Pfizer, Inc.
Credit-to-Cash & FSCM Initiative
Adam Nice Sr. Manager & Global Process Driver Credit-to-Cash Pfizer Global Financial Solutions
Pfizer, Inc. Credit-to-Cash & FSCM Initiative Agenda
Pfizer Inc. Overview Organization Credit-to-Cash Highlights Current Credit-to-Cash Systems Footprint ERP / FSCM Global Deployment
Global Gap Analysis Solution Design Module Assessment To-Date
Q&A
Pfizer, Inc. Credit-to-Cash & FSCM Initiative Pfizer, Inc. Overview
Worlds largest research-based pharmaceutical company Headquartered in New York, NY Founded in 1849 Total Global workforce of ~110K colleagues 2009 annual sales revenue of ~$50B
43.5% U.S. / 56.5% Rest of World
Select key products:
Lipitor (Biopharmaceuticals) Lyrica (Biopharmaceuticals) Revolution (Animal Health) Advil (Consumer) Centrum (Consumer)
Completed ~$68B acquisition of Wyeth in Q4, 2009
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Pfizer, Inc. Credit-to-Cash & FSCM Initiative Pfizer, Inc. Overview
Pfizer operating model
Nine Diverse Businesses Supported by Two Focused Research Organizations
Biopharmaceutical Businesses
Primary Care Specialty Care Oncology Established Products Emerging Markets
Diversified Businesses
Animal Health Capsugel
Consumer Healthcare
Nutrition
PharmaTherapeutics Research & Development BioTherapeutics Research & Development
Business Units Including: Development, Medical, Sales & Marketing
Manufacturing Enabling Functions
Customer Focused
Pfizer, Inc. Credit-to-Cash & FSCM Initiative Organization Credit-to-Cash Highlights
Global trade AR balance of ~$13B at end of Q4, 2010
U.S. domestic trade AR balance of ~$4B International (ex-U.S.) trade AR balance of ~$9B
Global past due as a % of total AR of ~16%
U.S. domestic past due as a % of total AR of ~1% International (ex-U.S.) past due as a % of total AR of ~23%
Pfizer utilizes a Global shared services network to support the following Credit-to-Cash functions:
Accounts Receivable
Cash Application AR Accounting
Collections Management
Strategic Collections Non-strategic Collections Deduction Management
Credit Risk Management
Credit Policy Portfolio Risk Assessment / Reporting Customer Risk Analysis
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Pfizer, Inc. Credit-to-Cash & FSCM Initiative Organization Credit-to-Cash Highlights
Three shared services operations offices supported by strategically placed BPO offices
Business Process Outsourcing (BPO)
Delhi, India Bucharest, Romania Dalian, China Chennai, India Bangalore, India Prague, Czech Republic
Pfizer's Business Process Outsourcing (BPO) partners are Genpact and Accenture. Pfizer's processes are supported from six strategic locations.
GFS Europe GFS Americas
Memphis, TN
Markets Supported: Canada Mexico North Latin America United State & Puerto Rico
Dublin, Ireland
Markets Supported: Austria Netherlands Belgium Norway Denmark Portugal France Spain Finland Sweden Germany Switzerland Ireland United Kingdom Italy
GFS Asia
Dalian, China
Markets Supported: Australia / New Zealand China Japan Singapore
Pfizer Location BPO Location 6 Shared Services Markets
Pfizer, Inc. Credit-to-Cash & FSCM Initiative Current Credit-to-Cash Systems Footprint
Pfizer U.S. operates with following Credit-to-Cash systems:
Revenue Cycle System (custom application)
Sales Order Management Warehouse Management Billing Credit Management
Revenue Accounting System (custom application)
Inventory Accounting Sales Reporting
POLARIS (custom application)
Accounts Receivable Sub-ledger Cash Application Accounting Interface to GL System
Claims Management System (custom application)
Biopharmaceutical Deduction and Claims Management
Various Data Warehouses for Reporting
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Pfizer, Inc. Credit-to-Cash & FSCM Initiative Current Credit-to-Cash Systems Footprint
24 Pfizer ex-U.S. Markets operate with following Credit-to-Cash systems:
Oracle e-Business Suite 11.5.10
Sales Order Management Inventory Accounting Billing Sales Reporting Credit Management Advanced Collections Accounts Receivable Sub-ledger Cash Application
Various Warehouse Management Systems Various Data Warehouses for Reporting
Remaining Markets operate with locally defined Credit-to-Cash systems footprints Global Oracle deployment discontinued in 2010
Pfizer, Inc. Credit-to-Cash & FSCM Initiative FSCM Global Deployment
Pfizer acquired a mature SAP footprint (ECC 6.0) with the 2009 Wyeth acquisition Strategic decision by Pfizer ERP Steering Committee in 2009 to deploy SAP to all Global Pfizer sites
53 total Markets ~98% of revenue
Multiple functions including:
Finance and Accounting Procurement (Direct)
Sales Order Management Distribution Supply Chain Management Plant MRP (Manufacturing Resource Planning) Quality and Regulatory Management Reporting
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Pfizer, Inc. Credit-to-Cash & FSCM Initiative FSCM Global Deployment
Global Gap Analysis (~3 months):
Legacy Wyeth ERP footprint vs. Pfizer systems footprint (requirements) analyzed in 2009 High level gaps identified Gaps analyzed for potential solutions utilizing delivered SAP products where possible Solutions assessed for cost / timing Primary gaps identified in legacy Wyeth SAP footprint for Credit-to-Cash:
Credit Management
Automated credit scoring (risk / credit line) Automated approvals management (workflow) Trend analysis and customer financial data repository
Collections
Collection strategy definition / automation Automated daily worklist generation / prioritization Centralized collections workbench / launch-pad
Deduction / Claims Management
Automated / manual case creation for applicable deductions / claims Automated case routing and data population End-to-end deduction / claim tracking and reporting
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Pfizer, Inc. Credit-to-Cash & FSCM Initiative FSCM Global Deployment
Credit-to-Cash Global Solution:
Implement SAP Financial Supply Chain Management (EhP 4)
Positive assessment of product with SAP and HighRadius Preserves SAP functionality Can meet Pfizer systems footprint / requirements will be customized where gaps exist Legacy Wyeth already leveraging SAP BillerDirect functionality (FSCM component)
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Pfizer, Inc. Credit-to-Cash & FSCM Initiative FSCM Global Deployment
Global Solution Design (~3-4 months):
Target: Global model that covers ~80% of all Market business processes Methodology:
Series of Global workshops to identify Global vs. local requirements Analysis / approval of scope for delivery of FSCM functionality over 15 month deployment period (Global Model Enhancement waves) Markets will receive enhanced functionality either via deployment projects or via retrofits (for sites deployed prior to release of full functionality)* Wave #1 (February, 2011):
Collections Management (full functionality) Dispute Management (~80% functionality) Credit Management (~60% functionality)
Wave #2:
Credit Management (full functionality)
Wave #3:
Dispute Management (full functionality)
TBD:
BillerDirect (full functionality)
*Exception: Credit Management
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Pfizer, Inc. Credit-to-Cash & FSCM Initiative FSCM Global Deployment
Module Assessment To-Date:
Collections Management:
Pros:
Robust out-of-the-box functionality Flexibility to adapt Collections approach based on changing Market / organizational conditions Integration with AR, Dispute Management, and Credit Management Ability to rebuild original invoices (from residuals) BI reporting
Cons:
Lack of correspondence functionality Business Partner concept adds additional master data automation would help master data management efficiencies
Dispute Management:
Pros:
Automated dispute case creation Case concept with ability to store full repository of information Case tracking and analysis BI reporting
Cons:
Manual routing (requires customization) Person Responsible / Processor / Coordinator process can be complicated / manual Lack of visibility in document flow (adds complexity to managing claims)
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Pfizer, Inc. Credit-to-Cash & FSCM Initiative FSCM Global Deployment
Module Assessment To-Date:
Credit Management:
Pros:
Credit scoring capabilities on internal and external data Workflow capabilities for alerts Open framework provides flexibility to customize to requirements Additional fields on Business Partner facilitate robust credit information Ability to import from multiple credit rating agencies BI reporting
Cons:
Global activation requires large-scale change management effort due to transition from SD Credit Management integration / functionality Open framework requires customization to meet requirements VKM1 (order block /release) replacement lacks functionality requires customization to filter by credit analyst, and to view the reason for order block Business Partner concept adds additional master data automation would help master data management efficiencies Less out-of-the box functionality than Dispute Management and Collections Management
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Pfizer, Inc. Credit-to-Cash & FSCM Initiative Q&A
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