SAP Customer Success Story | Life Sciences | Roche

Roche: Streamlining Financial Operations with Treasury Applications from SAP

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SAP Customer Success Story | Life Sciences | Roche

Executive overview

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Smooth, streamlined financial processes are important to any large business. But when a company’s operations span multiple geographical borders, include diverse currencies, and must comply with complex regulations, then hassle-free transactions are paramount. Leveraging the SAP® Treasury and Risk Management and SAP In-House Cash applications, world-leading Swiss life sciences player Roche has implemented a dedicated internal bank – and simplified all aspects of its financial transactions.

CompanyRoche

Industry Life sciences

Products and ServicesA broad range of pharmaceuticals, innovative medical products, and diagnostics technology, including in vitro diagnostics and personalized healthcare products

Web Sitewww.roche.com

SAP® SolutionsSAP® Treasury and Risk Management, SAP Cash and Liquidity Management, and SAP In-House Cash applications

Executive overview

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Why SAP

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SAP Customer Success Story | Life Sciences | Roche

Medical excellence

Headquartered in Basel, Switzerland, Roche is a leader in research-focused healthcare with combined strengths in pharmaceuticals and diagnostics. Roche is the world’s largest biotech company with truly differ-entiated medicines in oncology, virology, inflammation, metabolism, and CNS. Roche is also the world leader in in-vitro diagnostics, tissue-based cancer diagnos-tics, and a pioneer in diabetes management. Roche’s personalized healthcare strategy aims at providing medicines and diagnostic tools that enable tangible improvements in the health, quality of life, and survival of patients.

In 2011 Roche had over 80,000 employees world-wide and invested over SFr 8 billion in R&D. The group

posted sales of SFr 42.5 billion. Genentech, in the United States, is a wholly owned member of the Roche Group. Roche has a majority stake in Chugai Pharmaceutical, Japan.

150Number of countries

where Roche has operations

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SAP Customer Success Story | Life Sciences | Roche

Centralized treasury management

To support smooth operations around the world, Roche relies on a strong software foundation – and excellent collaboration between its IT department and business units. “For over 10 years now, our landscape has been largely based on software from SAP,” explains Alexandra Greiner, head of treasury systems at Roche. “In 2004 we developed a new vision for our treasury operations and opted to introduce an in-house banking solution.” The aim was to replace a large number of external bank-ing services with internal processes. “This would enable us to deliver more targeted, dedicated services to our organizations around the world, cut costs, reduce com-plexity, and reap the benefits of synergy,” says Martin Schlageter, head of treasury operations at Roche.

The corporate goals behind this move were to establish a central provider of treasury and payment services and to consolidate international treasury management in Basel. By significantly reducing the number of exter-nal banking services, Roche would not only save costs but also have greater visibility into its financial activities around the world.

To this end, company decision makers opted to leverage the SAP Treasury and Risk Management and SAP In-House Cash applications. Previously, Roche had relied on treasury applications from SAP as report-ing tools. “But after defining our requirements, we real-ized that we could use these applications much more intensively,” says Greiner.

“The close day-to-day working relationship between our IT and our business is a key success factor. Technology has to go hand in hand with real-world operational needs. You need to strike an ideal balance between the two.”Martin Schlageter, Head of Treasury Operations, Roche

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SAP Customer Success Story | Life Sciences | Roche

Simplicity and synergy

Since Roche had already deployed software from SAP to support its core business processes, building its in-house bank on the same technology backbone was a logical next step. As Greiner explains, “There is a strong belief that, to create a successful internal corporate bank, it is beneficial to go with the same vendor that supplies your ERP system. Because we deploy the SAP ERP application, it made sense to introduce a treasury management solution from SAP too. This would min-imize migration effort and help secure user acceptance.”

Roche has a well-established team of internal IT experts who have the skills and experience to perform com-plex integrations in-house. In addition, users around the world were already familiar with the SAP processes. “Day-to-day operations for our subsidiaries did not change as a result of this project,” highlights Greiner, “which was certainly an advantage.”

“SAP Treasury and Risk Management and SAP In-House Cash support the centralization of banking services and have helped us achieve our goal of establishing a fully functional in-house bank.”Alexandra Greiner, Head of Treasury Systems, Roche

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SAP Customer Success Story | Life Sciences | Roche

Reliable support for banking processes

SAP Treasury and Risk Management gives treasury departments total visibility into cash flow, liquidity, and risk management. At Roche, the SAP application deliv-ers rapid insight into requirements across the entire business, allowing executives to make informed, accu-rate decisions. The application provides a consolidated, bird’s-eye view of transactions and supports the stan-dardization of all treasury-related processes.

SAP In-House Cash supports the centralized manage-ment of cash and payment processes for all Roche sites and subsidiaries around the world. The applica-tion helps the healthcare player handle intercompany payments and loans, manage assets and liabilities, and plan liquidity. “SAP In-House Cash forms the basis of our internal banking facility and is the key module supporting our in-house financial processes,” explains

Greiner. “We no longer have isolated local banking solutions and a large number of external financial pro-viders; we can now manage the vast majority of our transactions using this application.”

In addition, SAP In-House Cash supports the auto-mation and standardization of all banking processes at Roche, boosting operational efficiency. The software immediately updates cash balances, helping ensure accurate, timely reporting. The SAP Treasury and Risk Management and SAP In-House Cash applications serve 300 users and 240 legal entities, handling 45 curren-cies and generating 400 bank statements every day.

Treasury applications from SAP allow Roche to cen-trally connect to the global SWIFT (Society for World-wide Interbank Financial Telecommunication) network.

“SAP In-House Cash supports the centralization of cash, helping us better manage our treasury portfolio. SAP Treasury and Risk Management streamlines our treasury processes and helps identify and mitigate risk.”Martin Schlageter, Head of Treasury Operations, Roche

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SAP Customer Success Story | Life Sciences | Roche

Fully aligned processes

Thanks to treasury applications from SAP, Roche ben-efits from fully aligned intercompany financial pro-cesses. “The level of automation and standardization has improved significantly. And we have greater trans-parency into banking and payment processes,” says Schlageter.

By centralizing cash management, Roche was able to halve its number of external bank accounts, sub-stantially cutting costs and complexity. In addition, the support and maintenance effort has decreased as the company has eliminated local stand-alone cash and liquidity management tools.

“Some 1.4 billion intercompany invoices pass through the central banking component each year. With the new tools, we can process these much faster than in the past, freeing up resources,” says Schlageter.

Since cash is pooled centrally, Roche has significantly optimized its short-term liquidity. “Most of our short-term financial assets can be shifted easily during any day. In these troubled times, this is definitely an advan-tage,” remarks Schlageter.

“Everyone benefits from the new setup – IT, the users, and the business as a whole,” says Greiner. Roche has picked up a series of accolades in recognition of its trea-sury successes, including the 2008 Roche “Innovation in Finance” Gold Award and the “Best Cash Solution Bank in Asia” award from FinanceAsia. In 2011 Roche was highly commended in the working capital man-agement/financial supply chain category of Treasury Today’s “Adam Smith” awards.

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An ongoing success

Roche’s successful treasury transformation is an ongo-ing mission that will continue to grow and develop going forward. “The initial road map is complete, and we have all sites and all modules hooked up. But it doesn’t stop there,” explains Schlageter. “We are constantly looking at ways to improve and enhance our landscape. We’ve recently implemented ‘payment factory’ across our international sites and are looking at new services such as payment collection functionality too.”

Roche collaborates closely with treasury development at SAP and has an important role in the evaluation of new solutions. “We are certainly eager to continue this strong partnership and play our part in shaping the treasury applications and components of the future,” says Schlageter.

“We have strategic plans to replace our iDoc format with XML, and we are looking forward to further enhancing our applications and business processes.” ”Alexandra Greiner, Head of Treasury Systems, Roche

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