internal weekly meetings to monitor the progress of implementation and quarterly business reviews, ensuring its consistency with the Company's strategic transformation goals. Customer satisfaction survey： Evaluate customer satisfaction improvement based on the annual customer satisfaction scores. Establish a regular internal audit mechanism to ensure that service standards are upheld. In the future, consider engaging an external institution to conduct an independent review of the effectiveness of customer satisfaction management. The results of the customer satisfaction survey and records of improvement actions are reviewed annually according to the "Q-005 Management Responsibility Communication and Review Procedure." A regular internal audit mechanism (conducted once a year) is in place to ensure the implementation of service standards and to support external disclosures.
Stakeholders impacted by the material topic and actions implemented by Advantech
Stakeholders impacted by the material topic and actions implemented by Advantech	Advantech will continue to collect, monitor, and respond to suggestions from key stakeholders, customers, and partners through existing communication channels; no corrective measures have been taken because the topic has not yet caused a significant negative impact on stakeholders or the environment, economy, and society

Trends, Strategy Sharing, and Co-Creation

Advantech‘s 2024 customer management and partner co-creation activities are based on the principles of “altruistic cooperation and mutual benefit” and “digital service upgrade.” The Company is committed to deepening customer connection experience, expanding ecosystem partner operations, and institutionalizing distribution authorization management. At the same time, we will optimize digital platforms such as customer relationship management systems and online technical services to improve operational and service efficiency.

Advantech's 2024 Customer management and partner co-creation highlights

Ecosystem Partner Management

The Internet of Things is a market where multiple industries are integrated. Advantech upholds the concept of co-creation and co-prosperity with partners to create industry ecological partners with the IoT platform and core products, enabling small and medium-sized system integrators, traditional automation system integrators, and cloud platform system service providers and enter the IoT industry through this platform, where ecological partners and Advantech work together to expand the market

Partner Co-Creation

Advantech will also make direct investments and participate in external regional funds to explore emerging business opportunities. Through strategic agreements and investments, the Company supports startups in Taiwan, China, Europe, the United States, and other regions, enabling collaboration in areas such as products, market networks, and technology. These efforts aim to foster the development of local IoT ecosystems worldwide. Overview of investments in ecosystem funds: Regional fund (Aquila Capital), with a fund size of RMB 200 million. In 2024, investment projects included maglev technology for energy conservation and environmental protection, the intelligent equipment industry, and a company offering visual solutions using AI to reduce manufacturing costs. Direct investment projects include an RMB 20 million investment in the incubated startup Adveco, which specializes in solutions for smart spaces, smart buildings, and the energy-saving industry. Additionally, to support Advantech’s transition toward RE100, an investment was made in the construction of a 9.8 MW aquavoltaics facility by Yan Xu Green Electricity Co., Ltd.

The list of Advantech's support plan for AIoT startups in 2024

Advantech collaborated with experienced fund partners in the IoT industry to accelerate the growth of international ecosystems. Through dedicated funds, we invested in startups and connected our fund partners with Advantech’s industry expertise, technical platforms, and market networks, thereby accelerating the development of IoT ecosystems in key regions. Besides capital cooperation, for early-stage startups with products and market performance that are not yet scaled, Advantech strategically connects with incubators and accelerators to provide enterprise technical platforms, industry connections, and co-creation funding to expedite the development of growing startups.

Sponsorships for incubators, accelerators, and IoT innovation events
Sponsored organization	Areas of support	Sponsorship benefits
Asia America Multi-Technology Association (AAMA)	Smart manufacturing, smart healthcare, smart environmental protection, smart logistics	In partnership with Chunghwa Telecom, 11 startups were recruited through industry-specific proposals and counseling, with co-creation solutions actively explored in collaboration with five of them.
Garage+	IIoT and Industrial AI Applications	The Company supported Epoch School in conducting entrepreneurship training for university students. The program recruited 100 university students, organized 28 training events, and facilitated 110 one-on-one career consultations.
Pan WenYuan IoT Innovation Application Award	IIoT	Eight startups/school teams with IoT application projects were recruited. Among them, innovative teams focused on agricultural IoT applications were granted cash prizes and hands-on counseling from industry experts to support the industrial application of their technologies.
IMV ESG Technology Innovation Proposal Competition	Energy conservation, agriculture, forestry, fish, animal husbandry	Allied with seven industry partners to support sustainable startups and teams in Taiwan. A total of 114 teams were recruited, and 18 teams were awarded the prize.

Featured Case Study

Customer Satisfaction Survey

In the 2024 customer satisfaction survey, Advantech sampled customers with sales orders from various regions across five dimensions (TQRDC: Technology, Quality, Responsiveness, Delivery, Cost), including 3,459 in Mainland China, 4,887 in North America, 3,097 in Europe, 4,327 in Taiwan, and new regions (1,544 in Korea and 541 in Japan), totaling 17,855 customers.

Using the PDCA tool to analyze this year’s survey, the average scores across all five dimensions in each region exceeded 4.0 points. Advantech will continue to optimize the customer satisfaction management mechanism and provide outstanding products and services to maintain its long-term market leadership.

Customer satisfaction survey score and coverage 2019-2024

Year	Satisfaction (score)	Revenue from sampled customers as a percentage of total revenue (%)
2019	94.59	16.80
2020	95.16	16.98
2021	94.83	17.45
2022	92.66	60.76
2023	93.16	76.73
2024	93.15	81.37

2024 Customer satisfaction survey scores

	Average score (out of 5 points)	Satisfaction (%)
Sales service and pricing	4.60	91.95
Delivery efficiency	4.57	91.40
Product quality	4.72	94.44
Technical Services	4.64	92.85
After-sales service	4.64	92.85

Customer Service

Global Online Technical Service Platform

Since the second quarter of 2024, Advantech has adhered to ESG principles to promote digitalization in environmental management, aiming to reduce its carbon footprint and improve energy efficiency through effective utilization of cloud resources. By optimizing the customer service chatbot, we have introduced an AI agent to provide customers with instant replies to product information queries and diverse services. In 2024, the monthly growth rate of AI Agent-assisted conversations reached 26.1%, accompanied by a 10% increase in conversation satisfaction.

Advantech continues to invest resources in developing chatbot technology. The team is designing a new AI-driven Sales Leads analysis model that automatically identifies potential business opportunities from all Live Chat conversations and generates Sales Leads for assignment to LDRs for follow-up, in turn considerably improving the sales team's efficiency. Since its implementation in August 2024, the system has generated 189 business opportunities by December of the same year, achieving a lead conversion rate of approximately 27.2% and resulting in a total profit of USD 108,301.

To continue enhancing product and service quality while considering the needs of stakeholders (social aspect), Advantech has actively introduced customer feedback mechanisms into its service processes. After each service, the system automatically invites customers to fill out a brief questionnaire to ascertain their satisfaction with the service and collect suggestions, which are compiled and analyzed through the system and transformed into tangible improvement plans. The Company also regularly reviews and analyzes the results, continuously optimizing product functions, service processes, and customer service personnel training based on common issues or suggestions. The real-time and convenient feedback mechanism facilitates a faster understanding of customer needs and allows for the timely incorporation of their feedback into product and service adjustments to protect customer rights and improve satisfaction.

Looking ahead to 2025, Advantech will concentrate on the technical services management platform migration project, with plans to implement Salesforce Service Cloud. The new platform will bolster centralized CRM data management, enhance cross-team communication efficiency, and streamline customer service processes, thereby laying a more robust foundation for after-sales service and customer relationship management. This will support ongoing improvements in service quality and efficiency, while also reinforcing data security and corporate governance.

Advantech’s online technical support process

Analysis of Technical Support

Advantech effectively increases service efficiency through an automated work order system and continuously optimizes products and services by gathering customer feedback through the CRM platform. Meanwhile, ESG principles are incorporated into the service process: in the environmental (E) aspect, digital technology is used to lower carbon footprint and cloud resources are utilized efficiently; in the social (S) aspect, efforts are made to elevate customer service experience and implement sustainable development; in the corporate governance (G) aspect, data security and risk control are the main focus, and customer feedback is integrated into the decision-making process.

Customer Privacy Protection

To ensure that everyone can use Advantech's various services with peace of mind, Advantech has formed a personal data protection team under the legal affairs organization and formulated the “Advantech Co., Ltd. Personal Data Protection Manual” and “Privacy Protection Policy”. Protection of privacy rights by laws and the General Data Protection Regulation (GDPR).

Organizational chart of the personal data protection team

Protection of privacy

Internal data access is subject to privilege control, and users must apply for it through the internal process form.
New employees are entitled to privacy-related education and training.
The purchasing unit announces Advantech‘s privacy policy in the purchaser management system every year, and requires suppliers to sign it during login before performing related operations.
Privacy-related clauses in the standard contract that both parties are required to abide by.
Establish Advantech‘s privacy policy and explain Advantech’s processing and protection of personal data in detail. Please refer to Advantech‘s privacy policy for details: https://www.advantech.com/en/legal/privacy

Privacy protection for digital marketing and customer management

Differentiating the data that can be accessed and edited according to the regulations of the region to which the user belongs to ensure that customer data is properly managed and used.
The customer data source channel will request customers to read Advantech's privacy policy, and relevant consent will be recorded.
Corresponding supporting principles have been developed in accordance with the privacy needs of countries, including Japan, Turkey, California, and Europe's GDPR.

Privacy-related consent signed