Evolving From Single Function to End-to-End Processing

Volvo Group Business Services

1 May 2012

Evolving From Single Function to End-to-End Processing

The Volvo Group case

Volvo Group Business Services

2 May 2012

Volvo Group Business Services

Our brands

3 May 2012

Volvo Group Business Services

Volvo Group Organization

4 May 2012

Trucks Joint Ventures

Group Trucks Technology

Group Trucks Operations

Group Trucks Sales &

Marketing APAC

Group Trucks Sales &

Marketing Americas

Group Trucks Sales &

Marketing EMEA

Finance & Business Support

Business Areas

Construction Equipment

Total turn-over: 310 BSEK (35 BEUR) Operating income: 27 BSEK ( 3 BEUR) Truck deliveries: 240 000

Volvo Group Business Services

Volvo Group Business Services

5 May 2012

A Group Function within Volvo Group

Overall • Present in over 30 countries. • ~2 000 employees.

• 75 000 employees served (of total 100 000). • Securing a single-point of contact for

Volvo Group employees and managing personal data, organizational structures, compensation, benefit, international assignments, recruitment and other critical HR activities for 75 000 employees.

Human Resources

Finance &

Accounting • Total turn-over:310 BSEK (35 BEUR) where Business Services handles 250 BSEK (28 BEUR) in 135 legal entities.

• Legal Chief Accountant responsibility for 135 entities.

.

Figures: February 2012

Volvo Group Business Services

2010 2011 2012 6 May 2012

Volvo Group Business Services in the world

Volvo Group Business Services

Volvo Group Business Services

journey

1998 - 2002 2003 - 2006 2007 - 2010 2011 - 2015

Initiate

Mobilize

Optimize

Capitalize

May 2012 7

Volvo Group Business Services

Volvo Group Business Services Organization March 1st, 2012

FBS

CEO

Business Services

Elisabeth Rocke

HR & Communication

Hans Nordström

F&A Development

Staffan Kullberg

HR & Contact Services Development

Kent Abrahamsson

Controlling

Petter Liderfelt

Strategy & Operational Excellence

Niclas Sjöswärd

On Demand

Services

Niclas Sjöswärd

Global & Regional

Delivery

Philippe Theolier

Region

Asia Pacific

Ulrika Toftevik

Region

Americas & EMEA

Christian Johansson

Volvo Group Business Services

Global functions with different focus

Governance / Support Units

Development Units

Operational Units

Business Services

Elisabeth Rocke

HR & Communication

Hans Nordström

F&A Development

Staffan Kullberg

HR & Contact Services Development

Kent Abrahamsson

Controlling

Petter Liderfelt

Strategy & Operational Excellence

Niclas Sjöswärd

On Demand

Services

Niclas Sjöswärd

Global & Regional

Delivery

Philippe Theolier

Region

Asia Pacific

Ulrika Toftevik

Region

Americas & EMEA

Christian Johansson

Volvo Group Business Services

Major global shared service center trends

• Cost reduction by labor arbitrage and resource centralization

• Proven successful and efficient in specific functional areas

• Steps taken to integrate several functions (multi-functional SSC’s)

• Cost reduction by implementing hub-and-spoke models

• Improved scale and synergy effects by combining several functions into integrated SSC’s

• SSC’s becomes independent business in it self

Shared services today Shared services next generation

May 2012 10

Volvo Group Business Services

Hub and spoke model Implemented by Volvo Group Business Services

Global transaction hub

Shared services satellites local centers

Regional centers

Business Areas / Markets

Decision support Market-specific activities

Local support / specialization

Transaction processing & global center of excellence

May 2012 11

Volvo Group Business Services

Global Center

s facts

Total Global Center

2

Employees Global Center

330

F&A

270 HR

60

Figures: February 2012

May 2012 12

Volvo Group Business Services

Regional Center

s facts

Total Regional Centers

4

Employees Regional Center

710

F&A

510 HR

200

Figures: February 2012

May 2012 13

Volvo Group Business Services

Local Center’s facts

Total Local Center

46

Employees Local Center

560

F&A

490 HR

70

Figures: February 2012

May 2012 14

Volvo Group Business Services

On Demand facts

Total Local Center

42

Employees Local Center

513

F&A

459 HR

54

Figures: February 2012

Present in number of locations

6

Employees On Demand

220 Projects &

Partner Services

90

Training

80

Recruitment

50

May 2012 15

Volvo Group Business Services

From fragmentation to end-to-end processing

Volvo Group Accounting or HR

Admin department

Volvo Group Business Services

EMEA,

Americas & Asia Pacific

Volvo Group Business Services

Global & Regional Delivery

Consolidate Alignment and structure

Transition and transform

Optimize, standardize and

deliver

May 2012 16

Volvo Group Business Services

End to End Accounting Conceptual overview

General Accounting SAP Master Finance Legal entity based

Group GAAP & Local GAAP based

Local input Consolidation Legal entity based, Group GAAP based

Legal Entity Reporting Local Management Report Local GAAP Compliance

Legal entity based

Group Consolidation Group Trucks/BA based

Group GAAP based

Group Reporting Group Trucks/BA based

FPP based Group Financial Control Group Trucks/BA based

FPP based

Business Services -Local / Legal Chief Accountant

Business Services – F&A Global & Regional Delivery

Business Services – F&A Global & Regional Delivery

Business Services – Group Accounting & Internal Control

Corporate Function – Group Financial Reporting Business

divisions

Volvo Group Business Services

Operative Vision

Development

• We develop and build integrated solutions that support and contribute to the Volvo Group’s vision

• A global contact services approach

• Working towards one integrated IT solution per business line (F&A and HR)

One of the most innovative shared service center

May 2012 18

Volvo Group Business Services

• We deliver value for the Volvo Group by meeting business needs in our services in regards to:

• delivery precision • lead time • quality • scope of services

• Volvo Production System and lean services are in a natural way included in all our deliveries

Operative Vision

Delivery

May 2012 19

Volvo Group Business Services

Operative Vision

Volvo Group relations

• We work closely to the business and our services are well integrated to the Volvo Group businesses

• We have a trustful interaction in the end-customer contacts for the Volvo Group

• We have a close cooperation with stakeholders within finance and HR

May 2012 20

Volvo Group Business Services

• We measure our performance and we have proven to be a successful shared service center

• We measure our developments, delivery precision, qualitative output, standardization, etc.

• Quality is part of our daily work through VPS • Getting it right from the beginning • Everyone knows how to get the root cause of

a problem

Operative Vision

Performance

May 2012 21

Volvo Group Business Services

Operative Vision

People

• We have successfully realized a competence shift among our employees

• Majority of our employees have changed work content the last years, to support Business Services transformation

May 2012 22

Volvo Group Business Services

Operational Excellence Vision

Quality Focus: Customer satisfaction / output

ISO Focus: Compliance in process documentation

Process Management Focus: Service Delivery Infrastructure

VPS Focus: Integrated Continues Improvement

Integrated Operational Excellence

World Class Business Admin &

Shared Service Center

Yesterday Today Tomorrow

May 2012 23

Volvo Group Business Services

Customer Satisfaction is the key to success

24

Volvo Group Business Services

F&A and HR Services and

Support

Volvo Group customer facing people & processes

Sales & Marketing, Operations,

Technology etc.

End-customers

Efficiently and qualitative internal services drives internal customer satisfaction in the Volvo Group

Internal customer satisfaction keep focus on external customers and world-class products and services

Focus on external customers and world-class products and services drives end-customer satisfaction and profitable growth

May 2012

Contact details niclas.sjosward@volvo.com +46 31 3233104