E-invoicing at UCB

04 FEB 2016

Sapience Procurement

Agenda

2

• Introduction to UCB

• Project context and history

• Implementation

• Lessons learned

• Key success factors

UCB: A patient-centric biopharma leader

3

Focusing on severe diseases in

Immunology and the Central Nervous System

Key facts and figures:

■ FY 2014 revenue: €3.344 billion

■ FY 2014 rEBITDA: €609 million

■ More than 8 500 employees globally

■ Operations in close to 40 countries

■ R&D Spend: 28% of revenue

■ Listed on Euronext

UCB: changing the world everyday

4

Strategy Research & Development

Product design & communication Time to patient

UCB: reinventing itself, leveraging a solid heritage

5

1928: Emmanuel

Janssen establishes

UCB in Brussels

1972: A new state-

of-the-art R&D

center in Braine-

l’Alleud, Belgium

1980s: UCB

registers its novel

antihistamine

Zyrtec®

1990s: approval of

Keppra®,

a novel

anti-epileptic

2004: UCB

acquires British

biotech company

Celltech

2006: UCB

acquires German

pharma company

Schwarz Pharma

Today

Combine leadership

in antibody research

& chemistry expertise

to better treat severe

diseases

1928 1952 1972 1980s 1990s 2004 2006 2008-2010 Today

Chemical Group Primary Care Pharma Specialty Bio-pharma

Launch of Cimzia®,

Vimpat® & Neupro®

(CVN)

1952: UCB

discovers Atarax®

U.S. license

awarded to Pfizer

1936: UCB enters

the United States

1936

3 core medicines for patients with severe diseases

■ Rheumatoid arthritis

• psoriatic arthritis (PSA)

• ankylosing spondylitis (AS) – US

• axial spondyloarthritis (AxSpA) – EU

■ Crohn’s disease

■ Epilepsy adjunctive therapy

■ Parkinson’s disease

■ Restless legs syndrome

6

Other key products

7

Keppra® (levetiracetam)

■ Epilepsy adjunctive therapy (also in monotherapy in Europe) – Sold as E Keppra® in Japan

Keppra XR® (levetiracetam – Extended-release tablets) – U.S. only

■ Epilepsy adjunctive therapy

Zyrtec® (cetirizine HCl)

■ Seasonal allergic rhinitis

Xyzal® (levocetirizine dihydrochloride)

■ Allergies and chronic idiopatic urticaria

Briviact® (brivaracetam) (NEW)

■ Epilepsy adjunctive therapy

Agenda

8

• Introduction to UCB

• Project context and history

• Implementation

• Lessons learned

• Key success factors

SAP4UCB – ECC around the world

High:

4 major countries

Medium:

4 production countries

Low :

30 additional affiliates

Standard Global unique SAP ECC

almost all modules

9

Buy Smart for Patients Program

10

Simple,

user friendly

More added value

from Purchasing

Compliant

Optimized

cashflow

Best in class cost

Effective, efficient

& user friendly

buying process,

aiming for best-

in-class in a

compliant manner

New drivers in UCB

End-to-end, fully integrated process

Web-based tool for non-

stock purchases using

shopping carts

SRM Invoice management

system utilizing Optical

Character Recognition

(OCR)

VIM

Strategic

Sourcing

Requisition to

Order Confirmation Invoice Handling Payment

SRM + VIM

In

13 countries

Project context

11

Revision &

enhancement

of Source-to-Pay

related policies

PR-PO

cycle time

shortened to

2-3 days

PO utilization up around 90%

Optional use of expense

reporting tool for non-

catalog spend <€1K

Source-to-Pay Process

Strategic

Sourcing

Requisition to

Order Confirmation Invoice Handling

Payment

Employee Expense Report

Version upgrade

and GTP

requirements

integration

Introduction of a

simplified vendor

creation process

VIM

For 12

countries

Increase in

invoice first pass yield

SRM Shopping Carts

Available for indirect

spend in 12 countries

Ariba

Sourcing

Standardized

Purchasing

Sourcing tool

ARIBA Network

e-PO & e-Invoice

automation

e-Payment

Request

For manual

payments,

replacing paper forms in 26

countries

Actors GBS / FMD

Purch Business Business GBS / Proc

GBS / Proc or Purch

GBS / Proc

Business GBS / AP GBS / AP Business GBS / AP GBS / AP

Project context & objectives

12

Current UCB status & how the project is fitting to it

S2P process

Vendor Creation

Vendor Selection

PR/SC creation

PR/SC Approval

PO creation

PO approval

PO send Confirm

reception of goods

Invoice Receipt

Invoice coding

Invoice Approval

Payment Archiving

System SAP ECC

E-sourcing

Ariba SRM SAP ECC SRM* VIM

SAP ECC / Portal

Paper

Ariba Network

E-PO E -Ack E-invoicing

E-archive

Recently implemented

SAP

EMAIL

Paper

Operational

Archiving

E-Invoice

Legal

Archiving

Scope Overview

Scope is more than just invoices

ERP MM

Purchase Order

Inbound Delivery

PO’s, PO Changes & PO Cancel

Order Confirmation

Advanced Ship Notice

Invoice /

Accounting Doc.

Payment Run

Goods Receipt

Service Entry

Sheet

Goods Receipt

Service Sheet

Service Sheet Status Update

Invoice / CC Invoice

Invoice Status Update

Remittance Advice

Remittance Advice Update

UCB Business rules on Ariba

Network to ensure quality of

incoming documents

10 messages in scope

2 main messages:

PO + Invoices

Geographical: Main BE, UK, US, DE

UCB IT prereq.: VIM countries

StAN: Suppliers through Ariba Network

Business case: objectives

14

• Aligned with S2P strategy

• Increase Efficiency, Simplicity & user-friendliness

• Increase compliance

• Decrease administrative costs

• E-invoicing is now a mature technology

• Negative impact on Cash Flow acceptable

Efficient, effective and user-friendly

S2P process, aiming for best-in-

class, in a compliant manner

Efficiency, Simplicity &

User-Friendliness

Optimizing Cash Flow &

Working Capital

Best-in-Class "Administrative

Buyer Cost"

Added value by Sourcing Team

Compliance

Project planning

15

Principles

The PO & Invoice automation project consists of 2 tracks

Track 1: Solution implementation

■ Set-up of Ariba environment and connectivity

■ Blueprint

■ Implementation

■ Test, training, Go-live

Track 2: Supplier enablement

■ Recurrent onboarding activities according to flight plan

Project planning 16

Project management

Ariba Add-on

SAP IM Ariba integration

Change Management

Kick-off

Design Configure

Test &

Train

Go-

live

Supplier Enablement

Wave 1

Q1 2015 Q2 2015 Q3 2015 Q3 2015

Hyper care

Project management

Wave 2 Wave 2

Wave 3 Wave 3

Wave 1

Tra

ck

1:

Imp

lem

en

tati

on

T

rac

k 2

: E

na

ble

me

nt

Overview

17

Ariba integration

SAP ECC (MM-FI-…)

Ariba Network

Portal

Ariba Sourcing

Contract

Mangement

SIPM

Ariba

Network

VIM

Arib

a V

IM

add

-on

Ariba

ECC

add-

on

FI Inv

PO Inv

Payment

Integrated

suppliers

Invoice

Approval

Document flow

GR

/SES

Supplier

Supplier

POR

PO

Business Case: UCB invoice volume

18

Total count of invoices in 4 main countries (Be, Germany, UK, US): 135K

■ PO-related: 100K

■ Non PO-related: 35K

Raw data without taking into account any PO supplier exception

PO

invoices

Total

Belgium 51K 60K

USA 19K 23K

UK 19K 26K

Germany 12K 26K

Total 100K 135K

Cum % Nr of

suppliers Cum.

Spent %spent

10% 5 € 78M 5,7%

20% 16 € 104M 7,6%

30% 41 € 180M 13,5%

40% 85 € 269M 19,5%

50% 160 € 345M 25,1%

60% 289 € 468M 34,1%

70% 521 € 625M 45,4%

80% 963 € 836M 60,8%

90% 1930 € 1077M 78,3%

100% 6770 € 1376M 100% Total count of invoices in SAP PE1: 250K

PO-Related: 190K

Non Po-related: 60k

Business case: Ambition 19

E-invoicing at UCB

Year # E-

invoices

#vendors % of invoices

1 60k 289 44%

2 70k 521 52%

3 80k 1000 59%

4 90k 1000+ 66%

5 100k 1000+ 74%

Most E-invoicing suppliers claim they

can achieve 70% penetration in 2 years

Invoice Processing cost:

Penetration

18€ 9€

Conservative average

current AP cost

To-Be AP cost

E-invoice Cost

Processing cost 7,2

Cost to 3rd Party* 1,8

*Invoice processing cost+Archiving

We can reach 289 suppliers in 1 year.

Furthermore, we can process 80% PO-invoices

in 3 years, afterwards, we start processing non-

PO invoices

Business Case: Where are we?

20

In order to achieve the necessary savings, the business case expected target

volume of invoices, according to roll-out waves

Target

Waves 1-2-3

Actual %

# Suppliers Onboarded 289 110 38%

# Daily Invoices Transacting 490 125 26%

Detailed status

21

Highlights:

• On average the auto posting is 73% (ARIBA

inflow only)

• Continuous improvement in straight auto

post.

• On average the FY posting is 92% (ARIBA

inflow only)

High auto-posting rate

■ Implementation of the business rules on Ariba Network

■ Good quality of the invoice content

Integrated suppliers bring progressively very high volume

Supplier selection

■ Create a realistic flight plan

■ Suppliers needed to be excluded from scope, technical, purchasing or business point of view

Process compliance of the suppliers who have joined the Ariba network

Integrated suppliers

■ Integrated suppliers: min 8 weeks, 12 weeks more realistic

■ Dedicated team, with his own planning/methodology

■ High effort in testing

Onboarding performance

■ Accuracy of Vendor database, avoid generic contact details like info@supplier.com

Business Case: Achievements

22

Agenda

23

• Functional scope

• Providers comparison

• Business Case

• Ariba performance

• Key success factors

Lessons Learned on Ariba performance

24

Onboarding Process

Communication and customer involvement

■ The first communication to the supplier has to be handled by UCB and not by Ariba

• Sending the webinar invitations requires time

Onboarding process

■ Online Suppliers Summits bring a positive image and clarity to the suppliers

■ Onboarding requires data quality and accurate follow-up

• Flight plan data quality is key

• Reporting on onboarding results can be complex

• Monitoring the « escalated » suppliers through Excel file

• ANid is key but always not very known from contacts

■ Tiny details

• New format of the Vendor contact file

• Long processing time: min. 72h after the webinar to send the contract, risk of loosing the

momentum

• Close and detailed follow-up from Ariba team is key

Lessons Learned on Ariba performance

25

Project realization

Ariba functionalities

■ Add-on integration initial version limited in Services detailed functionality

■ Direct flows still with limited support: Pricing conditions, Subcontracting, Services, … (improving

with new Supply Chain functionalities and from release to release)

■ Supplier user friendliness for complex invoicing (new UI coming)

■ Ariba Business rules need to be well understood as driving the compliance

Process

■ Process streamlining is important but despite having streamlined process, process adaptations are

needed

Implementation partners

■ Partner need very good knowledge of end-to-end components: SAP, Ariba, IM by OpentText (VIM),

add-on, technical

Agenda

26

• Functional scope

• Providers comparison

• Business Case

• Ariba performance

• Key success factors

Key success factors

27

Drive eInvoice as part of P2P

■ Align Purchasing and Finance on goals, resource, priorities: buy in from both head of Dpt

■ Joint project team from Purchasing and Finance

■ Who is managing the contact with the suppliers?

Communication: make it part of company agenda

■ Internal: Finance & Purchasing teams need to be aligned but also business stakeholders

awareness

■ External: Strong message to the suppliers

Realistic business case

■ Do not assume the full vendor list will be onboarded – deep dive into the flight plan

■ Supplier onboarding is a collaboration task involving Ariba, customer and supplier

Conclusion

28

Confident SAP/Ariba is the right choice for UCB

Lessons learned will help to further improve next waves

Remain fully confident it is a success

SAP/Ariba management is highly committed

Support from Ariba partner speeds up implementation

Thanks!

Questions?

30

E-invoicing at UCB