Transition Management: A Model for Success
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Transcript of Transition Management: A Model for Success
Transition Management: A Model for Success
Barnaby Fountain, Master Black BeltDirector, Merck Sigma – Shared Business ServicesSeptember 22, 2011
V 1.4
Forward-Looking Statement
This presentation includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, statements about the benefits of the merger between Merck and Schering-Plough, including future financial and operating results, the combined company’s plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Merck’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the possibility that the expected synergies from the merger of Merck and Schering-Plough will not be realized, or will not be realized within the expected time period, the impact of pharmaceutical industry regulation and healthcare legislation; the risk that the businesses will not be integrated successfully; disruption from the merger making it more difficult to maintain business and operational relationships; Merck’s ability to accurately predict future market conditions; dependence on the effectiveness of Merck’s patents and other protections for innovative products; the risk of new and changing regulation and health policies in the U.S. and internationally and the exposure to litigation and/or regulatory actions.
Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in Merck’s 2010 Annual Report on Form 10-K and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).
Today’s Merck
Merck is a global healthcare leader working to help the world be well.• We provide innovative medicines, vaccines, biologic therapies and
consumer and animal health products to help improve health and well-being.
• We work with customers in 140 countries to deliver broad-based healthcare solutions.
• We demonstrate our commitment to increasing access to healthcare through far-reaching policies, programs and partnerships to help people around the world lead healthier lives.
Key Company Facts
$10.9 billion2010 R&D EXPENSE
$45.6 billion2010 REVENUES
Pharmaceuticals, Vaccines, Biologics, Consumer Health Care and Animal HealthBUSINESSES
Whitehouse Station, New Jersey, U.S.A.HEADQUARTERS
Approximately 94,000 (as of 12/31/2010)EMPLOYEES
Merck & Co., Inc. remains the name of the publicly traded company. It also is the formal legal entity name of our holding company, which has operating companies under it, including Merck Sharp & Dohme Corp., Schering Corp. and N.V. Organon, for example.
LEGAL ENTITY NAME
The Company is known as Merck in the United States and Canada. Everywhere else, we are known as MSD.
TRADE NAME
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Merck’s Organizational Structure
Organized into strategic divisions and global support functions (GSFs)
Centralized GSFs in 2006 to improve accountability and reduce cost structure
Strategic division and GSF leaders are members of the Executive Committee
Standardizing business processes, data and information systems globally
Integrating Schering-Plough to enable OneMerck and deliver value capture
Research Laboratories
Supply & Manufacturing
Global Human Health
Consumer Care
Animal Health
Finance
Legal
Human Resources
Strategy
Global Services
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Global Services at Merck
Chris ScaletEVP
Global Services (GS) and CIO
IT
SharedBusinessServices
(SBS)
Facilities Merck Sigma Security
Divisional IT
Application Services Technical Services
Enterprise Portal
Contact Centers
Hire to Retire
Procure to Pay
Order to Cash
Record to Report
Travel, Meetings and Media
Master Data, Reporting and
Analytics
Aviation
Facilities
Energy
Fleet
Real Estate
Sigma
GS Supplier Management
GS Learning
GS Operational Communications
People
Products
Property
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Shared Business Services at Merck Generating Productivity
ENTERPRISE PORTAL & SUPPORT SERVICES
One.Merck.com Usability Help Desks
GLOBALHR SERVICES
Hire to Retire Payroll Benefits
MANAGED SERVICES
Travel Card Meetings Media Contingent Workforce
DATA EXCELLENCE & ANALYTICS
Master Data Operations Reporting Analytics
STRATEGY & SERVICE ARCHITECTURESigma Master Planning Change Management
Americas EMEA AP/J
REGIONALCOMMERCIAL SERVICES
Order to Cash Procure to Pay Record to Report
• Raising the Effectiveness of our Managers, Employees and Client Groups
• Creating Capacity • Optimizing our Value
Chain, Cash Flow and Business Agility
• Proactively Managing Indirect Spend
• Integrating Value Capture
• Shaping our Shared Services Culture
• Driving Integration • Sustaining
Transformation
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Shared Services SuccessEconomies of scaleFlawless transaction processingMeeting service level agreementsExcellent customer satisfactionLabor arbitrageEnabling self-serviceEfficient standard processes - automatedContinuous improvement – lean thinkingCompliance with laws, regulations, and policy
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Building Trust and Credibility
• Expanding to new markets• On-boarding new services• Building a regional service center• Implementing a global ERP system• Integrating mergers & acquisitions
Leading efficient and effective service transitions is a fundamental capability Leading efficient and effective service Leading efficient and effective service transitions is a fundamental capabilitytransitions is a fundamental capability
New Dublin Service Center
Project Results
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Installation vs. Realization
Installation: Putting something new in place• Installation occurs when projects are first introduced and deployed
into a work setting
Realization: Achieving the expected return on investment• Realization occurs when the fundamental purpose for the change is
achieved
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What is Transition Management?Service Engineering
Alignment with service blueprintsBook of Operations: Process Flows, Job Aids, Policies, etc.
Organization DevelopmentImpact on Current OrganizationNew Organizational StructureRoles & ResponsibilitiesStaffing Strategy & Hiring
Successful Successful TransitionTransition
Transition Planning & SupportAccountabilityIntegrationPlan ManagementResources
LogisticsSupporting Telecom & TechnologyFacilitiesSecurity
Risk ManagementAssessmentMitigationMonitoringBusiness Continuity
RealizationKey Performance MetricsService Level AgreementsContinuous Improvement
Marketing & CommunicationAudiencesDevelopment of messages/ marketing MaterialRollout
Sponsorship & Relationship ManagementAssessmentDevelopmentMaintenance
Vendor ManagementPartner EngagementService ModelRelationship Management
Training & EducationAssessmentDevelopmentDelivery
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End-to-End Transition Process
Legacy SBS-aligned
IdentifyOpportunities
AssessOperations
Evaluate Transition Stabilize
ImplementChange
BuildTransition
Plan
Handover &Sustain
cost &capability gap
people, process,tools development
people, process,tools transfer
Cost and capability transformation
Transition Management
Create, improve, or continue a service
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Critical Skills
Project Management
ChangeManagement
ServiceOptimization
Left
Right
• Schedule• Issues/actions• Risk management• Resource planning
• Compliance• Service Levels• Process Mapping• Critical to Quality• Process metrics• Failure mode & effects analysis
• Sponsor engagement• Intent alignment• People impacts• Communications• Training
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Framework
Initiate Discover Implement Optimize
Strategy TeamOps
Team
Project Team
BusinessInitiation
OpportunityAnalysis
PortfolioMgmt
ProjectInitiation
KickoffMeeting
Discovery Design Implement DeliveryOptimize
&Integrate
What isAgreed to?
Time Boxed?
High LevelScoping
Complexity/ResourcesRequired
PortfolioReview
Resource Impact
Budget Impact
ProjectCharter
Scope
Kickoff Plan
IdentifyTransitionTeam
ProjectEnrollment
Align on Scope
& Charter
DetailedDiscovery
Plan
Align Roles&
Responsibilities
Measure
Control
ContinuousImprovement
Production
Stabilize
HypercarePlan
Controls
Training
Provisioning
Legacy(Clean up)
Hiring
Notifications
Infrastructure
Communication
Future StateDoc
SOPs
Staffing Plan
Risk Mitigation
Plan
HypercarePlan
Org Design
CommunicationPlans
TrainingPlan
Current StateDocuments
StakeholderAnalysis
IT Implications
AuditImplications
DiscoveryReport
Project Plan
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Doing it well….
• Positioned for rapid growth• Merger and acquisition leaders• Benchmarked• Workforce career path progression• Great place to work• Retain top talent• Focus on end user productivity
Driving Transformation