Global process standardization: Keys to success and lessons learned from Eli Lilly
Blog26.11.2012 Comments (0)
Finance shared services
At our recent Summit for Leaders in Finance Shared Services, Kim Rankel, Director of Procure to Pay at Eli Lilly shared the impressive story of how Eli Lilly standardized their procure-to-pay process globally to contribute towards saving $1bn in operational costs in just over one year.
Kim explained that to begin with, Eli Lilly, a global pharmaceutical company, were in a position where they had to cut costs. From the corporate point of view, there were some patent expirations on the horizon that would impact their revenue stream and they needed achieve savings from back office functions. To do so they aimed to streamline and redesign corporate and general and administrative organizations (IT, HR, Finance/ Procurement & Knowledge Service).
They moved to a shared service model in order to harness the benefits including: Lower costs due to improved automation and a reduced headcount; leveraged technology and infrastructure, and improved decision making through shared management practices and a standardized data environment.
Regarding their purchase to pay transformation, here are some of their keys to success:
Prepare for the transition. The design team spent about a year and a half in preparation and developed what the global design would look like. They developed standard process, standard operating procedures, job aids and staffing models. The preparation involved cleaning up the master data and moving onto SAP. To implement the new processes in each local site, they had live roadshows where they would work through each process design, go through each process flow and give the local teams the information they needed to do to get ready for this. Kim said that although the process design phase was painful and time consuming, it paid huge dividends in the long run.
Use local leaders. Eli Lilly used local transition leaders to implement the processes on site, consultants were used to help the transition, but it was important they played a supporting role, and that the projects were owned locally. The local transition leaders established local ownership, ensured local input on issues, enabled learning of the new processes, provided insight to local communication needs, and provided leadership opportunities for key talent.
Assign a global process owner. To effectively standardize processes globally, you need a global process owner. At Eli Lilly, the process owner didn’t actually have people reporting directly into him, but rather was a respected individual who would help them enforce process, answer questions and solve problems.
Kim also shared some of their lessons learned:
- Don’t move a broken process into the SSC – fix it first! Process standardization can take a huge amount of planning, but the work will pay off in the savings you can achieve.
- Build the global processes early on. Be assertive from the beginning and build a timeline to deliver training materials impacted and develop documentation governance process early. Not having governance process for change control will make keeping to the standards more difficult.
- Ensure SLAs are measurable both pre and post implementation. A lack of baseline metrics will make it difficult to identify gaps or improvements
- Have teams assigned to communications and change management. They need to be dedicated, understand audience and be engaged pre and post live.
- Ensure robust retention plans in place to be able to retain talent and recruit key talent
Are you looking to harness savings from process standardization? Learn more at our forthcoming Summit for Leaders in Shared Services next March in London.