olivier wuthrich, celgene and laurent nowicki,...
TRANSCRIPT
14-15 September 2016
Lisbon, Portugal
#DeloitteSharedServices
Deloitte Shared Services, GBS & BPO Conference
Breakout 9: Celgene - Delivering statutory reporting in Shared Services Centres
Olivier Wuthrich, Celgene and Laurent Nowicki, Deloitte
Contents
Celgene Tax and Finance Organization 3
Celgene International Compliance 5
Celgene’s journey to insourcing 10
Outsourcing vs. Insourcing 13
Celgene is building a preeminent global biopharmaceutical company focused on the discovery, development and commercialization of innovative therapies for unmet medical needs in cancer and immune-inflammatory diseases
• Operations in >60 countries
• Sales in >70 countries
• Manufacturing facilities in U.S. and EU
• Key research facilities in NJ, CA, MA and Spain
• ~7,000 employees globally
Global, Fully IntegratedPortfolio of Leading
ProductsUnique R&D Capability
• Expertise in hematology, oncology, and immunology
• Diverse technology platforms
• Rich pipeline
– 30 programs in preclinical development
– 26 treatments in clinical trials
– 18 pivotal / phase III programs underway
Celgene Tax and Finance Organization
Global reach, central management
An international team based in Switzerland
comprising:
• Multiple GAAP accountants
• Tax accountants
• Project Management specialists
• 50+ Legal Entities served in house and /or
outsourced
• 31 nationalities
• 20+ languages
HQ
International,
CH48 legal
entities across
23 countries
Asia Pacific
HQ Singapore,
8 legal
entities/
countries
Corporate HQ
Summit (NJ),
USA Americas
SSC &
Worldwide
Corporate Tax
APAC
EMEAAMERICAS
Celgene International Compliance
Key components of an integrated statutory accounting and corporate tax process
People
International and multidisciplinary team,
based in Switzerland SSC
Strong accounting & tax expertise
Project management specialists
Process
Standard & scalable processes
Standardised deliverables
Central management & governance in Switzerland SSC
Technology
Oracle R12
Trintech Cadency
Specific production tools (Deloitte)
Global entity management tool
What is key to build an integrated statutory accounting and corporate tax process?
An integrated, state of the art, statutory accounting and corporate tax process
• Management of deadlines
• Governance
• Review non-routine business events
• Preparation and integration of PBC
Q4 working session meeting
• Provide non- financial data • Business information update
• Management of external audit and statutory process (group & statutory)
• Clarify/confirm ad hoc matters
• Identify, prepare and document Mgmt. to Local GAAP and tax adjustments
• Review and approve • Submit
Financial Statements and CIT return
• Reporting on statutory process and CPI initiatives
• Access financial information through Cadency
• Review or preparation of Mgmt to Local GAAP and tax adjustments
• Preparation of local GAAP TB, Financial Statements and equity reconciliation
• Prepare LTP, CITR and RTP
• Provide support to reviewers
• Store on DOL
• Audit procedures• Provide proposed audit adjustments
• Review and approve
Celg
en
e S
wis
s
SS
CD
elo
itte
GTC
Au
dit
or
Su
pp
orti
ng
Tech
no
log
y
Data
Collection
Data
Validation
Data
Processing
Deliverable
Drafting
Review & Sign
off
Submit &
Archive
Mgmt.
Reporting
Process
Planning
Deloitte Conversion Tool (DCT) SFS and CIT specific tools
E-filing softwareCadency Oracle R12 - SL
Global Management Tool
Integrate CBC additional data points in PBCs. Eg. Tax Cash and Income by party (IC/external)
Review CBC & TP ratios
ConsolidateCBC report
How to ensure technology is enabling integration and transformation
ERP
Oracle R12 (GL,
AP, AR, …)
ConsolidationSystem
HFM
US GAAP
Local GAAP
Complex Jurisdictions *
Managementto Statutory ledgersDeloitte Conversion Tool or Extended
Oracle SL
All countries
Tax Provision
Corp tax
BS rec’n
Cadency
* Switzerland, UK, Spain, Italy, France, Germany, China, Japan
ManagementReporting
Ad hoc reporting layer
SFS & CIT returns
Local Tools
Global Management Tool
CBC
SFS CITR
Single recipient for all statutory data & source of cross-border standardized
reporting
US 10K
Current and future landscape
Building on and leveraging existing process
• Harmonize deliverables and reconciliations across all jurisdictions/LEs
• Reduce lead-time
• Include Tax and TP teams (Process design & RR)
• Complete roll out of Oracle & DCT
• Interact with Oracle SL through Cadency
• Connect output to CDX
• Deploy a global data management platform to monitor filings and access data
Data Management:
• Currently using Deloitte Online (Backbone) to exchange and archive (some) data
Efficient end-to-end statutory accounting and corporate tax process:
• Combined stat and CIT process
• 9 months lead-time
• Integrates all stakeholders
Leverage technology:
• Cadency: to share financial data
• Oracle R12 Sec ledger: to manage statutory ledgers in complex jurisdictions
• Deloitte Conversion Tool: for other jurisdictions
Information available for most of jurisdictions and legal entities:
• Standard deliverables
• Reconciliation GAAP to Stat to Tax (tax bridge)
Opportunities
Insourcing
Celgene’s journey
The journey from outsourcing to insourcing
Implementation
• Implementation of SSC strategy
• Outsourcing of compliance activities
Key achievements
• Accumulated Equity rec’ns schedules
• Complexity assessment
Key deliverables
Cosourcing
• Centralized model
• Mgmt. of compliance obligations
• Standardization
• Visibility
• Rationalization of complexity
Key deliverables
Key achievements
Readiness Assessment
• Feasibility assessment
• Secure knowledge
• ID processes & jurisdictions to in-source
• Ad hoc advisory assistance
Key deliverables
Key achievements
Insourcing
• In-house local GAAP ledgers for key jurisdictions
• ID of new opportunities
• Cosourcing continues for LE not insourced
Key deliverables
Key achievements
Key take-aways to being successful in insourcing statutory accounting
• Knowledge & ownership
• Improve understanding
• Leverage technology innovation
• Ability to have accounts ready throughout the year, where required
Why insource?
• IT and Finance project
• Clear objective & project plans
• Contributions of team members to build new tools
• Define finance functionalrequirements for IT
Project management
• Share best practices
• Harmonise processes to create one global standard
• Coach and train team members to align performance and expectations
One year later• Willingness from
management to develop the team
• Collaborative approach
• Team members ready to develop new areas
• Collective achievements, share success
How we made a project
Collaborative and sound support from the incumbent outsourcer
Outsourcing vs insourcing
Key considerations
Outsourcing vs insourcing
Is this the right question?
“Both methods are good as long as executed efficiently.
Our compliance process can now be flexed towards more insourcing or more outsourcing depending on team capabilities and service provider’s ability to deliver.
The key aspect is strong governance. A good management of the collaboration between the stakeholders will ensure timely results and avoid negative impact on quality.
The right question is –
How do we get the best of our COSOURCING model?“
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