Deloitte Shared

Services, GBS &

BPO Conference

Managing a Big

Bang Transition to

GBS: How to Create

a Recipe for Success

Berlin, Germany

Stig Christian Rutving, Lundbeck

22 – 23 September 2015

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MANAGING A BIG BANG TRANSITION TO GBS - HOW TO CREATE A RECIPE FOR SUCCESS September 2015

Lundbeck Mission

We want to improve the quality of life

of people suffering from psychiatric

and neurological disorders

700 million people worldwide live with brain diseases

Lundbeck in brief

We are a specialized pharmaceutical company engaged with developing and commercializing

new and innovative treatments for brain diseases

1915 6,000 2nd 13.5bn founded by

Hans Lundbeck in Denmark

employees worldwide

largest pharmaceutical company in Scandinavia

and number 42 in the world

DKK revenue in 2014 (EUR

1.8bn and USD 2.0bn)

LUNDBECK BUSINESS SERVICE CENTER 1 YEAR AFTER GO-LIVE

Multifunctional center started in

highly autonomous organization

• Moving fast took us far

• Build the right structure

• Start with org. maturity

New BSC model applied to Affiliates operating with high level of localization

Late starter but fast mover

– we skipped evolution to kick start our journey

BSC Head

Finance Procurement IT Service Desk

HR Operations Process

Excellence

BSC is started in a multifunctional European scope

130 FTE

SCOPE

Changing market conditions in Europe, trigger focus to drive down costs

One culture

One operating model

One user experience

Spring14 Jul14 Oct14 Jan15 May15 Sep15 Jan/May16

HQ

Pilot

AU

AU

W2

AU

W3

AU

W4

AU

W5

Prepare &

Onboard

30

Affiliates

IT Platform

Business Support

Process & Structure

Business Partners

BSC program is core in Lundbeck’s

Global Support Platform strategy

Best practice standard

Drive needed business decisions

Standardization & process excellence

Strong control & compliance

Cost effective support structure

Reduce dependency on key employees

Transparency & ease of use

Automation & system agility

BSC

Program

focus

We have achieved our success criteria

If you build trust – you can move fast

Build the needed trust!

• Prepare & guide the journey

• Build on the first movers

• “Cook book”

Reference go-live

Share experiences

– show that it

works

Detailed

planning for

migration

Gap & Business

Impact

Assessment

workshop

Ready for

migration

Roadshow

Workshops

Lync

meetings

Hyper-care/

stabilisation

We have done many things right

Key drivers behind success could be…

Go standard

– but listen to requirements

Secure management support

– set expectations right, something will fail

Build the needed trust!

• Prepare & guide the journey

• Build on the first movers

• “Cook book”

Show that it works

– use pilots

Strong project team

– key roles essential

Stay resilient

– it will be hard

STATUS 1 YEAR POST GO-LIVE This is what needed to change…

We started out with enabling projects in each function

– but quickly realized that one program was needed

System Outsourcing

Implementation Partner

Finance

Procurement

HR

One

program

We achieved faster results through clear focus

– than by speed alone

HQ live

July14

Pilot countries live

Oct14

Country wave 2

Jan15 • Started with quarterly waves

• Changed to bigger 4 month intervals

• Now 6 months intervals considered!

3 months

BSC staff members hold

many simultaneous roles

Projects

Migration

Stabilization

Operation BSC A2R

Operational team

Stabilization

Operation

Efficiency

improved by

focusing team

staff on

migration or

operation

BSC A2R Migration team

Projects

Migration

Cross functional processes & organizational maturity

– main challenges when kick starting the journey

Quality of Service

Operational Efficiency

Org. maturity

Source 2

Pay

Record 2

Report

Hire 2

Retire

IT Service

Desk

!

! !

! ! !

• Cross functional lack of

ownership & missing action

• Ambition vs license to operate

• Knowledge management

• HQ not ready to follow standard process

• Local mgt. paradigm challenged by global standards

Payed on time

Original organization was not effective and did not

support the intention to build “One BSC”

One culture

One operating model

One user experience

Functional Mgr. (Finance)

Functional Process owner

Functional

projects

BS

C

Fin

an

ce

Functio

n

Head of BSC

Functional Mgr. (Sourcing)

Functional Process owner

Functional

projects

BS

C

Sourc

ing

Functio

n

• Head of BSC out of operation

• Cross functional alignment weak

HQ

BSC

From functional focus to process orientation

and clear accountability & ownership

Go live 2014 One year after – change to ensure:

Head of GBS

Globalization

Program

S2P

Head of BSC

S2P

Global Process Owner

S2P

Head of Finance

Process owner

Head of HR

Process owner

Head of Procurement

Process owner

Fin

an

ce

Pro

cure

-

ment

HR

IT

Head of BSC

Finance

projects Procurement

projects

HR

projects

• E-2-E process ownership and needed actions

• Setting aligned expectations to stakeholders

• Stronger handover - Process/Project/Operation

HQ

BSC

HQ BSC

Many S2P pains from high sourcing ambitions

– leading to issues in meeting basic requirements

Focus on upstream value ambition, taking focus from basic operation

Ambitions lead to overselling sourcing roles – causing staff turnover

Users do not easily understand PO process and system

This has resulted in

-Huge effort on escalation handling

-Lost training efforts, from staff turnover

-Low service levels & long handling time

-Resource gaps leading to backlog

Focus now on license to operate -Hire the needed profiles

-Simplify process and use cases

-Improve knowledge management

-Constant attack on any backlogs

-High validation of process performance

Missing unhappy-flow documentation

and insufficient focus on maturing organization

step step step step step step step step step

Now

Source 2 Pay

process needs

stronger training &

documentation

We need to reduce

the workarounds

Experience Documentation Workaround

Control

Assistant

Globalization challenges local management values

– standard process does not match local paradigm

Trust

Self driven step step step

CoE Management Paradigm Local Management Paradigm

Accountable

Consequence

Responsible

Corrections

Great stuff - for fast success

Country coordinator – one focal point

Clear benefit drivers – what’s in it for..

Let BSC take responsibility early on

Build one team across processes,

projects & operation

Process excellence results achieved fast

Learnings – requiring changes

Keep it simple, or it will not help you

- eg. governance model, business case

Make all benefits tangible

- prove your case or risk a full stop

One model does not suit all

- eg. documentation & migration model

Other valuable learnings

WE HAVE SUCCEEDED ON SCOPE

WITH NO MAJOR BUSINESS

DISRUPTIONS

– AND HAVE BEEN ASKED TO

MOVE FORWARD

The issues addressed in S2P and

organisational maturity do not stop

us from entering new scope

New

functional

depth

New

geographic

reach

BSC is needed to support new business requirements

in Lundbeck – we are ready to move on

Major restructuring to regain profitability

and ensure value creation Valby, Denmark, 2015-08-19 07:42 CEST (GLOBE NEWSWIRE) --

Lundbeck is initiating a restructuring program which will reduce the total

cost base by approximately EUR 400mn - with full effect in 2017

Global administration and support:

A new reduced global support structure at

headquarters, further reduction of support

functions in affiliates, and investigating the

possibility of expanding the geographical reach of

the Business Service Center in Poland.

Business Partner

This will require something new

• Global Business Partner standard

• Global BSC organization

• Service catalogue enhancement

• Re-think collaboration model

Take away

Moving fast took us far It worked for us to skip evolution and

make a controlled jump into GBS

Build the right structure We would have benefitted from right

structures and the needed cross functional

responsibilities from beginning

Start with org. maturity If what you really want is a Global platform

with Global standards and benefits:

– take the maturity battles up front and drive

needed adjustment through implementation

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23 Deloitte Shared Services, GBS & BPO Conference 2015