The Role of Business Architecture in Mergers and Acquisitions
Deb Boykin, Director BPM March 21, 2012
Company Profile
• Pfizer is headquartered in New York City
• Diversified global health care portfolio includes; Human and Animal Biologic
Small Molecule Medicines and Vaccines
Nutritional and Consumer Products
At Pfizer, we apply science and global resources to improve health and well being at every stage of life
Agenda
• Introduction
• Establishing Process Governance
• Business Endorsement of the Global Model
• Global Model Enhancement to optimize the new organization
• Adoption and Implementation of the Global Model
“Mergers and acquisitions (M&As) are a major challenge for CIOs and IT, where conventional leadership and management techniques can often fall short. With M&As on the rise, and IT's integration role more critical than ever, it pays for CIOs to build their M&A integration capabilities using proven techniques.”
Gartner
Background
• 2009
• Pfizer Acquires Wyeth Pharmaceuticals
• SAP selected as Pfizer’s ERP tool of choice
• 2010
• Process Governance established
• Global Model Baseline endorsed
• 2011
• Successful Deployment of first Global Model Implementation
What is the ERP Global Model?
Documented business/program processes (ex: standard sales order, Process Governance)
System functionality, master data elements and global positions
Training courses Global test scripts Reports, custom and standard Global interfaces to approved
applications Performance Metrics
The Business Architecture Model consist of standard Business Processes supported by ERP functionality
Global Model Lifecycle
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Establish Governance
Endorse Global Model
Enhance Global Model
Implement and Adopt Global Model
Understand the current Global Model
Assess Process Synergies to implement best practice
Deploy Global Model
Mobilize Governance Team
Deliverable: Global Model Endorsement
Deliverable: Approved Global Model Enhancements
Deliverable: Health Check Reports, Operational KPIs, Business Value Realization
Deliverable: Engaged team responsible for the alignment of Strategy, Business Process and System Functionality
Establishing Process Governance
Establish Governance
Endorse Global Model
Enhance Global Model
Implement and Adopt Global Model
Process Owners
Invoice to Pay
Invoice to Cash
Tax and Treasury
T&E
R2R (2x)
Risk and Compliance
Finance
Commercial
Commercial
Logistics
Global External Supply
Global Packaging
Supply Planning
Engineering
Manufacturing
Lab Processes
Global Pack. Services Quality
Compliance Processes
Quality and Compliance
Regulatory –Artwork and Labeling
R&D
Finance Commercial Manufacturing Quality and Compliance R&D
Indirect Procurement
Indirect Procurement
Executive Sponsors
Process Drivers
Manufacturing
Business Process Governance
• What is business process governance?
Business Process Governance is a partnership between IT and the Business
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Business Process Governance
• Why is it important to Pfizer? • To enable business ownership of Pfizer business processes
Process driver is the single point of contact for in-scope business process decision-making globally
• To achieve control and balance of global business process standardization Objective: 85% standardization, 15% specific legal, regulatory or customer
required customization
• To ensure decisions are made in the best interest of Pfizer globally Best practice sharing across Pfizer through a network of expert process users
and SMEs
Business Process Governance provides corporations with the capability to optimize processes, systems and roles to align their strategic direction
Business Endorsement of the Global Model
Establish Governance
Endorse Global Model
Enhance Global Model
Implement and Adopt Global Model
Global Model Endorsement signifies understanding of the current Global Model and agreement on the process changes which are delivered based on approved enhancements.
Global Model Endorsement
Executive Sponsors and Process Owners Endorse Global Model Maps at the Summary Level
Process Component
Each process component is governed by a single Process Driver
Executive Sponsors and Process Owners endorse at the Summary Level (“What” Map)
The first level of detail is the “What” model which depicts the Process component lifecycle
Process Drivers Endorse at the Detail Level (“How” Map)
The second level of detail is a “HOW” process model that depicts the process steps and how they are executed in the business
• Face to Face Meetings co-led by Process Driver and Solution Owner
• “ I have reviewed the GME summarization document and endorse that the attached list of Global Model Enhancements are necessary to be added to the Global Model.”
Executive Sponsor, Process Owner, Process Driver Endorsement Document
Written endorsement drives ownership
ERP Global Model Endorsement
I endorse the ERP Global Model Baseline maps which are relevant to the Process Components listed below:
Process Component Name Endorsed 1 Agenda Topic: Demand Planning
• Establish Demand Requirements (P1.1) 2 Agenda Topic: Supply Planning and Replenishment
• Balance Demand and Supply (P1.3) • Plan Source (External - P2.4) • Plan Distribution (DRP) (P4.1 - P4.4)
Business Process Owner Endorsement: This endorsement reflects the baseline maps effective on the date of my signature below. _________________________________________ Name _________________________________________ Title _________________________________________ Signature _________________________________________ Date
Global Model Enhancement to optimize the new organization.
Establish Governance
Endorse Global Model
Enhance Global Model
Implement and Adopt Global Model
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Global Model Enhancement is... ... leveraging the existing global model
The existing global model is deployed and has proven its value Enhancements are those required to address critical business requirements
... focused on global requirements for the good of the company As opposed to what is good for a particular location Efficiencies for the global network may not necessarily translate to what is best for an
individual location
... expected that the global model will meet 85% of the requirements Additional local, regulatory, statutory, and tax requirements anticipated during
deployment
Choose the best practices from each company to optimize process value across the new organization
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Global Model Enhancement is not...
... Business Process Reengineering Existing business processes will be leveraged We are not starting from a blank sheet of paper
... an open forum for new business requirements The immediate focus is on deploying the solution to Pfizer entities New requests for functionality will be incorporated via the business process
governance Once the solution is implemented, new functionality will be incorporated through
continuous improvement and "business as usual" Enhancement Requests
Stay focused on current practices to deliver quickly
Analysis of Existing Models
•Scenario 1: Use Company A’s Process •Scenario 2: Use Company B’s Process •Scenario 3: Hybrid A + B Process
People Process Performance Systems
- Assess Strengths and Weaknesses - Determine Cost, Revenue, Risk
- Assess Strengths and Weaknesses - Determine Cost, Revenue, Risk
- Assess Strengths and Weaknesses - Determine Cost, Revenue, Risk
Leverage the strength of both companies to deliver the full potential of the merger/acquisition
Implementation and Adoption
Establish Governance
Endorse Global Model
Enhance Global Model
Implement and Adopt Global Model
Deploy the Global Model to New Sites.
Sustain the Global Model at Existing Sites.
Improve the Global Model across the Enterprise.
System deployment and Process Understanding
Business Adoption and Process Monitoring
Continuous Improvement and Process Optimization.
Driving Process Standardization Global Visibility
Improvement against Scorecard Metrics
Business Value Realization
The Needs Approach The Results
M&A has 3 components. It begins with the initial Deployment, but Sustaining and Improving are on-going architecture initiatives that must be managed through change control.
Business Adoption and Process Monitoring
Business Architecture provides the framework necessary to perform Process Monitoring activities that allow Process Focused Communities to monitor Solution performance as intended.
Identify Health Check Metrics and protocol for auditing and issue escalation process for CoP.
Establish Process Focused Communities with standard approach to process monitoring
Identify the key Health Check Metrics for monitoring ERP Go Lives based on deployed processes
Ensure operational reporting aligns to Business Value Realization
Design and Monitor the ER Management Process for Deployments.
Summary
• Establish clear expectations for comparing organizations and processes
• Determine opportunities for realizing synergies in regards to roles, systems, activities, etc
• Ensure that the best processes are leveraged in the new organization
• Determine the effort required to standardize processes across the new organization.
Business Architecture is vital for companies wanting to build their M&A integration capabilities
Business Architecture’s Role in M&A
Questions?
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