Thinking Outside the Box
A pharmaceutical company transforms financial decision support services to improve performance and reduce costsDOWNLOAD
The CFO of a global pharmaceutical company was looking for innovative ways to improve service levels to internal customers while more effectively managing costs. Management had already implemented many traditional cost-cutting measures, but that wasn’t enough. Deloitte was asked to help find innovative ways to do more with less and no idea was off limits.
The initiative began with working sessions held around the globe, bringing together hundreds of the company’s finance professionals and commercial leaders to share ideas on how to improve performance and reduce costs. A portfolio of viable options emerged, from quick wins to bold ideas.
One idea stood out: Like many organizations, the company had a mature shared services organization for routine transactions; however, at the time virtually no global Fortune 50 enterprise had expanded the scope of shared services to include financial decision support activities. The business case was clear, but gaining buy-in proved challenging. Without a comparable industry case study, leaders were concerned that a vastly different approach could affect their effectiveness.
An activity survey revealed that many of the company’s senior finance professionals were spending a significant amount of time gathering and validating data. The project team recommended decoupling these rules-based activities from the analytic role these professionals performed. Moving rules-based activities to a shared services center could free up the finance professionals for more analytic responsibilities.
Creating Decision Support Centers of Excellence was a bold move – financial planning and analysis activities are not usually considered for centralization, especially in a decentralized corporate culture that values local autonomy. This involved:
Financial planning and analysis is highly visible, strategic work performed by senior finance professionals who work in close proximity with the business. With this particular project, Finance leaders were concerned that the projected cost savings were not enough to justify the potential risk to their ability to set strategy, make decisions and direct future financial performance.
Typically, Deloitte would ease their concerns by connecting these executives with other clients who had implemented similar changes. But this project was different – it was the first time financial planning and reporting processes with this large of a scope were centralized at a global Fortune 50 enterprise.
Fortunately, the project team had built strong leadership alliances, which were leveraged to understand and address the concerns up front. In the end, this lead to the transformation of the company’s decision support services. The team followed this process:
One year after the project was launched; the company’s Decision Support Center of Excellence was fully operational, creating considerable value for the business. It is on target to meet the annual savings projections and local finance professionals are adding more value to their country-wide and business-unit finance organizations. They are also on tract to eventually spend 75 to 80 percent of their time on decision support analytics, rather than data gathering and validation.
The team managed an effective/efficient migration, transferring financial reporting activities from more than 60 business units to the new centers. Plus, more than 300 financial processes were streamlined and centralized. Some of the unanticipated benefits of the centralized model included helping to accelerate integration and divestiture activities, easing a global planning tool deployment and improving coordination with other centralized Finance functions.
Perhaps even more important, the company’s organizational culture is being transformed to support streamlined operations and continuous improvement from a global, rather than country, perspective. This initiative laid the foundation for centralizing analytical support on a company-wide basis, supporting the company’s long-term goal of becoming an industry leader through high-quality financial performance.
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