life sciences executive overview

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March 2015

Improve outcomes and enable innovation for the life sciences industry

Executive Overview

© 2015 SAP SE or an SAP affiliate company. All rights reserved. 2

Market Dynamics SAP for Life Sciences Why SAP? Next Steps

The mandate: grow in a dynamic and changing market

Differentiate in a market of global healthcare reforms and growing competitionAchieve operational excellence while complying with increasing regulatory requirementsIncrease customer satisfaction and patient safety despite volatile value chainsImprove patient outcomes and drive personalized medicine

Take advantage of new collaboration models across traditional outsourcing partners, care providers and patients



Mastering the challenge: Innovate while improving profitability and efficiency

Primary Business Objectives Key questions: How do we . . .

Innovate faster, drive personalized medicine, and improve patient outcomesMaximize supplier performance for APIs, substances, materials, and outsourced servicesOptimize supply chain efficiency and customer serviceSecure high product quality, patient safety and compliance efficiently

Increase brand value, customer loyalty and revenue

Improve R&D productivity?Find new solutions focusing on patient outcomes?Collaborate with third parties efficiently?Comply with ever-changing complex regulations?Proactively minimize operational risk?

• Attract many market segments via many channels?



Improve outcomes and enable innovation for the life sciences industry

* In comparison to bottom quartile performers

Collaborative R&D

Streamline development, simplify collaboration with internal stakeholders and external research partners and manage compliance

Strategic Sourcing and Procurement

Integrate and automate sourcing and procurement processes, including on- and off-boarding of third parties, with full visibility into spend and supplier performance

Demand-Driven Supply Networks

Synchronize demand and supply, optimize inventories and ensure global traceability of drugs and devices

Compliant Manufacturing

Align and integrate core manufacturing processes internally and externally, monitor KPIs and mitigate risks

Multi-Channel Sales, Marketing and Service

Consistently demonstrate product and services differentiators across the spectrum of payers, patients and caregivers

Suppliers:Chemical

and equipment

Contract research organizations

Contract laboratories

Wholesalers

Physicians,patients,

payers, anddrug stores

Contract manufacturers

Contract packaging organizations

Human resources

Finance

Collaborative R&D

Demand-driven supply

networks

Strategic sourcing

and procureme

nt

Multichannel sales,

marketing, and

service

Compliant manufactu

ring

Platform and technology

Contract organizations


Driving top performance delivers substantial rewards

82% lower R&D expense (% of revenue)

58% higher revenue growth (%)

39% lower days in inventory

* In comparison to bottom quartile performers

Industry analysis shows that top performers in life sciences achieve:*

*In comparison to average performers, source: SAP Performance Benchmarking, all benchmarks are for life sciences except R&D expense as a % of revenue, R&D expense as a % of revenue benchmark is for consumer products and life sciences industries.

0.6%7.0%

Bottom 25% Top 25%

63140

12.0%3.0%

Average

3.3%

104

7.6%

53% higher operating margin (in %)

38% lower spend (% of revenue) 28.4%57.0% 45.8%

25.7%8.4% 16.8%



To support top performance SAP offers a comprehensive and industry-specific solution portfolio

Industry value map for

Corporate functions > Finance | Human Resources

Collaborative R&D



Project and Portfolio Management Research and Discovery Design and Development Product Safety and Compliance

• Environment, Health, and Safety

Platform and technology > Enterprise technology | Analytics | Mobile | In-memory platform

Strategic Sourcing and Supplier Management Direct Procurement (On Premise) Contingent Workforce Management Services Procurement (On Premise)

• Travel Management

Sales, Inventory, and Operations Planning Demand Management Response and Supply Management Supply Chain Integrity

• Extended Supply Chain Insights


Production Scheduling Responsive Manufacturing and Quality Management Warehouse Management Maintenance and Service

• Contract Manufacturing

Life Sciences

Multi-Channel Sales, Marketing and Service

Market Segmentation and Campaign Management Order to Cash Collaborative Sales Force Automation Field Service Management

• Omnichannel Commerce Management



Collaborative R&D

Typical results*

What do SAP solutions help customers do?

Project and Portfolio Management Develop new therapies and services based on value-driven investment decisions

65lower cost when product ideas are evaluated with a standard set of analytics*

faster time to market when development is run through a documented process*% %13

Design and Development Collaborate across silos and integrate product development to get to market first with innovative, compliant products

Product Safety and Compliance Ensure that new therapies comply with evolving regulations and maintaining brand value

Environment, Health, and Safety Reduce environment, health, and safety risks to help ensure safety and business continuity

Research and Discovery Adopt new business models and open new revenue streams with Big Data insights

*Source: SAP Performance Benchmarking.

EHS Global Label Management – Creating compliant labels efficiently




Typical results*



Strategic Sourcing and Supplier Management Reduce risk and cost through increased savings opportunities, sourcing efficiency, and contract and supplier compliance

46lower cost for companies with a single electronic supplier contract repository*

of life sciences firms have a single electronic repository of supplier contracts*% %21

Contingent Workforce Management Cut costs, enforce compliance, and improve quality and efficiency

Services Procurement (On Premise) Standardized, automated, and collaborative service procurement

Travel Management Streamlining the entire trip lifecycle to control costs and enforce corporate and legal compliance

Direct Procurement (On Premise) Improve operational efficiency and source determination for direct materials

Ariba Supplier Enablement – Onboarding suppliers quickly




Typical results*



Sales & Operation Planning – Aligning supply and demand precisely in real time

Sales, Inventory, and Operations Planning Align demand and supply plans across business functions, in tune with overall financial goals

6.3Higher inventory accuracy for Life Sciences companies which have real time enterprise wide visibility to inventory*

higher on-time delivery where safety stock is calculated dynamically and often*X X17

Response and Supply Management Align planning and execution in real time

Supply Chain Integrity Provide safety and efficacy of drugs and devices across the value chain

Extended Supply Chain InsightsOptimize supply chain responsiveness through extended, real-time insights

Demand Management Manage and analyze demand streams to feed operational planning and drive greater productivity and customer satisfaction




Typical results*



ERP PP-PI – Achieving compliance efficiently through electronic batch records

Production Scheduling Integrate production planning with scheduling and minimize inactivity

10higher on-time delivery when causes of issues and resolution are found quickly*

lower inventory of finished goods with integrated manufacturing execution systems*% %33

Warehouse Management Improve planning and optimization of warehouse operations

Maintenance and Service Asset retention or restoration maintenance for optimal performance of required functions

Contract ManufacturingUse a responsive multitiered supply network to streamline collaboration with trading partners

Responsive Manufacturing and Quality Management Synchronize manufacturing and business operations



Multi Channel Sales, Marketing and Service

Typical results*



Market Segmentation and Campaign Management Market with speed and precision, and convert market opportunities before they disappear

26 of organizations use multichannel communication to optimize customer contact*

lower cost per interaction for organizations using multichannel communication*% %15

Collaborative Sales Force Automation Providing medical representatives with the resources and information they need to close sales faster

Field Service Management Support field service from every angle with optimized workforce scheduling and mobile apps

Omnichannel Commerce ManagementAttract and keep more customers in today's omnichannel marketplace

Order to Cash Optimizing order-to-cash processes to improve customer satisfaction

Marketing Analytics – Segmenting and targeting your audiences more effectively



SAP solutions are delivered on a real-time platform

SAP Business Suite software

SAP Business Warehouse application

Private cloud (SAP HANA Enterprise Cloud service)

SAP HANA Cloud PlatformIntegration | Development | Customers | Partners

Big Data

Internet of Things

Industries

Industry cloud

HR CEC FINANCE PROCURE TRAVEL

Line-of-business public cloud

The SAP platform is designed for collaboration, innovation, and high performance, taking a “cloud first” approach



Delivering substantial value through simplification

Real-time processes Digitally connected enterprise Best business practices

Simplified data model Choice of deployment Open innovation platform

New profit models Lower total cost of ownership

Complex technologyComplex business processes Complex user experiences

Live business insight Role-based experience All devices

Immediate business impact



SAP platforms and solutions reflect unmatched industry expertise

3200+ 40+ years of delivering value to life sciencesGet access to industry-tailored value engineering servicesBenefit from tightly integrated comprehensive Business Solutions

Leverage a comprehensive life sciences industry network

of the life sciences companies in the Forbes Global 2000 are SAP customers

Chemicals

AllerganArkopharmaB. Braun MelsungenBoston ScientificBristol-Myers SquibbCareFusionConvaTechDishman Eli LillyRocheGlaxoSmithKline

Indian ImmunologicalsJohnson & JohnsonMedtronicMerckNovartisNuvasiveOraSureRanbaxy LaboratoriesSanofi-AventisSt. Jude MedicalWyethZimmer

Industry

97%

*Source: Source Text

life sciences companies in 86 countries run SAP solutions.


Welch Allyn: Speeding Innovation Process with SAP® Product Lifecycle Management

CompanyWelch Allyn

HeadquartersSkaneateles Falls, New York

IndustryLife sciences – medical devices

Products and ServicesMedical devices and services

Employees2,600

Web Site www.welchallyn.com

PartnersZytalis Inc., Linx/AS LLC, and LeverX Inc.

Top objectives Release product innovations more quickly and efficiently Replace legacy software with first-class product lifecycle management

software for all locations Support all plants with standard processes and configurations

Resolution Implement the SAP® Product Lifecycle Management application as

the corporate global environment Support 1,500 employees and 60 CAD engineers and users as well

as operations and services enterprise-wide Establish a new governance process for global standardization

Key benefits Reduction in IT costs More efficient release of product innovations and improvements Centralized product data management for all locations with one small

team Standardized training and education for engineering teams worldwide Leveraged the service expertise of Zytalis Inc., Linx/AS LLC, and

LeverX Inc.

“Ultimately, we knew that a single enterprise solution would allow us to become more efficiently connected and accelerate our global growth and profitability.”

Lauri Ventresca, Director, Global Product Data Management, Welch Allyn

35106 (15/02) This content is approved by the customer and may not be altered under any circumstances.

50%Reduction in average days to implement a sponsored engineering change request (ECR) or engineering change order (ECO)

75%Reduction in resources required to prepare ECR packages

1,500Application users

http://www.welchallyn.com/


Perrigo Streamlines and Enhances Trainingwith SuccessFactors Solutions

Company or OrganizationPerrigo

Headquarters or LocationAllegan, Michigan, U.S.

IndustryLife Sciences

Products and ServicesLearning

Employees6,000

Web Site www.perrigo.com

Objectives Develop an agile learning system to stay proactive in complying with

constantly changing controlled documents and FDA-mandated training

Bring new acquisitions into alignment with processes Enable the training department to support larger programs

Why SAP Ability to support consistent training and enterprise-wide adoption of

Good Manufacturing Practices (GMPs) Ability to customize controlled documents for future effective dates

Benefits Eliminated lag time between when new controlled documents take

effect and when employees are qualified on them Streamlined FDA compliance inspections and audits Avoided slowing the production line by training employees one at a

time at kiosks Cut costs by reducing paper records and automating the process of

managing training

“SuccessFactors eases FDA compliance and audits. More importantly, it eliminates the lag time between training and crewing a person to a line….”

FasterFDA compliance inspections and audits

Easieremployee training at kiosks

Lowercosts through reductions in paperwork

xxxxx (YY/MM) This content is approved by the customer and may not be altered under any circumstances.

http://www.perrigo.com/



Life Sciences industry leaders rely on SAP

Collaborative R&D


Demand-Driven Supply

Networks


Multi-Channel Sales,

Marketing and Service

http://www.novonordisk.com/default.asp



Next steps

Initiate

…the benchmarking process with a free value assessment at valuemanagement.sap.com.

Engage

…with SAP in design thinking workshops.

Contact: your SAP CONTACT

Contact

…your account team to schedule a meeting.

SAP CONTACT NAME

SAP E-MAIL ADDRESS

Experience

…it yourself at the next SAP event near you, or check out SAP global events or solutions for the life sciences industry

http://valuemanagement.sap.com/

http://www.sap.com/events/index.epx

http://www.sap.com/life-sciences

http://www.sap.com/life-sciences

AppendixLife Sciences industry placemat


SAP for Life Sciences

Improving outcomes and enabling innovations

SAP for Life Sciences solutions help you run better by enabling innovation for products, processes, and services to improve operational efficiency, quality of products and services, and patient outcomes.

Collaborative R&D: Streamline development, analyze Big Data to develop personalized medicine, and manage global collaboration and R&D costs.

Strategic sourcing and procurement: Simplify sourcing and procurement processes, including management of third parties, with full visibility into spend and supplier performance.

Demand-driven supply networks: Synchronize global demand and supply, optimize inventory, and help ensure global traceability of goods for patient safety.

Compliant manufacturing: Integrate core manufacturing processes internally and externally to achieve real-time visibility and mitigate risks.

Multichannel sales, marketing, and service: Improve ROI and customer satisfaction by consistently demonstrating product and service differentiators across the spectrum of patients and caregivers.

Innovations for life sciences

SAP® solutions help life sciences companies: Accelerate development cycles Enable operational excellence, compliance,

and patient safety Improve collaboration with outsourcing

partners and clinicians Interact and engage with business-to-

business customers and patients in a tailored way

Acquire, train, and retain top talent

SAP for Life Sciences solutions in 2017 45 years of proven value delivered to

the life sciences industry Industry cloud offering in a validated

environment with partner ecosystem

Industry strategy

Suppliers:Chemical

and equipment

Contract research organizations

Contract laboratories

Wholesalers

Physicians,patients,

payers, anddrug stores

Contract manufacturers

Contract packaging organizations

Human resources

Finance

Collaborative R&D

Demand-driven supply

networks

Strategic sourcing and procurement

Multichannel sales,

marketing, and service

Compliant manufacturing

Platform and technology

Contract organizations


Proof points

Resources

Web resourcesSAP.com

SAP Solution Explorer site

SAP Value Lifecycle Manager site

Social media

Industry value map for life sciences

SAP Global Batch Traceability application

SAP Sales and Operations Planning application

SAP Enterprise Inventory and Service-Level Optimization application

SAP Manufacturing Execution application

SAP Manufacturing Integration and Intelligence application

Sourcing and procurement from Ariba, an SAP company

Validated SaaS from SuccessFactors Learning

Business network from Ariba for manufacturing collaboration and communication with business partners

Highly intuitive, self-service, predictive analytics integrated across business processes leveraging the SAP HANA platform

Comprehensive, life sciences-specific, cloud-based solution portfolio across various lines of business functions

Advanced track and trace for pharmaceuticals

Medical insights and genomic analyzer solution based on the SAP HANA platform

Integrated business planning and process enhancements for manufacturing, warehouse, quality, plant maintenance, and service management

Mobile-enabled solutions for improved collaboration and engagement of patients, clinicians, and manufacturers

>3,200 life sciences companies

in 86 countries run SAP solutions.

20 of the 20 pharmaceutical companies with the best innovation processes in the world run SAP solutions.

24 of the 25 top biotech companies in the world run SAP solutions.

Our customers produce more than

82% of the world’s medical devices.

Source: SAP analysis of Forbes Global 2000 rankings and SAP customer database.

Future directionRecent innovations Planned innovations

Featured differentiators and road map

Corporate functions > Human resources | Finance

Technology > Enterprise technology | Analytics | Mobile | In-memory platform

Collaborative R&D

Strategic sourcing and procurement

Demand-driven supply networks

• Project and portfolio management

• Research and discovery

• Design and development

• Product safety and compliance

• Environment, health, and safety

• Strategic sourcing and supplier management

• Direct procurement• Contingent workforce

management• Services procurement• Travel and expense

management

• Sales, inventory, and operations planning

• Demand management• Response and supply

management• Supply chain integrity• Extended supply chain

insights

Compliant manufacturing

• Production scheduling• Responsive

manufacturing and quality management

• Warehouse management

• Maintenance and service

• Contract manufacturing

Multichannel sales, marketing, and service

• Market segmentation and campaign management

• Order to cash• Collaborative sales

force automation• Field service

management• Omnichannel

commerce management

sap.com/life-sciences

sap.com/solutionexplorer

valuemanagement.sap.com

@SAPHealthcare

SAP Community Network: Life Sciences

http://www.sap.com/solution/industry/life-sciences.html

https://rapid.sap.com/se/executive#!/vlm/i_life_scs/vlm-i_life_scs-ind~~.~~i_life_scs

https://valuemanagement.sap.com/vlm/#/

https://twitter.com/saplifesciences

https://twitter.com/sap_healthcare

http://scn.sap.com/community/life-sciences

http://scn.sap.com/community/life-sciences

life sciences executive overview

Software

sap se

market dynamics sap

sap affiliate company

patient outcomes

patient safety

market segments

rd productivity

supply chain efficiency