Case Study: Novartis

Pharmaceutical leader improves capital expenditure and project tracking with i-nexus

Executive Summary Novartis introduced i-nexus to more effectively control and report on capital expenditure and to facilitate enhanced IQP (Innovation Quality Productivity) project management. The i-nexus Capital Expenditure and Operational Excellence StartPoint solutions have enabled Novartis to bring about a more effective and efficient process for managing performance improvement programmes and to support the annual capital expenditure planning process. Novartis is rolling out i-nexus across multiple divisions to manage projects that have been initiated in divisions including pharma, vaccines and diagnostics, and consumer health.

Employees: 100,000+ Description: Swiss-based Novartis AG is one of the largest and most widely respected pharmaceutical companies in the world. With over 100,000 associates worldwide, the company operates in 140 countries and is ranked by IMS Health as one of the fastest growing global pharmaceutical companies worldwide.

Profile

Challenges As a large-scale organization operating across over 100 countries worldwide, the issues faced by Novartis with regards to capturing and managing different types of projects were not uncommon. To effectively implement, manage and report on these projects, Novartis needed a single software solution that would essentially simplify the complex task of aggregating the financial impact of the significant number of capital expenditure activities that impact the cash/profit forecast. In the planning stages, Novartis highlighted three challenges areas across the organization as follows:

• CapitalExpenditureManagement- The quality of data that capital expenditure portfolio decisions were being based on was at times unreliable as a result of working with multiple project repository centres - The consolidation of reporting figures across all management levels was time consuming and ensuring clear visibility of responsibility for project delivery was often difficult - Due to the limited exception reporting available, project managers were forced to use spreadsheets for daily tasks and as such, the majority of detailed reports were created using separate tools, resulting in both redundant and double-entry of data - The combined effect of these three challenges was making it impossible for capital expenditure program managers to guarantee that all projects were following central guidelines and project management policies.

Profile

Projects Views

Solution i-nexus worked closely with Novartis to implement the most relevant software StartPoint solution to help meet the challenges set out. i-nexusCapitalExpenditureStartPointSolution Together with Novartis, i-nexus developed a bespoke version of its Capital Expenditure StartPoint solution to create a Capital Expenditure Management Reporting Tool (CMRC) tailored to the needs of the company. This intuitive tool enables the finance function to improve on its ability to implement, track and report capital expenditure projects across a large number of sites, on a global and divisional level. To ensure clear empowerment of the Project/Site Management, the business process is designed so that the managers individually own and maintain the project data.

• EstablishingaWorldClass‘NovartisWay‘forIQP- Novartis’ vision for IQP was for the organization to become the benchmark for Operational Excellence in the pharmaceutical industry by institutionalizing a world class ‘Novartis Way’ for IQP - Delivering on this vision was a key requirement.

• CarbonReductionReporting- As with all industrialized organizations a strong carbon reduction commitment is essential for Novartis and being able to clearly and easily report on the success of carbon reduction initiatives is a requirement for the organization.

Capital Planning Data Views

Using CMRC, projects are separated into three relevant categories based upon the type of project and budget level involved. All projects are launched using a Quick Projects version of the tool which provides a basic financial planning function and supports automatic calculations for most cost types. Projects in excess of £2 million are promoted to ‘Templated Investment Projects’ (or ‘Full Projects’), when planning activities start. This gives the opportunity to track more detailed information and supports a higher level of process. Both of these projects hold their own budget. A special type of project (baseload projects) allows the management of a group of smaller projects that must not be listed individually, but their effect needs to be fully visible for budgeting purposes. Through this tool, Novartis can effectively manage capital expenditure projects maintaining a high level of detail on a project’s status and confidence in real-time data. The tool also provides a central repository for document sharing throughout the organization allowing for easy consolidation across different buildings and sites and tailored information bespoke to the project team.i-nexusOperationalExcellenceStartPointsolutionThe i-nexus Operational Excellence StartPoint solution has been designed specifically to track the impact of a significant number of operational activities and to prioritize cost reduction and investment opportunities, whilst also accelerating benefit delivery from implementation of improvement methodologies. Novartis use this solution to facilitate decision making based upon facts and real-time data whilst sustaining an optimal level of business processes performances driven by customer requirements.

““One of the main benefits that i-nexus software has brought to Novartis has undoubtedly been its high level of flexibility. Due to the modular nature of the software, we are now able to quickly and easily promote projects from Quick Projects to Full Projects whilst being confident that the reporting will continue to grow and expand with the changing scope of each project.” “i-nexus has dramatically enhanced our ability to tightly manage capital expenditure projects using the Capital Expenditure Management Reporting Tool which facilitates more accurate financial forecasting. We look forward to seeing how i-nexus can be rolled out across the organization to deliver additional improvement benefits, particularly with regards to carbon reduction reporting.” Marcel Staudt, Head of Project Management, Novartis

Benefits By using i-nexus, Novartis now has an enhanced ability to implement, track, monitor and report back on a vast number of financial and process improvement projects in line with their strategy. This ability to execute in a more efficient and effective way is bringing about tighter control on capital expenditure projects which, in turn, results in more accurate financial forecasting across the organization. The use of templates for larger project allows Project Managers to replicate best practices as they provide a guide on how such projects need to be executed, making it much more intuitive. Positive business benefits can be realized more quickly using i-nexus, in a much more cost-effective manner. i-nexus software puts Novartis in a position where they can quickly and easily asses the overall performance of any defined benefit or action. By simplifying and improving the way in which data is managed, actions can now be cascaded, tracked and reported, which in both the short and long term will help the organization to operate more effectively and efficiently. Furthermore, Novartis believes that as a result of such co-funded developments, substantial savings have been delivered in terms of resources, and the software allows best practices to be shared across the global business. This is adding significant value to the business overall.

Take the next step i-nexus provides leading global organizations with a robust Business Execution System to help them better execute their strategies and achieve their goals. To find out how i-nexus can help your organization deliver on its objectives, visit www.i-nexus.comand request a guided demo.

Updating Capital Expenditure

Phases and Activity Flowi-nexusCarbonandEnergyManagementStartPointsolution To work in conjunction with the CMRC tool, Novartis will be introducing the i-nexus Energy and Carbon Reduction StartPoint solution to assist with the delivery of their carbon reduction goals. The solution will provide Novartis with a system that is capable of creating and maintaining a series of location-based energy conversion rates on a time-sensitive basis. Simultaneously, the performance will be tracked and monitored using the information captured against current projects.