Just four years after its January 2013 spinoff from Abbott Laboratories, specialty biopharmaceutical company AbbVie ranked 111th on the Fortune 500 List with nearly $26 billion in revenue, attributable in part to the global distribution of several top-selling pharmaceuticals — including Humira, which is used to treat rheumatoid arthritis and Crohn’s disease, among other conditions.
At the time of the separation, AbbVie, which is headquartered in Chicago, Illinois, inherited a host of disparate systems used to run mission-critical processes in more than 100 worldwide locations. While Abbott had started moving some processes off legacy systems onto SAP ERP, the SAP rollout was not exclusive to its biopharmaceutical division, so AbbVie couldn’t just continue with the implementation. Instead, the new company had a decision to make: clone the legacy landscape, or invest in a greenfield platform to run processes across all global affiliates and manufacturing locations. AbbVie chose the latter. Another challenge involved having to establish an infrastructure in a little more than two years as stipulated by the transition services agreement (TSA) with Abbott.
“We used the separation as an opportunity to put together a plan to quickly deploy a single instance of SAP ERP for all of the affiliates and manufacturing facilities that AbbVie was doing business in,” says Vikram Bhonagiri, Vice President of Enterprise Applications at AbbVie. “Abbott’s SAP template was used as the baseline; the team then made it more relevant to AbbVie and deployed it across the globe.”
Beginning in August 2013, AbbVie rolled out SAP ERP to 110 affiliates and 10 manufacturing sites in 18 months to satisfy the TSA and standardize global processes across this SAP user base. The success of this project was due largely to an approach that consisted of standardizing end-to-end processes on an SAP template, allowing for customizations only for country-specific items that were identified in advance by teams compiling local implementation guides, according to Bhonagiri. “Many of the implementation partners we spoke with in the beginning said that it would not be possible to complete a project of this scale in the time frame we had,” he says. “However, this methodology that we developed was the key to our success.”
Going Global
AbbVie developed a global SAP template by meeting with business process teams to hammer out standard definitions for end-to-end processes for everything from financials to supply chain management, including record-to-report, procure-to-pay, order-to-cash, and warehouse management processes. Armed with this template, AbbVie expanded its use on a global scale by extending the functionality for multiple currencies and languages and updating it on a country-by-country basis depending on local regulations or legal requirements.
Continuing with this approach led to a stronger global template,” says Bhonagiri. “Every time an affiliate asked for a customization, we reviewed it against the list of local legal requirements we had collected. If the request was beyond local legal requirements, we determined if this customization was required by other countries or was a one-off, and we pushed back on the one-off requests. After testing and confirming with several affiliates, the template met the requirements of most countries and the need for future customization was minimal.”
We now have a set of key metrics that are measured at the end of every month — for example, how long it takes to create new customers, vendor payments, payment terms, or order fulfillments. Because we’re on a single global instance, we can use dashboards to look at every country, measure results, find the root cause, and take corrective action more easily.
— Vikram Bhonagiri, Vice President of Enterprise Applications, AbbVie
During the phased deployment, AbbVie tested the effectiveness of its global template and enhanced visibility into the implementation progress by capturing metrics around adoption; this was achieved following the “4A” model, which stands for adopt, adapt, add, and abstain. The company compared the percentages of those metrics from country to country, and used any large discrepancies as a cause for follow-up actions.
“We published those metrics to AbbVie’s business unit leaders,” says Bhonagiri. “If we saw Austria had adopted 82% of the template and France 70%, for instance, business support could investigate to see if there was a process that needed to be changed in France, for example. This was the key to deploying the entire global instance of SAP ERP in 18 months.”
Staying True to the Template
Data migration was a challenge for AbbVie in keeping pace with an accelerated deployment timeline because the project team was tasked with adhering to the global template despite having to migrate data from different applications and stand-alone systems and meld it to an SAP data structure.
“We needed a mechanism to extract the data from the legacy applications and migrate it quickly to our SAP instance,” Bhonagiri says. “For each of those stand-alone instances, our approach was to take the raw data, house it in a secured data warehouse, and then identify the data cleansing requirements and any missing fields.”
In parallel with this data cleansing exercise, the project team trained business users on SAP-specific data fields, how the fields were used, and how they changed processes from what they were accustomed to. “We would try to get data from the business and use it in a data mapping template,” Bhonagiri says. “We’d do three or four dry runs of this data migration — where we would load it into various test environments, have the business verify it was accurate, and then finally load it into production before go-live.”
This exercise served the dual benefit of facilitating change management by placing a high value on both transparency and training. Roughly six months before rolling out a new location, country-specific transition leads would train users on the template and familiarize personnel with any process changes. “The transition leads were our eyes and ears on the ground as liaisons between the technology team and the business process team,” Bhonagiri says. “Whenever an issue arose, this concept helped us address it very quickly from a change management standpoint.”
Quantifiable Results
AbbVie also took the time during the migration to verify it was in compliance with all local data privacy regulations. In May 2015, the company completed the global rollout of SAP ERP. While meeting the TSA deadline and standardizing global benefits were two of the project’s primary outcomes, AbbVie also realized many other far-reaching benefits — chief among them an unprecedented level of agility and transparency.
“We now have a set of key metrics that are measured at the end of every month — for example, how long it takes to create new customers, vendor payments, payment terms, or order fulfillments,” says Bhonagiri. “Because we are on a single global instance, we can use dashboards to look at every country, measure results, find the root cause, and take corrective action more easily.”
More accurate reporting is a direct result of AbbVie having done the difficult work of streamlining processes on a global scale at the project outset. “As we built out the SAP implementation, we questioned processes and were able to streamline many of them to better meet the needs of our internal customers,” Bhonagiri says. “Throughout the implementation, having the opportunity to redefine our processes resulted in a great deal of agility.”
In short, AbbVie has seen a significant uptick in business efficiency because corrective action often leads to additional process improvements, according to Bhonagiri. “By looking at the metrics, we’ve been able to suggest process improvement steps to see how we can streamline a process to get more out of our investment in terms of business key performance indicators,” he says. “And because it’s on a single platform, we can look at it cohesively and take decisive action.”
The Road to SAP HANA
In April 2017, AbbVie went live with SAP Business Warehouse optimized for SAP HANA, deploying SAP HANA as a sidecar accelerator as the company’s first use of SAP’s in-memory database — and the business plans to upgrade to SAP S/4HANA in the next few years. The strategy of introducing the company to SAP HANA before that planned upgrade, according to Bhonagiri, was to provide technical staff and the infrastructure team with experience on the SAP HANA platform in advance. As AbbVie learned from its global SAP rollout, advance preparation pays off in spades. “I have been working on SAP projects for more than 20 years, and this is a project I am very proud of,” he says. “Everything that you always hope goes right during a project went right on this one.”
