OTC Project

Corporate ITS Meeting Overview

October, 2013

Agenda
Project Introduction
Scope OTC Solution
Project Objectives
Project Plan
Solution
OTC Application Map
Integration Model SAP ECC, BW and IBIS
Finance Benefit from SD-FI/AR Integration
Organizational Structure
External Systems
o Truecommerce
o Kenco
o Vertex
o BW
o PPS
o IBIS

Project Introduction
Scope - OTC Solution
The OTC solution is currently outsourced excluding the yellow items below.
Excluding Warehousing Processes, UPS has approximately 20 resources
supporting these processes today. These processes and people will be brought
in house with a go-live date planned April 1st, 2014.
Returns
Processing

Order
Entry

Pricing

Credit
Check

Pick, Pack
& Ship

Accounts
Receivable

Invoicing

Cash
Receipts
Application

Deductions
Processing
Perpetual Inventory Records &
Distribution Resource Planning

Sales & Use

Tax
Wholesaler
Chargeback
Processing

Credit Management
Customer, Product, and Inventory Master File Maintenance
Price Master File Maintenance
3

Project Introduction
Project Objectives

OTC Objective: Transition Order-To-Cash services to best-in-class

process and systems to create maximum value for customers.

Strategic goals and objectives:

DELIVERABLES

Make Bracco Easy To Do Business With

Reduce recurring costs for managing supply chain costs
Develop internal expertise on AR & CB processes
Gain operational control over AR & CB processes
Improve customer satisfaction by creating end-to-end view of account management
Improve corporate visibility to North American activities through use of SAP
Leverage Best in Class Unity processes
Share Best in Class BDI processes with other entities
Partner with external warehouse to maximize benefits coming from economies of scale,
LEAN and SIX-SIGMA projects.
Increase reliability of the supply chain

Project Introduction
High Level Plan
Q4-12

Q1-13

Q2-13

Jan
Kick-of

Q3-13

Q4-13

Q1-14

Q2-14

Project
Project Management
Management
May

Dec

July

Nov

Mar

Apr 1

Jun

Plan/Anal
Plan/Anal
ize
ize
Design
Design
Plan/Analiz
Plan/Analiz
e
e
Chargeback
Chargeback
selection
selection (1)
(1)
Credit
Credit Card
Card
selection
selection (2)
(2)
EDI
EDI selection
selection
(3)
(3)
Tax
Tax selection
selection
(4)
(4)

Design
Design

Build
Build

Analize
Analize

Go-Live

Build
Build

Test
Test

Design
Design
Build
Build

Depl
Depl
oy
oy

Support
Support

Training
Training

Change
Change Management
Management
Technical
Technical Architecture
Architecture

Kenco
Kenco Operating
Operating Model
Model Set
Set Up
Up

(1)
(2)
(3)
(4)

Limited
Availability of
Finance team

Chargebac
Chargebac
kk

BW/BO
BW/BO
Reporting
Reporting

SAP
SAP OTC
OTC

Final decision on chargebacks (custom or package solution)

Contracting with Credit Cards vendors recommended Paymetric
EDI Outsourcer selection
Tax Vendor Selection Vertex or Sabrix

Project activities
to be done before
1 / 31

Scope Confirmation

Agenda
Project Introduction
Scope OTC Solution
Project Objectives
Project Plan
Solution
OTC Application Map
Integration Model SAP ECC, BW and IBIS
Finance Benefit from SD-FI/AR Integration
Organizational Structure
External Systems
o Truecommerce
o Kenco
o Vertex
o BW
o PPS
o IBIS

Solution
OTC Application Map (1/2)

Platform (*)

Description

ERP (ECC 6.0)

The ERP selected is the Bracco Corporate SAP platform.

Business Warehouse (BW

7.0)

The Reporting Suites selected is the Bracco Corporate

BW & BO platform

IBIS

Certain Sales Sub-processes will be managed in the IBIS

platform and interfaced to SAP

Logistic Provider

Kenco has been selected

Chargeback

iContracts has been selected

Tax Management

Vertex has been selected

EDI

Truecommerce has been selected

Credit Card

Princeton Payment Solution has been selected

Solution
OTC Application Map 2/2
The OTC solution foresees the usage along with the ERP (SAP ECC) of several softwares .
The picture shows the high level Application Map that will need to be discussed and finalized
during the Analyze and Design Phase

Princeton Payment
Solution

Vertex

Truecommerce

Solution
Integration Model SAP ECC, BW and IBIS (1/2)
Following Picture shows the integration between SAP ECC, IBIS and BW.
BW

IBIS
Master Data
Customer
Products
Contract Management

Pricing
Accrual Management
Revenues Calculation
Reporting
Chargebacks

Reporting & KPI

Rebates

Data Transfer
Interface

MM Material Management
SD Sales & Distribution

The need of directing the

invoice from BW to IBIS is
required because of the
volumes and data
complexity required by the
BDI flows.
Bracco Application
Maintenance will ensure the
job meet the required SLA.

FI Finance
CO - Controlling

Revenue Recognition
Accrual
Debit memo
Credit Memo Request
Customers
Materials
Contract Pricing (Unity Feed)

Solution
Integration Model SAP ECC, BW and IBIS (2/2)

SAP MM Material Management

SAP SD Sales and Distribution

Module

Process / Functionality

ACIST

BDI

SAP MM

Materials Management

SAP FI-GL

General Ledger Accounting (G/L Account

Mgmt, Automatic Posting, G/L Transaction
Processing)

SAP FI-GL

Intercompany Payables & Receivables

SAP FI-AR

Customer Invoices Processing & Payments

SAP SD

Sales Order and Delivery Management

SAP SD

Customer Claims and Customer Returns

SAP SD

Customer Credit & Debit Management

SAP SD

Customer Invoicing and Billing

SAP SD

Intercompany Billing

SAP SD

Backorder Processing

SAP SD

Sales Order and Delivery Management

SAP SD

Customer Claims and Customer Returns

SAP SD

Customer Credit & Debit Management

SAP CO

Controlling

10

SAP FI - Finance

SAP CO - Controlling

SAP ECC will own the process

of Materials Management,
Sales and Distribution and
Finance & Controlling (in
addition to the processes
already developed for Unity).

Solution
Finance Cross benefits from FI SD integration
(1/2)
OTC project enable a full end-to-end integration
between Sales and Account Receivable processes
supporting all the critical components of the
process on one unique ERP platform (based on SAP
solution)
Main expected benefits from AR/SD integration
Full ownership and direct control of Finance and Sales processes through
integrated view of all the critical info effecting the entire OTC process chain:

Better Stock traceability (detailed reporting including info from Sales and Finance modules; better
timeliness in monitoring stock level, improved reconciliation capability )
Integrated view on all the components of Credit management process (possibility to block sales
orders, deliveries, cross module reporting )

Improved Data quality:

Direct control and better visibility on customer data info (availability of all the customer master
data info in one single platform)
Better Accuracy/Granularity for all the info critical to monitor the Business from an accounting
perspective
Improved Timeliness for all the relevant AR accounting events (COGS calculation, Revenue
recognition, )
11

Solution
Finance Cross benefits from FI SD integration
(2/2)
Main expected benefits for FI AR processes
Credit management: improved capability to monitor and check all the
components of the credit management process:
Possibility to limit risk of credit exposure (direct control on credit limit management,
blocking sales orders, deliveries, ..)
Better visibility and control of credit exposure at different level (customer, parents)
Improved reporting capability (detailed ageing reporting, dedicated credit
management dashboard)

Cash collecting: ownership and control of the entire process:

Direct control on cash collecting process through direct integration with banking network
(Lockbox integration, dedicated solution for credit card payments)
Availability on the system of all the needed info to support reconciliation processes

Tax management: improved compliance for all the aspects concerning tax
management process through the integration with a best in class software
solution (Vertex):
Better accuracy on tax calculation process (right taxability and jurisdiction code
determination, monthly update and warning message about new tax authority
requirements)
Detailed reporting (reduced audit risk, strategic analysis on specific customer/product
12
categories)

Solution
SAP Organizational Structure
NA00 Bracco North America Operating Concern

Controlling
Area

NA00 Bracco North America Controlling Area

Company Codes

Operating
Concern

BDI
US00 Bracco Diagnostic Inc.
US10 Bracco USA Inc.
US20 Bracco Research USA
Inc.
US30 E-Z-EM, Inc.

ACIST
AC00 Acist Medical System,
Inc.
AC10 Acist Europe B.V.

SMC
SM00
Swiss
Medical
Care
(Bracco
Injeneerin
g)

Plant /
Pur Organization

US21
Bracco
Diagnostic
US31

Inc.
Bracco
Diagnostic
Inc.

AC30 Acist Japan

AC01 Eden Praire

AC00 ACIST US POrg

AC11- Maastricht

US00 BDI POrg

13

AC10 ACIST EU POrg

13

CA00
E-Z-EM
CANADA
Inc.
CA10
3023354
Canada
Inc.

AC40 Bracco AMT, Inc.

US04
Bracco
Diagnostic
US11
Inc.
Bracco
Diagnostic
Inc.

EZEM

CA04
Montreal
CA05 Mississip
pi

SM01
(Eden
Prairie)
SM02Maastric
ht
CA00 EZEM
POrg
OTC
Scope

CA00 EZEM
POrg

SAP Organizational Structure

Logistic
Company
Codes

US00
Bracco Diagnostic Inc.

AC00
Acist Medical System

Plant

US04
Bracco Diagnostic Inc.

AC01
Eden Prairie

Existing
Storage
Location

GE01

BB01

General
Electric

Braun

UPS1
UPS

New
Storage
Location

HO0
1
Hollister

CA01
Canada

EP01

UPS

Eden
Prairie

UPS
Others

US04
Monroe
Township

KE0x

KE0x

Kenco

Kenco

BDI

14

14

..
..
..

ACIST

SAP Organizational Structure

Sales
BDI Customer Service Area
Served by Kenco Location
Created under ACIST Plant

AC00

les
Sa rg.
O
n
tio
u
b
i
el
str ann
i
D h
C

BD00

ACIST Sales Org

BDISales Org

Z5

Z6

Z7

Z5

Z6

Intercompany

Third Party

BDI Distribution

Intercompany

Third Party

Served by Kenco Location

Created under BDI Plant

ACIST Domestic A/R

BDI A/R

BDI Account Receivable Area

New Sales Entities

created for OTC project
Unity Entities
15

Agenda
Project Introduction
Scope OTC Solution
Project Objectives
Project Plan
Solution
OTC Application Map
Integration Model SAP ECC, BW and IBIS
Finance Benefit from SD-FI/AR Integration
Organizational Structure
External Systems
o Truecommerce
o Kenco
o Vertex
o BW
o PPS
o IBIS

16

Solution
External Systems - Truecommerce Integration 1/2
INBOUND FLOWS
1. Sales Order creation in SAP from a customer EDI850
EDI 850

XML File

New Order

PI

Sales
Order

IDOC

2. ChargeBack Request Creation in SAP from an Icontract

chargeback Request
Wholesale
r Data

Chargebac
k Request

XML File

17

PI

IDOC

Credit
Memo
Request

Solution
External Systems - Truecommerce Integration 2/2
OUTBOUND FLOWS
1. Sales Order confirmation from SAP to Customers via EDI855
Output
Type
(Sales
Order)

IDOC

P
I

XML File

Order
Acknow.

EDI 855

2. Advance Shipping Notice (ASN) from SAP to customers via

EDI856
Output
Type
(Delivery)

IDOC

XML File

PI

Shipping
Notificatio
n

EDI 856

3. Output
Billing Document from SAP to customers via EDI810
Type
(Billing
Doc.)

IDOC

XML File

PI
18

Billing
Doc.

EDI 810

Solution
External Systems - Kenco Integration
The shipping process will take place from the plant/shipping point of Kenco to the
customers ship-to location.
The Delivery is the document that the interface will trigger via IDoc from SAP ECC and
converted in EDI format by SAP PI to WES (WMS of KENCO).
Picking, packing and good issue/receipt data will be triggered via EDI from WES,
converted in EDI format by SAP PI, and posted into the SAP Delivery.

Order

Good
Issue

Delivery

Packing
Picking

Shipm
ent

List of interface objects

Functional area
Process ID
Process
Purchasing
MM-PUR-PO Purchase Order transmission
Purchasing/Inventory MM-IM-GR Good Receipt data transmission
Inventory
MM-IM-ST Inventory Movements
Inventory
MM-IM-PI
Inventory Adjustments (Cycle Counting)
Inventory
MM-IM-GRM Blind Good Receipt
Shipping
LE-SHP-DL Outbound Delivery
Shipping/Inventory LE-SHP-GI Good Issue
Shipping
LE-SHP-RD Return Delivery
Shipping/Inventory LE-SHP-GR Good Receipt from Return Order

EDI
943
944
947
947
947
940
945
943
944

The good receipt will take place in the plant/storage location of Kenco.
The Purchase order is the document that the interface will trigger via IDoc from SAP ECC and converted in EDI format by SAP PI to
WES.
Good receipt, Transfer Posting and Physical Adjustments data will be triggered via EDI from WES, converted in EDI format by SAP PI,
and posted into SAP ECC where, the Material Document are generated.
19

Solution
External Systems - PPS Integration
PPS/Clearin
g House

BDI

(Merchant)
(Merchant)

Sales
Sales
Order
Order
Outbound
Outbound
Delivery
Delivery

Authorization
Request

Authorization
management

Settlement
process

Cardholder
Statement
Update

SAGE

Bank

Billing
Billing
Document
Document
AR AR
Invoice
Invoice
Settlement
Settlement

Incoming
Incoming
Payment
Payment

20

Credit card information will

be managed in SAP using
Tokenizati
on
a
specific
tokenization
tools. This tool will avoid
to
store
sensitive
customer information on
SAP database.
The payment card interface is an
application software that acts as a bridge
between SAPs System and financial
institutions software. SAP designed the
payment card interface with remote
function call (RFC) to provide customers
functions to communicate with clearing
houses, banks, credit card companies,
and merchant services.

Solution
External Systems - Vertex Integration
In the United States a tax is imposed by states and local jurisdiction. Tax jurisdiction in SAP
represent government authorities to which taxes are payed.
The external tax system VERTEX is used for the maintenance and the update of the tax rates.

Sales Order
Creation/Billing

Invoice
Verification

Master Data

A call to Vertex is triggered during the pricing execution in

SAP to retrieve (on a line item basis) the correct tax rates
depending from: ship-to jurisdiction code, material tax
classification, plant and freight condiction. Customer
invoices will be released to FI automatically and tax
percentages provided by Vertex are used to calculate the
tax amount
in FI
document.
During
sales
invoice
verification Vertex sends to SAP the
right tax percentage which have to be applied in the
accounting document. Sales taxes are automatically post in
finance.
The tax jurisdiction code is relevant for all master data that
contain an US address (Example: customer, vendor, plant,
cost center, profit center). During master data
creation/updating SAP sends to Vertex an RFC with the
relevant address information needed to determine the right
jurisdiction code to store in the master data.
21

Solution
External Systems - Focus on BW IBIS Interface
Following Picture shows the integration between SAP ECC, IBIS and BW.
BW

IBIS

Staging
*
Tables
Invoice Delivery

Sales
Order

Invoice
pricing

Invoice Header
Invoice Detail
Invoice Pricing Conditions
Delivery Header
Delivery Detail
Sales order Count
Open Sales Order

MM Material Management
SD Sales & Distribution
FI Finance
CO - Controlling

Data Transfer
Interface
22

Revenue Recognition
Accrual
Debit memo
Credit Memo Request
Customers
Materials
Contract Pricing (Unity Feed)

Solution
External Systems - IBIS Integration
Following Picture shows the integration between SAP ECC and IBIS

IBIS

Customer Master
Pricing

Customer Master

DEBMAS
Idoc

Pricing

COND_A
Idoc

IBIS will send two different Idocs in SAP ECC system to post:
-

DEBMAS Idoc Message type for Customer Master Data

- General Data view;
- Sales Data View;
- Legacy Data View (Custom Fields);
- Company Data View;
- Credit Account Data.

COND_A Idoc Message type for Pricing Condition Record

- Air Freight (Conditions ZFR6 and ZFR7)
23

Decision #1 Chargeback Solution

- Capability outline -

Description

Chargeback processes are currently managed through

UPS system.
Insourcing OTC processes requires a replacement of
UPS chargeback system and processes

24

4,
5

Benefit

Chargeback capability is a prerequisite to run OTC

processes in the US market.

Analysis
Dimension

Alternative 1:
Insource Build

Alternative 2:
IContracts
Hybrid

Requirements
Coverage

Full coverage

Full coverage after

customization

Full coverage

User Interface

Custom Built
application

Mirrors IBIS UI

Complex

Data Architecture /
Complexity

Based on IBIS
architecture

Mirrors IBIS
architecture

Complex

Flexibility

Fully flexible for new

requirements

Open to customize per

Bracco requirements

No customizations allowed

Maintenability /
Upgrades

Costly and risky to

maintain (skill
dependency)

Cloud solution

On premise (SW/HW to be
maintained internally)

Cost

Implementation 500K$
Recurring 60K$ (*)

Implementation 250K$
Licenses 80K$
Recurring 80K$ (*)

Implementation 780K$
Licenses 500K$
Recurring 90K$ (*)

Risk / Timing

Not feasibile within OTC

timeline. No
experience in-house

Market leader low

risk
Recommended scenario

Market leader low risk

(*) Starting 2014 SW recurring expenses will be coded to respective budgets

These costs are reflected in ROI but not in project budget

6,2
5

Alternative 3:
Model N Hybrid

4,2
5

Decision # 2 EDI service provider

- Capability outline -

Description

EDI processes are currently managed through UPS

system.
Insourcing OTC processes requires a replacement of
UPS EDI system and processes.

EDI capability is mandatory to exchange

transactions with 35 different BDI trading partners
(50% of the sales orders)

Analysis
Dimension

Alternative 1:
Insource

Requirements
Coverage

Full coverage

Good coverage

Full coverage

User friendliness

Not planned to
develop a highly user
friendly EDI solution

Good

Very good easy to handle

also for a business user

Support &
Services

Full coverage

Same

Same

Tools and
resources

Full coverage when

capability is
developed

Full coverage EDI market

leader

Good coverage

Trading partner &

Pharma
experience

No prior experience in
house

Very limited pharma

experience

Strong Pharma experience

and 60% of Bracco trading
partners with established
connection

Cost

25

Benefit

Risks

4,
0

Alternative 2:
IBM/Sterling
Commerce

4,
0

Alternative 3:
True Commerce

Implementation
Implementation 196K$
Implementation 98K$
155K$
Recurring Cost 7400$/month
Recurring Cost
2013 Salaries 383K
(*)
1600$/month (*)
Recurring Cost
Recommended
31.900$/month
(**) expenses will be coded to respective budgets These costs are reflected scenario
(*) Starting
2014 Services recurring
in ROI but not
in project budget
Resources
to be
Market
low
Market
leader
(**) Salaries
start in 2013
andhired
are not charged to the
projectleader
budget,will
berisk
charged to the annual salary
budget

low risk

6,
5

Decision # 3 Tax application

- Capability outline -

Description

US taxes are managed at jurisdiction code level. Hundreds of

tax codes need to be maintained and updated regularly.
Tax application and service capability allows integrating the
OTC solution with an external application managed by
leading vendors in this domain that guarantees the right
taxes are applied at transaction level

Analysis
Dimension

Alternative 1: Vertex

Requirements
Coverage

Full Coverage Market leader provider

Full Coverage Market leader provider

User friendliness

Very good

Good

Support & Services

Provides both implementation and

consulting services.
Performed very well during RFP and
Orals.

Very low quality service demonstrated

up to now
Proposal not submitted, unwilling to
offer consulting services

Cost

Implementation 100K$
Licences: 80K$
Recurring cost: 45K$/year (*)

Implementation 300K$ (**)

Licences: unknown
Recurring cost: unknown

Risks

Very low market leader solution

Solution well established on the market

but low support demonstrated by the
vendor up to now

Recommended scenario

26

Benefit

Full compliance for BDI and ACIST

Reduction in day-to-day operating expenses through
complete automated management of complex and laborintensive tax processes
Seamlessly interfaced with SAP making implementation
efficient and cost-effective
Better visibility into tax processes, which will aid audit
preparation and support strategic financial decision
making

4,0

Alternative 2: Thompson
Reuters

(*) Starting 2014 SW recurring expenses will be coded to respective budgets These costs are reflected in ROI but not in project budget
(**) Based on ACN US benchmark, since TR often delivers consulting services in partnership with ACN US

2,5

N/A

Decision # 4 Credit Card payment

- Capability outline Benefit

Description

Payment interface software that provides PCI-Compliant

encryption and tokenization of customer credit card
numbers.

PCI Compliancy for BDI and ACIST

Reduction in credit card transaction fees due to discounts
available by providing additional data to customers.
Automated processing of charges reduces errors.

Analysis
Dimension

Alternative 1: Paymetric

5,2
5

Requirements
Coverage

Full Coverage housed and maintained

offsight

Full Coverage housed and maintained

offsight

User friendliness

Very Good

Very Good

Support & Services

Implementation and consulting services.

Hosted Server maintains all credit card
numbers.
Includes 5 User Access Setups

Implementation and consulting services.

Hosted Server maintains all credit card
numbers.
Includes Unlimited User Access Setups

Integration

Seamless integration with SAP

Seamless integration with SAP

Credit Card
Processor Services

Requires additional third-party to provide

credit card processing and banking
services

Provides Credit Card Processor Services

and will monitor to maintain the lowest
changes.

Reporting

Non-detailed reconciling reporting

available

Detailed reconciling reporting available

Cost

Implementation/Consultation = $52K
Monthly Fee = $2,300
5 Additional User Setups = $500/mth

Implementation/Consultation = $10K
Recommended
scenario
Monthly Fee
= $2,000

Risks

Low Risk Market Leader

Low Risk Market Leader

27

Alternative 2: Princeton
Payment Services (PPS)

7,5