Global Rollout Planning and i Procurement Implementation at

Global Rollout Planning and i. Procurement Implementation at Qualcomm

Introduction: Agenda n Key Concepts n Overview of Global Rollout Planning n 2 Oracle Instances l The QCT instance l The Quantum instance n Why 2 instances? n Separation of Production and Non-Prod Procurement n 2007 Implementation Sites 1

Key Concepts n “Design globally; roll out locally” n Clearly state design bias and document assumptions n Understand business requirements at a high level n Involve the business early in the planning process n Implement in those intern’l sites where the need justifies the effort n Build upon prior phases, implementing required functionality as needed 2

2 Oracle instances: The QCT Instance n QCT instance has two application servers: 11. 5. 8 and 11. 5. 9 (lot controlled) n Quantum instance is an Oracle 11. 5. 10 instance, with min. customizations n Each organization “owns” its own inventory; common inventory items n QSCO (manufacturing) has no P&L, and will liquidate costs to other BU’s QCT Instance FAB Suppliers Qualcomm 3 4 B 2 message from SAT 3 B 2_C-O message to SAT 3 B 2_C-I message from FAB PO for DIE items SAT Organizations Service PO for FG items

2 Oracle instances: The Quantum Instance “ 01” Legal Entity Other legal entities QSCO Production Procurement Corp Non-Prod Procurement 4

Qualcomm Inventory Orgs Structure 5

Why two instances? The QCT instance is geared to Qualcomm’s chip manufacturing business, is heavily customized, and uses “lot control” and other features that are not attractive to the Qualcomm discrete manufacturing businesses n The QCT instance uses two application servers, one Oracle 11. 5. 8 and the other, an Oracle 11. 5. 9 instance, primarily to support Oracle’s Advanced Supply Chain Planning (ASCP) engine n The QCT instance does not include project accounting, nor does it make allowance for international rollout n There is continuing discussion in the press about “spinning off” the chip business n 6

Separation of Prod and Non-Prod Procurement EMRs Direct and NPI Indirect and Services Shelter and Bldg M Corp Procure ** EMR’s also directed to QGTC, MUI, QMT and QSCO based on department 7

Quantum Implementation Sites Russia (2) Canada (1) UK(5) San Diego SD 1 QMT San Jose Tijuana, Mexico SD 2 Mexico(6) EU (DE, ES, FR, IT, NE, SE) (6) Korea(2) Japan(2) China(3) Israel(1) Taiwan (3) QMT Taiwan India(3) Vietnam(1) Singapore (1) Indonesia (1) Brazil (1) South Africa (1) Australia (2) Argentina (1) Actual sites, 2007 rollout Potential sites, 2008 + global rollout 8

Services Procurement and Intern’l Planning: Agenda n Business Processes l EMR- related transactions and i. Procurement (Phase I and ongoing) l Supplier visibility to transactional data using i. Supplier (Phase I and ongoing) l Intercompany transactions between legal entities (Phase I) n International Requirements n International Sites Planning n Next Steps and Action Items n Additional Considerations n Next Steps and Action Items 9

Intercompany Transactions Internal Sales Order for transaction between Legal Entities • Internal Req initiates process • Internal Sales Order created • Ship against Internal SO (QSCO) • Accounting driven by Interco Rel • Process defined in Shipping Net • Both IC AR and AP Invoices Internal Drop Shipments for ’ 01’ transactions • Shipment initiates process • No Internal Sales Order • Ship against order placed in IO • Accounting driven by Interco Rel • Process defined in Shipping Net • Both IC AR and AP Invoices 10

International Requirements Gathering • Needs assessment driven by the business • Focus in on tangible benefits that accrue by implementing Oracle • Offices grouped by size, affiliation to U. S. legal entities • Benefits ranked by the business in order of importance 11

Potential Sites and International Rollout Considerations Div # Location BU Outsourced International Rollout Considerations: 72 Bangalore QCT In house 47 Germany QCT Outsourced 32 UK QCT In house 4 Hyderabad QCT In house 2 Israel QCT In house 51 Japan QCT In house 49 China QCT In house 26 Korea QCT Outsourced § Common Modules and Common Business 83 Taiwan QCT Outsourced 93 Italy QCT Outsourced 75 Taiwan QMT In house Processes vis-à-vis local business requirements from process perspective 43 Europe QGBD Outsourced 4 China QGBD In house 4 Taiwan QGBD Outsourced 15 Korea QGBD Outsourced 52 India QGBD Outsourced 19 Japan. KK QIS In house Beijing Expat QIS In house 40 Cambridge (UK) QIS In house 78 Pool (UK) QIS In house 4 UK (expat) QIS In house 4 § Set of Books (Calendar, Currency, Chart of Accounts), Doc Sequencing in Europe § Statutory Reporting Requirements § Currency and Exchange Rates § Tax Rates and Reporting § Languages (both forms and reports) § Document layout by Country § Knowledge of Oracle, e. g. AX and MRC § GAAP versus STAT (local) accounting § Consolidations/ FASB 52 Requirements 12

Standard Oracle (“Silo”) Multi-Org Model All Subsidiaries are Parallel Entities Ledger Consolidation Central Ger L 1410 1462 Fra U. K Ita Swe Den 1475 1473 1463 1444 1432 Fra Inventory: EE Mea Hol Bel Swi Aus Spa Pol 1461 1442 1465 1415 1467 14 xx Swe Den Nor Fin One Planning Org and One Global Master. 13 Spa Por

Option I: Proposed Multi-org Structure using MRC 14

Option II: Proposed Multi-org Structure without MRC 15

MRC Explained Convert Direct Entered JVs from Euros to GBP Europe Primary SOB (Euros) UK Reporting SOB (GBP) Post Transactions to Functional SOB UK Operating Unit (Euros) Post Transactions to Reporting SOB Order Management Accounts Receivable Purchasing Accounts Payable UK Operating Unit in GBP 16 Subledger Reporting in Euros Subledger Reporting in GBP

Additional Globalization Considerations Common Country Features n n Set of features that apply to a general region or set of countries together (e. g. High Inflation Latin American countries) Supports VAT processing and subledger reporting in support of VAT Contains some functions specific to certain countries (Receipt Acknowledgement for Greece and Portugal) Globalization fields for additional data collection 17

Additional Globalization Considerations Common Country Features GL Balance Inflation Adjustments l Asset Inflation Adjustments l Inflation Management l Support processes l Statutory Account Classes and Trial Balance Reporting Gapless Document Sequencing l Customer Balance Reporting l Supplier Balance Reporting l Regional Reporting (Receipt Acknowledgement, Regional Invoice) l Tax Allocation Accounting l Subledger Accounting l l Statutory Accounting GL Entry Reconciliation to Control Accounts Latin Tax Engine l VAT Reporting Ledgers (GL/Payables/Receivables VAT Registers) 18

Additional Globalization Considerations Common Country Features n n n For implementations with VAT or specific statutory reporting requirements, Common Country Features are highly recommended Supports country specific globalizations and in conjunction with base financial capabilities Additional “Globalization” fields are provided which allow you to add country specific information to subledger transactions based upon the country of operation (e. g. Scandinavian Invoice Info) Access country specific functionality/fields through Country specific responsibilities DOES NOT replace Global Accounting Engine 19

Additional Globalization Considerations Countries with Country Specific Financials are: Argentina Australia Austria Belgium Brazil Canada Chili Columbia Czech Republic Denmark Finland France Germany Greece Hungary Italy Japan Korea Mexico the Netherlands Norway Poland Portugal Singapore Spain Sweden Switzerland Taiwan Thailand Turkey Note that China, India and Russia are not listed. Bolded countries are within scope of the Qualcomm global implementation. 20

Conclusion