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?“

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

Deloitte MCS Limited is a subsidiary of Deloitte LLP, the United Kingdom member firm of DTTL.

This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Deloitte MCS Limited would be pleased to advise readers on how to apply the principles set out in this publication to their specific circumstances. Deloitte MCS Limited accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication.

© 2016 Deloitte MCS Limited. All rights reserved.

Registered office: Hill House, 1 Little New Street, London EC4A 3TR, United Kingdom. Registered in England No 3311052.