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| www.genzyme.com
Erik Familial Hypercholesterolemia USA
Forecasting Health Assessment Michael Biddlecom, Director Corporate FP&A
May 15, 2013 Finance in Pharma & Healthcare Forum Philadelphia, PA
• Quick background on the New Genzyme and Sanofi
• Why check on the health of forecasting?
• Applying simple framework
• Genzyme example
• Applying to your organization
Topics for today
2
Focused on rare diseases and multiple sclerosis (MS) 6 major marketed products 10,000 employees worldwide Founded in 1981 and pioneered treatments for rare diseases David Meeker, MD, CEO
About Genzyme
3
• Strong relationships with patients and patient communities • World-class research targeted for unmet medical needs • Compassionate and committed employees
Our Personalized Approach
4
Our Global Commitment
5
Headquartered in the U.S.
with global locations in over 40 countries
Expanding manufacturing
capabilities in the U.S. and E.U.
Collaborating with patient communities, physicians,
universities, hospitals, charitable organizations,
companies globally
Serving patients in over 100 countries
Genzyme, a Sanofi company
• In April 2011, Genzyme became a wholly owned subsidiary of Sanofi
• We benefit from the reach and resources of one of the world’s largest pharmaceutical companies
• Sanofi’s portfolio of products includes: prescription medicines, vaccines, generics, consumer health care, and animal health
• 110,000 employees worldwide
6
Cardiovascular Late-stage treatment for Familial
Hypercholesterolemia (FH)
Genzyme’s Business Units
Rare Diseases Multiple Sclerosis
Genetic Diseases
One oral marketed product and
One late-stage infusion treatment
Endocrinology
Gaucher disease type 1, Fabry disease, Pompe disease, MPS I disease
Facilitating thyroid cancer treatment and testing
7
So, what do you mean by a “Forecast Health Assessment”?
9
Strategic C-Level
Enabling Operations
Finance Teams
• Top line risks & opportuni:es • Investment decisions & trade-‐
offs • Appropriate risk ga:ng
• Delivering quality numbers on :me
• Time & effort from finance community
• Compliance with planning guidance
Why and What?
• Focused engagement with multiple layers of the financial organization
• Feedback mechanism
• Systematically address the system and pain points
• Way to identify opportunities for improvement and mitigate risks
• Leverage pockets of expertise
• Foundation for both quick-wins and more structural improvements
10
What? Why?
• Address root-cause if had recent errors in the forecast process
• Show an appreciation that it’s just the final deliverable but effort to get there
• Need to leverage - having to do more with less
• Chatter is up on the process and lots of pain points
• Recent high turnover
• Recent merger or acquisition
• Identify and mitigate risks
• Looking for continuous improvement
People
Process
Technology
A Simple Framework
11
• Roles & responsibilities • Tenure • Skill set • Organizational alignment • Accountability
• Link b/t business strategy and financial targets
• Right level of detail • Right metrics • Reviews clearly defined
• Single source of the truth • Allows for decision making (e.g.
cost / patient; R&D project tracking; volume-price analysis)
• Stable and quick
Applying the Framework
12
Pre work
• Identify people for input • Develop questionnaire • Kick off from sponsor
Discovery
• Perform interviews • Compile feedback
Assessment
• Organize and prioritize • External benchmarking • Reviews with sponsors
Quick Wins
• Identify quick-wins to keep momentum • Implement
Communicate • Share results and plan with all involved
Structural Changes
• Address longer term improvements
2011 Sanofi integration
begins
• Genzyme & Sanofi integration begins
• New management • New view of the
P&L
2012 Conclude financial system & process
integration
• G/L • Forecasting tool(s) • Employee turnover
2013 Leverage systems,
tools & people
• Doing more with less • Driving efficiencies • Risk mitigation • Maintain data quality and basis for decision making
Genzyme Experience: So, how are we doing? What’s next?
13
Area Description Planning tool Hyperion Financial Management (HFM), managed
centrally by Sanofi in Paris Reporting tools Essbase, Qlikview (financials, units, patients, market
data, volume/price analysis) Forecasts 1 budget and 2 forecasts through HFM Revenue updates Monthly Planning units ~ 400 Users ~ 170 Regions / Functions Commercial: 5 regions (US, Canada, EMEA, LATAM,
JAPAC) Industrial Affairs, G&A
Corporate FP&A Genzyme based in Cambridge, MA
Genzyme FP&A Overview
14
• Framework § 3-week project § Complete prior to first corporate forecast
• Project Support § Sponsored by Genzyme CFO § Used outside consultant − Quick schedule − Outside perspective − Best practices
§ Two members of Corp FP&A team
• Approach § Interviews § Summarize findings at multiple levels in organization § Prioritize and implement
Project Approach
15
Phase 1 focused on identifying quick win and structural recommendations to improve the global financial forecasting process
16
• Global forecasting process: Long-Range Plan, Budget, F1, F2, Monthly Revenue Forecasts, Quarterly / Latest Estimates
Objectives • Perform an initial assessment of the existing forecasting process to identify current state challenges and
general pain points
• Summarize and prioritize current state challenges and risks
• Recommend approach and associated timing to complete the assessment phase and to develop process improvement opportunities (structural/strategic and tactical) ahead of F1
Phase 2 – Define and Implement Phase 1 – Prep and Discovery
Pre-work Discovery
• Determine individuals to interview
• Customize interview guides and materials
• Schedule interview activities and kick-off project with the stakeholders
• Finalize interview guide and approach
• Conduct current state assessment
• Conduct Interview sessions
• Consolidate feedback
• Identify top opportunities and risks
• Conduct qualitative assessment of initiatives
Finalize Assessment
Process Deep Dive
Define Quick Wins
Implement Quick Wins
Communicate
Monitor
Future Activities dependent on discovery
Scope
The interviews guide contained questions which were structured around the People, Process, and Systems & Technology
17
Inte
rvie
w G
uide
Cat
egor
ies
People Process Systems & Technology
• Understand how the various roles in the forecasting process are defined, and the ways in which those involved in forecasting are prepared to meet their responsibilities
• Understand the guidance provided during the forecasting process, the timing and protocol for producing and reviewing forecasts, the role and needs of stakeholders involved in the process and the interviewees' ideas about continuous improvement opportunities
• Understand how Genzyme uses systems and technology in the forecast process and in validating, consolidating and manipulating the data
• 22 interviews with 35 interviewees were conducted over 23 hours from 2/11 – 2/22, with representatives from Corporate, Industrial Affairs, Business Unit Finance, Regions and Countries
Sampling of Questions
18
People Process Systems & Technology • Do you know who the
forecasting process owners / stakeholders are? Is it clear who signs off prior to loading the submission into HFM, who enters the submission data into HFM, and who reviews and approves prior to promotion to the next Review Level?
• Is the current training provided appropriate to allow the forecasting process to operate to its fullest potential? If not, what changes would you recommend?
• Is the current training provided appropriate to allow the forecasting process to operate to its fullest potential? If not, what changes would you recommend?
• Are the purpose, goals and business assumptions around forecasting communicated and well understood for your Regions / BU / Market?
• How do you measure performance of the process? Do you complete a process review after each cycle? If so, what changes have been identified and implemented?
• Do you see any inherent risks in the current state forecasting process (e.g., timelines, guidance, validation, etc.)?
• Is there a well-defined process for the consolidation and approval of forecast submissions?
• Do you see any risks in the current systems / tools (e.g., data translation from local planning system to HFM, etc.)? If yes, what steps to date have you taken to mitigate these risks?
• How are key decision makers asking to view or “slice” the data? Are their needs easily met through the existing systems and tools?
• How do you translate data from your local planning tool(s) to HFM? What systems / tools do you use and what challenges do you experience in this activity?
External Benchmarking
19
People
Process
Technology
Emerging Leading
Can be helpful in long term goal setting. Driven by complexity (markets, products) of business, maturity of firm and role of forecasting
Illustrative
Executive Summary – Key Themes & Example Findings
20
The team conducted interviews of 35 members of the global Finance organization and found following key themes emerging from the discussions.
Key Themes
People-based vs. process-based activities
Short tenure across forecasting process owners
Insufficient time to review and analyze
Challenges collecting non-financial information
Disparate technology platforms and significant manual effort
Executive Summary – Summary of Recommended Actions
21
Risk Org Level Resolution
Corp Region Country QW MT LT
Accuracy and Time for Reviews H H H P P
Inefficiencies Across Process and Submission H H H P P
Visibility and Transparency H M L P P
Turnover and Experience Gaps M M M P P
H – High, M – Med, L – Low QW – Quick Win, MT – Med Term, LT – Long Term Key:
• When it might be helpful: § Is chatter up from the business? § Recent transformational event (e.g. merger, restructuring)
• Approach § Sponsorship at CFO level § Address systemically or more focus on one area (e.g. planning systems) § Execution − Establish small internal team − Use of consultant
• Follow-through § Share results with all the participated § Create plan § Execute and meet quick-wins to keep momentum!
Thoughts in applying to your organization
22
Vision for Genzyme Corporate FP&A
▪ Strong customer orienta:on ▪ Act as and build one global team ▪ Open and honest communica:on ▪ Look for and drive improvements in process
FP&A Accuracy & Timeliness Customer Service
Being a “reporter” is never enough; always
seek to provide insight to help drive the business
through objec;ve analysis
No one ques;ons the quality of the numbers and
we are proac;ve in mee;ng ;melines
Dedicated support to our customers, collabora;ve interac;ons with all of
Finance
Vision
Organiza,onal pla/orms
▪ Make it simple – dashboards, metrics ▪ Learn and know the business ▪ Collabora:ve and team-‐focused ▪ Be leaders in the organiza:on
Be a key and trusted source for Genzyme financial plans and results. A partner
within the Sanofi finance group. Con:nually drive for improvement and simplicity in what we do. Influence GZ management in the financial direc:on of the company