Analog Devices BV Shared Services Centre

1
Analog Devices BVShared Services Centre

• 19th September 2006

2
Agenda

• Background ADI
• Background - SSC
• Services provided
• Characteristics of ADBV SSC
• Questions

3
Background - ADI
4
Analog Devices - Background

• Founded 1965, Limerick 1976
• Headquarters in Boston
• Semi-conductor company, producing intergrated
  circuits
• ADIs circuits - High performance Analog,
  Mixed-Signal and Digital Signal Processing ICs.
• World Wide employees 9,000, Limerick 1,300

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Background Contd

• Manufacturing facilities Boston, Santa Clara,
  Greensboro, Limerick, and Philippines
• Design Centres US, Limerick, UK, Denmark,
  India, China, Spain
• Sales offices throughout US, Europe, Far East
• ADIs Product portfolio over 10,000
• ADIs Customers over 60,000
• Sales FY 05 2.6b

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ADI at a GLANCEHigh Performance Analog and DSP
Wireless Everything
Networking Equipment
Digital Imaging
High-Speed Internet Connections
Personal Computers
Medical Instrumentation
Industrial
Digital Entertainment
Automotive
Aerospace
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Analog Devices Inc
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ANALOG DEVICES B.V. - LIMERICK

• Established 1976
• Approx. 1250 Employees
• Manufacturing x 800
• Product Line x 450
• Main Functions at Limerick Site
• Marketing
• Design
• Test Development
• Wafer Fabrication
• Wafer Sort (Probe)
• Customer Service / Planning
• Quality

Product Line
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Background - Shared Services
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SSC brief history

• IFSC company set up in 1995
• Initially began providing centralised treasury
  services
• Broadened to include transaction processing in
  1999
• Additional headcount in Limerick as more services
  and level increased from 1999 to 2003
• Currently 5 people in SSC

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SSC brief history

• Europe (pre 1995)
• 9 countries
• 10 physical locations
• Each with own inventory, receivables
• 32 Finance staff
• Financial Controller in each country
• Different Finance system
• Different banking processes / systems

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SSC brief history

• Europe (today)
• 11 countries
• 19 physical locations
• No inventory or receivables
• 8 Finance staff at local sites not qualified
  accountants
• 5 Finance staff at Limerick 3 qualified
  accountants and 2 support staff
• SAP world wide finance system
• Common banking process and system

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European Finance Centre - Overview
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Services provided by SSC
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Accounts Payable

• Approx 1.2b worth of invoices processed per
  annum
• Covers local site, Subcontractors and European
  Sales offices
• Procedure
• Invoice to Payables
• Match on SAP
• 3 way match invoice to Purchase Order and Goods
  Received
• Non receipt goods for sign-off (Europe)
• Mismatches and queries
• Monthly payment to vendor account using EDI
  common to all Euro countries now
• Travel Expense Processing Reimbursement

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European Accounting

• 11 Sales Offices
• Local admin/finance person
• Accounting
• Month end close co-ordination
• Journals
• 3 day time-line
• Fixed Asset Accounting
• Quarter end schedules
• Accruals/Prepayments
• Inter-company reconciliations
• Balance Sheet reconciliations
• Revenue commission recognition
• Y/E Financial Statements
• Audit (both local statutory audit and internal
  audit program)
• Statutory Reporting
• Tax
• VAT

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Treasury and Receivables

• Treasury
• FX exposure management
• Cash balance management
• Investments
• Inter Company loans
• Optimise short term cash holding for all of
  Europe
• Cash flows
• Tax
• Annual returns
• VAT management
• Compliance
• Accounts Receivable (ROW)
• Allocation of balance received
• Credit control
• Reporting

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Systems

• SAP
• All Financial Accounting, payables and
  receivables
• Payroll All different throughout Europe
• Manufacturing Promis
• Cost Accounting Impact
• Data Warehouse application and subsystems
• Sales, Bookings, Margin analysis
• Fidelity employee administration
• Excel etc

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Characteristics of ADBV -SSC
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Characteristics of ADBV SSC

• SSC providing Treasury, Payables, Fixed Assets,
  TE, Accounting, Tax, Intercompany accounting,
  Mth end Closing entries and elimination

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Characteristics of ADBV SSC

• SSC providing Treasury, Payables, Fixed Assets,
  TE, Accounting, Tax, Intercompany accounting,
  Mth end Closing entries and elimination
• Level of service depends on country and finance
  resources

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Characteristics of ADBV SSC

• SSC providing Treasury, Payables, Fixed Assets,
  TE, Accounting, Tax, Intercompany accounting,
  Mth end Closing entries and elimination
• Level of service depends on country and finance
  resources
• US company, English bus. language - no language
  skills

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Characteristics of ADBV SSC

• SSC providing Treasury, Payables, Fixed Assets,
  TE, Accounting, Tax, Intercompany accounting,
  Mth end Closing entries and elimination
• Level of service depends on country and finance
  resources
• US company, English bus. language - no language
  skills
• At remote sites, Admin person coordinates
  invoices etc.

24
Characteristics of ADBV SSC

• SSC providing Treasury, Payables, Fixed Assets,
  TE, Accounting, Tax, Intercompany accounting,
  Mth end Closing entries and elimination
• Level of service depends on country and finance
  resources
• US company, English bus. language - no language
  skills
• At remote sites, Admin person coordinates
  invoices etc.
• Analog has Finance Business Partners to support
  local Sales and Design sites (cost control,
  budgeting, etc.)

25
Characteristics of ADBV SSC

• Payroll, vat, local taxes left local (though
  current project to move payroll to one Global WW
  system in 2007)

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Characteristics of ADBV SSC

• Payroll, vat, local taxes left local (though
  current project to move payroll to one Global WW
  system in 2007)
• Preparation of statutory accounts local and SSC

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Characteristics of ADBV SSC

• Payroll, vat, local taxes left local (though
  current project to move payroll to one Global WW
  system in 2007)
• Preparation of statutory accounts local and SSC
• Reporting structure local finance report to
  Euro Fin Cent Mgr located in Limerick

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Characteristics of ADBV SSC

• Payroll, vat, local taxes left local (though
  current project to move payroll to one Global WW
  system in 2007)
• Preparation of statutory accounts local and SSC
• Reporting structure local finance report to
  Euro Fin Cent Mgr located in Limerick
• Review and responsibility for month end accounts
  rests with Euro Fin Cent Mgr

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Benefits to ADI

• Reduced headcount and costs

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Benefits to ADI

• Reduced headcount and costs
• Centralised point for queries (Lmk closer to
  Boston than Berlin)

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Benefits to ADI

• Reduced headcount and costs
• Centralised point for queries (Lmk closer to
  Boston than Berlin)
• Consistency throughout Europe

32
Benefits to ADI

• Reduced headcount and costs
• Centralised point for queries (Lmk closer to
  Boston than Berlin)
• Consistency throughout Europe
• Implementing change more effective and
  efficient

33
Benefits to ADI

• Reduced headcount and costs
• Centralised point for queries (Lmk closer to
  Boston than Berlin)
• Consistency throughout Europe
• Implementing change more effective and
  efficient
• Common banking systems

34
Benefits to ADI

• Reduced headcount and costs
• Centralised point for queries (Lmk closer to
  Boston than Berlin)
• Consistency throughout Europe
• Implementing change more effective and
  efficient
• Common banking systems
• Benefits for SOX, audit, other reporting

35
Benefits to ADI

• Reduced headcount and costs
• Centralised point for queries (Lmk closer to
  Boston than Berlin)
• Consistency throughout Europe
• Implementing change more effective and
  efficient
• Common banking systems
• Benefits for SOX, audit, other reporting
• Facilitated ADI 4 day close

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Thanks and Questions????