Database and Domain Consolidation Paul Zarazinski – CIO Culligan International Tim Lovely – Logan Consulting

1. Database and Domain ConsolidationPaul Zarazinski – CIO Culligan InternationalTim Lovely – Logan Consulting MMUG March 2008

2. Who We Are • Culligan International has offices in over 75 countries • 750 Dealerships in the US alone • 65 Company Owned Dealerships the remainder Franchise • Products: • Household Water Softeners and Filters • RO Systems • Commercial Water Softeners and Filters • Water & POU Coolers • Water & Salt Delivery • Service • Retail Products • In-Store Bottle Water Dispensers

3. Culligan Business Model • Business model similar to McDonalds – Company Owned Dealers and Franchises • Company Owned Dealers (COD) sell direct to households, service and deliver product • CODs and Franchises purchase product from Culligan Corporate • A year ago every business unit was on a different system.

4. Focus On Improving Efficiency • Culligan was acquired by Clayton, Dubilier & Rice, Inc (CD&R) a private equity firmin 2004 • Since that time Culligan’s strategy has been focused around improving efficiency through re-engineering efforts • Outsourced most manufacturing • Implementing shared services • Centralizing Finance • Implementing single system to support North America

5. Current State Applications In 2005 2005 “Current State”: • Five separate ERP systems with little integration in North America • Information is difficult to get • Highly modified systems make changes complex • IT staff knowledge segregated by system • Rogue databases and spreadsheets

6. Future State Applications In 2005 Project List: • Implement QAD to support Retail (OCT 2006) • Replace PRMS with QAD (Feb 2007) • Upgrade Canada QAD from version 7.9 to version Eb2.1 (May 2007) • Upgrade CODD QAD from 2.0 to 2.1 (Nov 2007) • Create a standard chart-of-accounts (Jan 2008) • Replace BaaN (Apr, 2008) • Combine Corp and CODD databases (May, 2008) • Combine Canada QAD and US QAD (Q4 2008)

7. Project History • Project planning started in June of 2007 • Logan Consulting was selected as our partner (Logan has partnered with Culligan for the past several QAD projects) • Official kick-off in September 2007 Project Scope • Migrate to one financial system • All GL/AP functionality moved from BaaN to QAD • Move to one QAD system for Culligan US • Move to one general ledger Chart of Accounts (COA) • Automate inter-company transactions - • Change the way we order and receive product • Eliminate inter-company checks • Remove AR billing consolidation - Simplify billing process • Reduce time for overnight processing • Simplify customer refunds

8. The Project – Key Project Tasks • Define Approach – Domain / Entity / Site Model • One or multiple domains? • Review Processes • Confirm existing business and QAD related processes • Define and Document New and/or Changed Processes • Current state and future state analysis • Rationalize All Required Data • Combine data from two different QAD Systems and one Baan system • Design & Development of Conversion / Consolidation • Conversion of Baan consolidation of two QAD databases • User Testing • End User Training • Conversion and Phased Rollout

9. Single Database eB 2 . 1 Database for Culligan US Operations ( excludes Eagan ) Domain – US 1 CODD Retail CORP Entities – CODD – one per Branch Entities - Corporate Entity – Retail - 02 300 - 810 and 03 Rosemont , 04 Franchise , 898 Management 05 CWC , 08 IHQ , 09 CORP 899 Retail Sites under 03 Sites under 02 900 COD Corporate 11 DSC Mira Loma / TPL 21 Demar SSCM Support Svc Case Mgmt 12 Libertyville 21 R Returns 13 Vernon Hills 12 R Retuns Sites under CODD Entities 04 , 08 , 09 for Purchasing Site = Entity except Hub and Spoke may be multiple sites / entity Define Approach Domain / Entity / Site Model • Defined a single database / domain model • Though COD and CORP Culligan have distinct business models, move to one domain made sense • Single COA and Item Master important • Fosters future strategic business process changes • Users need to think as one business….

10. Review Processes • In order to merge businesses, we focused on the processes that would be changing and would be required to support the business strategy: • Central GL and Financial Reporting Model • Shared Services Accounts Payable • Branch / site level voucher hold process • Inter-company ordering and auto-payment process • R&D and Item Definition – including costing • Other Processes • Customer refunds • AR consolidation

11. Define and Document New / Changed Processes GL – Current State – Baan for COD QAD GL interfaced to Baan for all GL reporting Baan GL Interfaced to HFM HFM used at highly summarized level GL - Future State – QAD COA and HFM QAD used for all close related financial reporting HFM used for consolidation of all Culligan worldwide operations Mapping from QAD to HFM will support more detailed and flexible financial reporting Changes to COA and reporting requires communications to all parties involved – with 65 branches / entities, reporting needs to be consistent for COD, as well as other businesses

12. Define and Document New / Changed Processes AP – Current State Baan AP – used for COD QAD AP – used for CORP / Culligan business Suppliers, PO’s, and Receivers interfaced between Baan and QAD AP - Future State – Shared Services AP QAD used for all AP processing Optimize inter-company ordering, AP and AR from third party transactional model (order imports, in transit tracking, ERS and auto payment application) Implement new voucher hold / approval process at branch sites R&D and Item Definition – including costing Two different processes and organizations exist Mix of Linked Site Costing and Item Site Costing in place Future process goal is to implement one common process for managing new and item changes

13. Define and Document New / Changed Processes COD Customer Refunds Current State – Added custom integration with Baan to create supplier and voucher for refund payment Future State – With Baan decommissioning, create supplier and voucher in QAD for refund payment AR Consolidation Current State – Multiple COD AR transactions are close/paid throughout the month to create one AR record to accommodate cash application against one invoice instead of many (COD customer receives detailed monthly statement of services with one total amount to pay. ) Future State – legacy requirements no longer valid….we will present statement with same information, but SSC (Shared Services Center) needs visibility into detail and wants to apply cash against detail Future State – Scope includes updating integration to third party billing service, integration with lockbox payment processing, and performance / optimization of AR reporting

14. Rationalize All Required Data Key Drivers • Shared Services Model and Flexibility for Future Business Strategy Support • Central AP and AR Supporting 70+ entities and 3 business models • Retail, COD, Culligan Corporate • Move away from Baan GL and to one QAD COA integrated with HFM • Move to central R&D / Item Management structure • Facilitate eventual implementation of shared services as business strategy evolves Key Areas • Customer Data • Customers and Customer Ship-To’s • COD has 1,000,000+ Customers and End Users • Supplier Data (from 3 systems Baan, COD QAD, CORP QAD) • Supplier and Supplier Remit-To’s • Control Files • COA – GL needed rationalization • Users and Security

15. Rationalize All Required Data Key Issues • Same Item Number – Different UM’s • COD stocks and sells 1 filter • CORP stocks and sells a case of 12 filters • Move to same UM or new item number • Conflicting Static Data • Duplicate address codes • Item, Customer, and Supplier Attributes • Menus for custom programs • Conflicting Dynamic / Historical Data • Transaction numbers • Batch / Voucher numbers • Invoice Numbers

16. Rationalize All Required Data Key Issues • GL COA • Business had different fiscal calendars and COA • Converted entire COA in January 2008 • New product line and COA reporting model for COD • Control Files • Prefixes • Numbering • Tolerances • Controls – Credit hold settings, etc…

17. Design Considerations New process related programs Multiple mock conversions Incorporate new data design / configuration Account for data management / conflict approaches (ie – conflicting batch numbers or addresses) Consolidation Approach: Transactional/File/Data Size, CODD was 30x bigger than CORP Delete/Archive CODD where possible We will use the CODD Production DB as the “target” database We will move/merge CORP data into it September through November – resolve conflicts in data Need user involvement to review data and test new and existing processes Design & Development of Conversion / Consolidation

18. Design & Development of Conversion / Consolidation CORP Static Data: Customers, Suppliers, Pricing, Comments, Generalized Codes Chart of Accounts, Product Lines, Sales Accounts ATB, Special Instructions, Obsolete Item File Items, BOM’s, Site, Locations Security – Menu, Site, Entity CODD CORP Dynamic Data: Sales Orders, Purchase Orders Distribution Orders, Work Orders, RMA’s AP, AR CORP CORP History: GL,AR,AP, IC Transactions Invoice, Baan AP/GL Baan Static Data, Dynamic Data and History: Inactive Suppliers, AP, COA, Voucher and Payment History, GL Transactional History

19. User Testing and Training User Testing Mock Conversion Testing – User validation of converted data Regression Testing – multiple users testing same functions – focus on standard functions and any custom code – especially related to COD custom SSM areas for delivery and service calls UAT – User Acceptance Testing – focus on new processes Stress Testing End User Training Focused training sessions on key process changes Accounts Payable – Corporate AP team Accounts Payable Voucher Hold – 65 branches and users Inter-company – 65 branches and users GL / Finance – New COA and consolidated reporting Consolidation Changes – As a result of data rationalization, changes to field defaults, menus, processes, etc…will be documented and reviewed with users

20. Conversion and Phase Rollout April 14, 2008 AR Billing Consolidation Removal Inter-company PO Pilot (10 Stores) April 28, 2008 Baan AP/GL Conversion – Move all GL and AP Processing off of Baan Customer Refunds May 12, 2008 Consolidate – Move to one consolidated db for CORP and COD and implement Inter-company Process for 10 sites May 27, 2008 Inter-company – Payments and All COD Branches March and April Open Tasks Testing! Testing! Testing! – Regression, UAT, Stress Testing, Mock Conversion Testing Complete Training Material Development End User Training Continued Communications Meetings Continued Review of Detailed Cutover Checklist Cutover Execution

21. Questions?