Hear how Lundbeck uses Ariba Solutions

1. Customer Success Story: Lundbeck
Maria Tirsgaard, Business and IT Project Manager, Lundbeck
17 November, 2015 - Ariba Commerce Summit, Stockholm Public

2. HOW LUNDBECK IMPLEMENTED ARIBA AS A
PART OF A BROADER TRANSFORMATION
November 2015

3. Agenda
• LUNDBECK IN BRIEF
• GROUP SOURCING IN BRIEF
• THE BUSINESS TRANSFORMATION – ESTABLISHMENT OF A SHARED SERVICE CENTER IN KRAKOW (BSC)
• THE ARIBA IMPLEMENTATION AS A PART OF THE BSC PROGRAMME
• LESSONS LEARNED
• NEXT STEPS

4. LUNDBECK IN BRIEF
4

5. WHO WE ARE
We are a specialized pharmaceutical company
engaged in discovering, developing and commercializing
new and innovative treatments for brain diseases
1915 5,500 2nd70%13.5bn
founded by
Hans Lundbeck
in Denmark
employees
worldwide
largest pharmaceutical
company in Scandinavia
and number 42 in the world
owned by the
Lundbeck
Foundation
DKK core revenue
in 2014
(EUR 1.8bn and
USD 2.4bn)

6. PROGRESS IN MIND
Improved treatment and a better life for people living with brain disease
More than 700 million people are affected by brain
disease worldwide – this is equal to 13% of the global
disease burden.
Lundbeck wants to address brain disease as a
global health problem and calls for a broader
global acceptance of the massive economic and
societal burden that brain disease represents.
Progress in Mind is Lundbeck’s dedication to
addressing the global burden of brain disease. Every
day, we strive for improved medical treatments and
continuous focus on the unmet needs of patients.
Learn more on www.lundbeck.com/global/about-us/progress-in-mind

7. GLOBAL PRESENCE
Headquarters Research and/or development facilities Production facilities Sales

8. GROUP SOURCING
8

9. GROUP SOURCING IN BRIEF
9
Key KPIs

10. GROUP SOURCING – DELIVERING VALUE GLOBALLY
10
Category Management in HQ
Structure & processes
Spend management
Mandate & compliance
Stakeholder buy-in
Global mandate & structure
Sourcing functions in US & China
Outsourcing of operational & tactical
procurement to Krakow
Ariba suite implemented
Global category management
Visualizing value
Supplier enabled innovation
Process automation
Operationalizing strategy
NOT FOR PROMOTIONAL USE

11. THE BSC PROGRAMME
11
ESTABLISHMENT OF A BUSINESS SHARED
SERVICE CENTRE IN KRAKOW

12. 2013  The course of Lundbecks journey
12
The ‘New’ Lundbeck
– the building blocks for growth
CNS FOCUS
Global growth platform
Multiple product company
Executing on new product
launches
Drive growth of diversified
portfolio
Deliver on late-stage pipeline
‘European’ company
‘One product’ company
The ‘Old’ Lundbeck

13. 13
Fit for the Future initiative – June 2013
Simplified
commercial
structure
1
Reduce
complexity in
supply chain
Reduce complexity and further improve efficiency in Supply Operations3
Execute on R&D
operating model Improve efficiency in R&D operating model4
Best-in-class
business services
2 Deliver best-in-class efficient and effective business services
Broaden structured procurement activities to reduce external spend
Broaden
structured
procurement
5
Revisit spending on less critical activities
Revisit less
critical activities
6
Improve ability to launch new products and build global growth platform

14. Goals for the set-up of Best in Class Business
Services
14
A scalable and flexible platform providing Lundbeck with the agility to
quickly adapt to changing market conditions
Competence centres that can drive process optimization and reduce
complexity through standardisation and alignment of Lundbecks service
levels
An efficient operating model with cost savings that enable us to free up
resources to invest in new products and growth markets

15. BSC Project organisation
15
10 Outsourcing IT
9 Site & Facilities
8 BSC Governance
7 Learning
6 Organisational change management
5 Communication
4 Enabling projects
3 Outsourcing non-IT
2 Process Migration
1 Process Design and Documentation
PMO
Finance
HR
IT
Sourcing

16. Roadmap (October 2013)
16
Resource req’s vs internal capacity have not
been evaluated. May need higher consultancy
cost to keep this speed.

17. THE ARIBA IMPLEMENTATION
17

18. Why a new platform?
18
Supporting the “Fit for the Future” initiatives
European Business Service Centre
IT support of operational and tactical procurement/sourcing processes was
seen as a key enabler and needed to be in place.
Current eProcurement solution, SAP SRM 5.0, was running out of
maintenance Primo 2015
Broaden Structured Sourcing
Need for an appropriate tool to monitor the Sourcing Project portfolio, enable
Savings Target and keep overview of Contracts
Current eSourcing solution, SAP Sourcing, was not fully satisfying and
Contract Management not yet implemented

19. Sourcing Procurement Landscape 2013
- and scope!

20. BSC program Roadmap (October 2013)
20
Sourcing
Process begin!
S2P project
begin!
S2P Go Live!

21. Business Landscape 2014

22. Implementation plan - Ariba
– following the BSC roll-out plan
Implementation of HQ and
Wave 1 roll-out (3 AU’s)
Ariba & Lundbeck
July 1st 2014 Oct 1st 2014Feb 1st 2014
Implementation of Wave 2-4 roll-out (21 AU’s)
Lundbeck
Sept 1st 2015Oct 1st 2014

23. Users and the support organization
Center of ExcellenceUpstream Downstream Ariba Support Krakow

24. LESSONS LEARNED
24

25. Aggressive timelines 
Improvement Project established to solve issues and improve functionality
25

26. Lessons learned
26
Ariba together with BSC migration and other new IT systems in an compressed timeframe 
issues expected
 End users can’t tell what is system and what is process
 More time required to stabilize the process before moving to the next wave
E2E flow requires resources with high skills (“users behind the scene”)
Ariba and Vendor Invoice Management provided at the same time
Employee turn around high in Krakow  Documentation needs to be in place in a much higher degree
than before
Cloud VS “On premise”: Another way of working and implementing
“First mover” issues
Integration with SAP ECC was not yet provided as CI  ZBAPI’s that we had to develop ourselves.
Danish suppliers used to EDI as it has been required by the government – however not
not on the Ariba Network yet  more work to convince and enable suppliers on AN

27. NEXT STEPS
27

28. 28
August 2016:
New restructuring
programme
 New organization
Group Business
Services

29. IT Platform
Business
Support
Process & Structure
Business
Partners
Group Business Services drive key blocks 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
GBS
Mandate

30. Next steps
30
BSC program - Feasibility study on RoW roadmap
Roll-out S2P to China
Ariba - Leveraging on what we have implemented
– our benefit journey really only starts now!
Help stabilize P2P process in the Business Service Centre – E.G.
Increase # of eInvoices
Increase # of catalogue items and improve data quality
Increase # of eSourcing events to exploit savings potential
Increase use of Preferred Suppliers and improve Contract Compliance
Support of Supplier Relationship Management
Implement more advanced use of Contract Management Module