Life Sciences

Case Study: SAP S/4HANA Finance Implementation for a Global Pharmaceutical Company

 Overview

Krisp Consulting was engaged by a Global Pharmaceutical Company to perform a comprehensive assessment and provide recommendations for the implementation of SAP S/4HANA and SAP Finance Systems. The primary objective was to streamline the company's finance operations by creating a unified finance system while leveraging existing operational processes and overcoming the limitations of their current landscape.

Business Challenges

The company faced several critical challenges with their existing finance and operational systems:

• Fragmented Systems: Multiple finance systems were in place, each connected to various third-party systems, leading to inefficiencies and inconsistencies.
• Data Silos: Disparate systems for logistics, manufacturing, and distribution resulted in data silos, making it difficult to achieve a consolidated view of financial data.
• Complex Integration: The use of multiple third-party solutions for invoice management, banking operations, credit management, etc., complicated the integration landscape.
• Legacy Systems: A reliance on legacy systems that had reached their end-of-life added to the challenges, necessitating a phased approach to system sunset.

Recommendations

Krisp Consulting recommended a strategic, phased approach to migrating to SAP S/4HANA using the Bluefield methodology. This approach was chosen to expedite the transition while minimizing business disruption. Key recommendations included:

• Single Finance System: Establish a single finance system that integrates seamlessly with logistics, manufacturing, and distribution systems until the legacy systems are sunsetted.
• Centralized Finance Operations: Implement centralized finance operations to bring a 'single source of truth' through one universal journal, ensuring consistent and accurate financial reporting.
• Leverage Proven Processes: Utilize existing, proven operational processes while enhancing them with new system functionalities like AVL (Accounting View of Logistics Documents) for sales.
• Incremental Legacy System Sunset: Adopt an incremental approach to gradually phase out legacy systems, ensuring continuity and minimizing risks.
• Avoid Multiple Third-Party Connections: Limit the number of third-party systems interfacing with finance operations to reduce complexity and improve integration.

Implementation Strategy

The recommended Bluefield approach involved the following steps:

• ECC System Copy and Upgrade: Copy the existing ECC system and upgrade to SAP S/4HANA.
• Central Finance Activation: Activate Central Finance to enable centralized reporting and real-time data processing.
• Data Migration:
  • Migrate finance information from Non-SAP systems to SAP S/4HANA, including Accounts Payable (AP), Accounts Receivable (AR), General Ledger (GL), Banking, Purchase Orders (POs), and Sales Orders.
  • Migrate finance information from SAP-ECC systems to SAP S/4HANA.

Benefits

By implementing the recommended strategy, the Global Pharmaceutical Company is expected to achieve:

• Enhanced Financial Visibility: A unified view of financial data across all operations, leading to improved decision-making and strategic planning.
• Operational Efficiency: Streamlined processes and reduced reliance on third-party systems, resulting in cost savings and increased efficiency.
• Scalability and Flexibility: A future-ready finance system that supports growth and adapts to evolving business needs.
• Risk Mitigation: A phased implementation minimizes the risks associated with system transitions, ensuring business continuity.

Conclusion

Krisp Consulting's assessment and recommendations provided a roadmap for the Global Pharmaceutical Company to transform its finance operations through the successful implementation of SAP S/4HANA. This strategic initiative is set to drive operational excellence, enhance financial transparency, and position the company for future growth.