World class quality and efficiency in financial reporting to facilitate planning, follow-up and control A standardized* record-to-report process shared by all Volvo group companies running Master Finance

1. ”Aristokit”
Process driven Design
© 2008 AB Volvo

2. - Presentation -
Finance, strategy and
business development,
Mikael Bratt, Senior Vice President & CFO
710, Corporate Strategy & 450, Corporate Audit 440, Financial Reporting, 420, Business Control 410, Corporate Finance
Business Development Mikael Hagström,Vice President
442, Group Accunting 441, Master Coordinator 447, Internal Control
Finance, Helen Kylstad
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

3. - Presentation -
VGHQ, Master coordinator Finance
Volvo Group SAP Solutions
Within Business administration
Global
BW
Global
Master CAPS Credit MIC
Finance Portal HR Portal
System/Solution Owner
Mc Finance assignment is to govern Volvo Group SAP solutions by securing that
support, maintenance and development are in line with Volvo Group Business
requirements.
Anders Jarenfors
Responsible for;
•Common structures, methods and tools
•Common Support and Maintenance
•Project Owner, Aristokit
•Master Finance Implementation
•Nissan Diesel
•Volvo in Russia
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

4. - Volvo Group -
AB Volvo
Business Areas
Mack Renault Volvo BA Asia Construction Volvo Volvo Financial
Incl. Buses
Trucks Trucks Trucks Nissan Diesel
Equipment Penta Aero Services
Business Units
Volvo 3P
Volvo Powertrain
Volvo Parts
Volvo Logistics
Volvo Information Technology & Others
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

5. - Size is not everything, but it matters -
Number of Companies
Number of Employees
within Volvo Group
400 100.000
Number of Companies
Number of Master Finance users
running Master Finance
130 6.500
Turn over covered in FTE’s working with
Master Finance Master Finance
75-80% 7
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

6. Finance Challenge

7. - Vision – Financial Reporting -
World class quality and efficiency in financial
reporting to facilitate planning, follow-up and control
A standardized* record-to-report process shared by all Volvo group companies running Master Finance
A non-event closing
One set of key controls
Transparency and Quality
Master Finance coverage
– 250 Companies plus acquisitions
* The Record-to-Report process is the same within Volvo for the same type of companies, i.e. sales companies, holding
companies, industrial companies, but not necessarily identical for all companies.
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

8. - Transition to common Finance platform -
One Finance
Platform
several systems
SEM-BCS
<
R/3 FI/CO
”Master Finance”
Diversified
Accounting
Solutions
1999 2006
AB Volvo AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo
8

9. - Conceptual overview, Mc Finance Solutions -
Other AB Volvo Common solutions
F0R
BA systems Master Finance System 001
Non FI/CO systems
Etc. Master Development
CRM, VFS FT5 FA5 F05
FT6 FA6 F06
GCD GCA GCP FMD FMA FTC FAC F0C
R/3, VIT
900 900 FT4 FA4 F04
FT3 FA3 F13
VRD VRA VRP
CRM, VIT FT2 FA2 F02
VCD VCA VCP
Solution Manager ZA4 Z04
MOM, VCE
EVT EVA EVP ( SMD SMP
) FE1
700/710/720
800/810/820
R/3, 3P
PSD PSA PSP CAPS, AB Volvo
S5D S5A S5P
R/3, Logistics
VLD VLA VLP SOX/MIC, Finance
MID MIA MIP
R/3, Bus
BSD BSA BSP Credit Mgmt, AB Volvo
CMD CMA CMP
CRM, Bus
BTD BTA BTP
XI HR, AB Volvo
-Korea VCE
-Canada, Graders VCE
( VXD VXP
) HRT HRA VCP
-Canada, Prevost VBC BW-systems excluded
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

10. Solution - Aristokit

11. - Aristokit -
Business
Community Refrence content
Aha!
What information
is required?
System provider;
-FI/CO
-SolMan
-ECC
How shall we do this? -Netweaver
-SEM
What’s Master Finance? -BW
-...
Common Communication Platform
”SOx processes”
Support
Master Documentation Master Finance Kit
Framework Financial Solution(s);
-Master Finance Enahancement
-CAPS Maintenance
Financial Policies -Credit Portal Operations
and Procedures -MIC
-HR
Development
Information Model
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

12. - Aristokit – Master Finance Core
- Aristokit -
Model
Process driven design to
describe the content in Master
Finance, including
documentation, Education,
rules and guidelines for
Development, Maintenance
and Implementations
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

13. - Aristokit – Define, Maintain, Implement, Communicate & Educate -
Master Finance Design Board
Governance
Communication
Maint./Dev
Template/maint
Core
model
Training Design
Global
Road Map
Core model
Road map
enhancements Assignment enhancements
Roll-Out
Company
Implementation
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

14. - Aristokit – Areas -
Process The framework of structures which guides and controls the implementation and
Organization maintenance of the Volvo Master Finance Concept.
The information which creates a Master Finance solution fit to drive in accordance with
Solution decided Financial Policies and Procedures. Hence, design and documentation,
including the information and procedures which translates Volvo’s financial policies into
practical instructions and steering Master data
The detailed set of actions and instructions which accomplish a Master Finance
Road Map
implementation project from order to delivery.
Infrastructures The Master Finance technical architecture and the tools which support an
Tools implementation of Master Finance.
Change The tools, information and procedures which enable an implementation and facilitates
Management the company’s compliance to accounting and reporting standards in the Volvo Master
Finance Concept.
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

15. - Master Finance Model -
Master Finance Core:
Designed and communicated.
DEzz GBxx Functionality available for all
DExx GBzz Deliverable in Master Finance implementations
DE GB
SEzz
FRzz
SE FR
SExx FRyy
Master Finance Master Finance Country settings:
Master Finance Country settings
Core
Core Country specific scripts
ZZ04
USzz Reflected legal requirements
ZZ US
ZZ05
USxx
XX01 XX JP
JPzz
XX02
Master Finance Local settings and Configuration:
JPyy
Settings to make core operational
Approved local functionality
Gap analysis
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

16. - Aristokit – Process Architecture -
Synchronized
Solution Manager
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

17. - Aristokit – ARIS Solution Manager -
Business / SAP Process Hierarchy SAP Solution Manager
Definition Copy
BPR Download
3
Project for
Assignment 4 2 1
ARIS DB
Selection of
Download
Modify Def.Copy
Definition Copy BPR
(Processes &
Process steps)
Definition Copy
5
Synchronization
Template
Project
Volvo Standard
Processes
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

18. - Aristokit – Publication -
- Aristokit Process Web -
Master Finance Core functionality
described from Volvo Group ”Mega
Processes” to actual SAP
transactions...
...and communicated on
the intranet
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

19. - Aristokit -
Violin ARIS Solution Manager Solution Manager
Aristokit Process Web Solution Design Solution template project Master Finance Roll out project Road map
Global Template
Synchronize
Publish
Knowledge
Copy Copy Warehouse Assign
Reconciliation
Report
Local Project
Synchronize
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

20. - Volvo Project Method -
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

21. - Project method – detailed and in SolMan -
2 ”Freeze” the Road map
”Freeze” the Road map
and upload into SolMan
and upload into SolMan
Road Map facts...
9 Project phases
1 During Aristokit project,
During Aristokit project,
110 WorkRoad Map was
the Packages
the Road Map was
developed in ”Excel”
developed in ”Excel”
330 Activities
• RECI included
• Project track classification
24 Milestones
700 Accelerators
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

22. - Project method – detailed and in SolMan -
Each activity have a
Instruction assigned
Road Map in tree Most Activities have one
structure, assigned or several Accelerators
to a Project
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

23. - Summary -
Master Finance Design Board
Governance
Communication
Maint./Dev
Template/maint
Core
model
Training Design
Global
Road Map
Core model
Road map
enhancements Assignment enhancements
Roll-Out
Company
Implementation
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

24. - Summary -
Communication and Design
Design in ARIS and publication on the intranet. emphasize a Business driven understanding propelled with
documentation.
With the connection between ARIS and Solution Manager we have been able to retreive and use SAP Standard
content when designing Master Finance
Some documentation still under construction
Training
Possible to ”jump” from published models into a SAP training environment.
Learning maps per Business Scenario for existing companies and new Roll outs under construction
Mehodology
The Implementation Road map and entire methodology is based on the Process driven design and synchronization
with Solution Manager, stored in one place. This limit number of supporting systems and duplications of templates.
Test scenarios and some documentation is still under construction
Standardize and Re-use
Having the core model in ARIS as template and synchronizing this in SolMan template project lead times will be
substantially improved and all will be re-usable for next implementation
Pilot start in May
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo

25. - Lessons... -
Buy in
Business has been overall positive – But want to see Business case realized
Partly overlooked compexity of IT organisation and that ”freedom” is seen as less
New role for Shared Service Center
Change
The Master Finance Concept based on the Solution Manager and ARIS tools mean change
- Don’t underestimate the need to communicate and explain
- Time and Cost
Size does matter
Master Finance Solution scope is Volvo Group – many aspects to consider in Design and Documentation
Project size both in terms of activities and people add complexity
- Cultural aspects
- Time zone
-Availability
Project scope in a ”closed” system mean many interfaces and high demand on coordination
AB Volvo
441, Master Coordinator Finance
© 2008 AB Volvo