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FINANCE STRATEGIC OPERATING MODEL

FINANCE STRATEGIC OPERATING MODEL. Craig Witcher VP, Corporate Controller and Chief Tax Officer. FINANCE SOM STRATEGIC VISION AND GOALS.

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FINANCE STRATEGIC OPERATING MODEL

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  1. FINANCESTRATEGIC OPERATING MODEL Craig WitcherVP, Corporate Controller and Chief Tax Officer

  2. FINANCE SOM STRATEGIC VISION AND GOALS A more agile, flexible Finance organization, able to support changing business needs while strengthening accountability for financial information and results 1 Align organization to better serve Regional and Enterprise financial objectives I N I T I A T I V E 2 Consolidate finance activities in Enterprise Shared Service Centers (ESSCs) I N I T I A T I V E 3 I N I T I A T I V E Standardize global processes Integrated actions to drive the Finance vision 2

  3. FINANCE SOM REALIGN THE FINANCE ORGANIZATION ESSCs allow Market Finance to focus more on business support and growth R E G I O N / M K T E S S C • FOCUS • Supporting business growth and profitability • DELIVERABLE • Actionable business information, analysis, and support • FOCUS • Repeatable processes, transactions and accounting; base level analytics • DELIVERABLE • Timely, efficient, consistent and reliable data ESSC Region/Mkt 3

  4. TRANSITION IN SAN JOSE • September 2009 - Board approves Finance SOM • January 2010 – Site construction begins, first employee hired • April 2010 - Operations begin 4

  5. TRANSFORMATION IN FINANCE In less than two years of operations, we moved processes that are core, complexandglobalfrom Headquarters and 16 markets 5

  6. TRANSFORMATION IN FINANCE OPERATIONS RECEIVING EPC SERVICES 7

  7. TRANSFORMATION IN FINANCE Corporate Headquarters OPERATIONS RECEIVING EPC SERVICES Corporate Headquarters 7

  8. TRANSFORMATION IN FINANCE Corporate Headquarters OPERATIONS RECEIVING EPC SERVICES Corporate Headquarters 7

  9. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North America OPERATIONS RECEIVING EPC SERVICES 7

  10. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States OPERATIONS RECEIVING EPC SERVICES United States 7

  11. TRANSFORMATION IN FINANCE OPERATIONS RECEIVING EPC SERVICES Corporate HeadquartersAmway North AmericaUnited States Canada Canada 7

  12. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic OPERATIONS RECEIVING EPC SERVICES Dominican Republic 7

  13. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto Rico OPERATIONS RECEIVING EPC SERVICES Puerto Rico 7

  14. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto Rico OPERATIONS RECEIVING EPC SERVICES Puerto Rico 7

  15. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto RicoAmway Latin America OPERATIONS RECEIVING EPC SERVICES 7

  16. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto RicoAmway Latin AmericaCosta Rica OPERATIONS RECEIVING EPC SERVICES Costa Rica 7

  17. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto RicoAmway Latin AmericaCosta Rica El Salvador OPERATIONS RECEIVING EPC SERVICES El Salvador 7

  18. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto RicoAmway Latin AmericaCosta Rica El Salvador Panama OPERATIONS RECEIVING EPC SERVICES Panama 7

  19. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto RicoAmway Latin AmericaCosta Rica El Salvador Panama Guatemala OPERATIONS RECEIVING EPC SERVICES Guatemala 7

  20. TRANSFORMATION IN FINANCE OPERATIONS RECEIVING EPC SERVICES Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto RicoAmway Latin AmericaCosta Rica El Salvador Panama Guatemala Honduras Honduras 7

  21. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto RicoAmway Latin AmericaCosta Rica El Salvador Panama Guatemala Honduras Argentina OPERATIONS RECEIVING EPC SERVICES Argentina 7

  22. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto RicoAmway Latin AmericaCosta Rica El Salvador Panama Guatemala Honduras Argentina Chile OPERATIONS RECEIVING EPC SERVICES Chile 7

  23. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto RicoAmway Latin AmericaCosta Rica El Salvador Panama Guatemala Honduras Argentina Chile Uruguay OPERATIONS RECEIVING EPC SERVICES Uruguay 7

  24. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto RicoAmway Latin AmericaCosta Rica El Salvador Panama Guatemala Honduras Argentina Chile Uruguay Colombia OPERATIONS RECEIVING EPC SERVICES Colombia 7

  25. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto RicoAmway Latin AmericaCosta Rica El Salvador Panama Guatemala Honduras Argentina Chile Uruguay Colombia Venezuela OPERATIONS RECEIVING EPC SERVICES Venezuela 7

  26. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto RicoAmway Latin AmericaCosta Rica El Salvador Panama Guatemala Honduras Argentina Chile Uruguay Colombia Venezuela Mexico OPERATIONS RECEIVING EPC SERVICES Mexico 7

  27. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto RicoAmway Latin AmericaCosta Rica El Salvador Panama Guatemala Honduras Argentina Chile Uruguay Colombia Venezuela Mexico Brazil OPERATIONS RECEIVING EPC SERVICES Brazil 7

  28. TRANSFORMATION IN FINANCE Corporate HeadquartersAmway North AmericaUnited States Canada Dominican Republic Puerto RicoAmway Latin AmericaCosta Rica El Salvador Panama Guatemala Honduras Argentina Chile Uruguay Colombia Venezuela Mexico Brazil OPERATIONS RECEIVING EPC SERVICES 7

  29. TRANSFORMATION IN FINANCE I N T E G R A T I O N THE EPC SUPPORTS HQ operations $1.1 Billion in affiliate sales 6,000 employees served in the Americas AT THE EPC TODAY 167 employees 32 currencies 7 time zones 3 languages 8

  30. TRANSFORMATION IN FINANCE RECORD TO REPORTTwo annual closes Four quarterly closes 17 month end closesTwo general ledger systemsClosing the books faster than in HQ C O R E S E R V I C E S 9

  31. TRANSFORMATION IN FINANCE RECORD TO REPORT C O R E S E R V I C E S PROCURE TO PAY230,000 payments processed $2 Billion in annual expenditures 9

  32. TRANSFORMATION IN FINANCE RECORD TO REPORT C O R E S E R V I C E S PROCURE TO PAY PAYROLL PROCESSING200,000+ paychecks $430 Million of payroll processed 9

  33. TRANSFORMATION IN FINANCE RECORD TO REPORT C O R E S E R V I C E S PROCURE TO PAY PAYROLL PROCESSING ORDER TO CASH190,000 Latin IBO orders released for shipment 9

  34. TRANSFORMATION IN FINANCE RECORD TO REPORT C O R E S E R V I C E S PROCURE TO PAY PAYROLL PROCESSING ORDER TO CASH IBO CONTACTSBrazil Tier 2 and ANA Accounts Receivable over 44,000 calls answered 9

  35. TRANSFORMATION IN FINANCE Amway is first to provide these uniqueand complexservices inCosta Rica C O M P L E X S E R V I C E S 10

  36. TRANSFORMATION IN FINANCE BONUS1.5 Million payments to IBOs$440 Million in bonus payments C O M P L E X S E R V I C E S 10

  37. TRANSFORMATION IN FINANCE BONUS C O M P L E X S E R V I C E S TREASURY $2 Billion in global cash managed $1 Billion in FX transactions annually190+ bank accounts around the world 10

  38. TRANSFORMATION IN FINANCE BONUS C O M P L E X S E R V I C E S TREASURY TAX300+ returns prepared annually U.S. federal, state, and local tax Latin regional tax support 10

  39. TRANSFORMATION IN FINANCE G L O B A L S E R V I C E S Amway is the only shared service center in Costa Rica providing these services globally 11

  40. TRANSFORMATION IN FINANCE G L O B A L S E R V I C E S TRANSFER PRICING 145,000 transfer prices set annually for 56 affiliates around the world 11

  41. TRANSFORMATION IN FINANCE G L O B A L S E R V I C E S TRANSFER PRICING INTERCOMPANY BILLING 3,600 reconciliations and 1,800 billings for 86 entities around the world 11

  42. TRANSFORMATION IN FINANCE – Organizational Learnings C H A L L E N G E S PEOPLE PROCESSES • Lift and shift • Poor and/or outdated processes • Reliance on workarounds • Managing change • Gen Y 12

  43. TRANSFORMATION IN FINANCE – Organizational Learnings L E S S O N S L E A R N E D PEOPLE PROCESSES • Hand over, not hand off • First things first (quality and service) • Vigorously address areas of process weakness • Integrity of data input matters • One-team attitude • Customer first mentality • Enterprise learning curve • Rigorous training, cross training, succession planning 12

  44. TRANSFORMATION IN FINANCE Kuala Lumpur, Malaysia ESSC Asia • Lessons Learned in Europe and Americas incorporated into planning • Multi-functional shared services envisioned • 1st Finance transition in process – Japan • Next waves – Korea and Australia 13

  45. TRANSFORMATION IN FINANCE – Process Standardization Kuala Lumpur, Malaysia Driving Common Practices San Jose, Costa Rica • GLOBAL • Common KPIs • Atlas processes Krakow, Poland • REGIONAL • Common activities • Consistent processes 14

  46. FINANCE SOM STRATEGIC VISION A more agile, flexible Finance organization, able to support changing business needs while strengthening accountability for financial information and results THANK YOU 2

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