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Finance Transformation in Pharmaceuticals - From the F Troop to the 82nd Airborne


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Abstract

The finance organization at this leading pharmaceutical company generated considerable business value through its understanding of company issues, its analytical capabilities and its responsiveness to operating-unit needs. The challenge: Could the finance function continue to do all that – and improve efficiency at the same time?

The Challenge

Responding to slackening growth and profits in the pharmaceutical industry, the company had implemented an overall enterprise effort to reduce costs and improve efficiency in its support functions. The company also wanted to have a consistent operating model globally, independent of the country or operating unit where the work was delivered.

When the finance function came under the microscope, company leaders realized that, despite the value finance was delivering, it was doing so inefficiently. Specific problems included:

  • Duplication of effort. Redundant processes in different countries, regions and operating units led to inefficient use of both information and human resources.
  • Nonstandardized processes. Processes differed by country, region and operating unit, making it difficult to maintain consistency in the information reported.
  • Lack of prioritization. The finance organization delivered value, true – but it also performed many nonvalue-added tasks requested by the operating units that were increasing the cost of the finance organization.

How We Helped

The company is implementing a global finance operating model that would maintain finance’s responsiveness and strategic partnering capabilities while reducing the sources of wasted time and effort. With Deloitte‘s assistance, the company examined all of its financial processes and determined where and how each process should be performed:

  • Planning and analysis that was crucial to finance’s business partnering role remained local to the operating unit, country or region, preserving the ease of access and communication with the business needed for finance to work effectively as a business partner.
  • Standard planning and analysis processes, as well as tax, treasury and other financial processes, were designed as centers of excellence.
  • Basic transactional and core accounting processes, such as general ledger and accounts payable, were designed for a shared delivery model.

Solution

The company expects to reduce finance operating costs by 20 to 30 percent over the next three years while continuing to rely on finance as a value-added business partner.

 As used in this document, “Deloitte” means Deloitte & Touche LLP, Deloitte Consulting LLP, Deloitte Tax LLP and Deloitte Financial Advisory Services LLP, which are separate subsidiaries of Deloitte LLP. Please see  www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

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