Eli Lilly and Company, one of the world’s largest pharmaceutical companies and consistently rated as one of the best companies to work for, in 2010 set out their Global Services Design (GSD) vision for the whole company which included, to:

• bring all affiliates onto a global single version of SAP.
• optimise and leverage global process standards 
• establish four new Shared Service Centers (SSC’s)
• expand utilisation of Business Process Outsourcing
• accommodate for local legal and regulatory exceptions where needed.

With great determination, Lilly then implemented this world-wide vision in less than three years.

Regional Banking and cash management project
The Regional Banking and Cash Management project was part of the implementation of the overall GSD project. Giuseppe Rossi-Espagnet, EMEA Cash Manager & Implementation Lead, at Lilly described the project in his talk at Eurofinance’s October 2013 Conference in Barcelona. 

The project objectives were to achieve top tier capability and performance fully leveraging bank relationships to meet Lilly needs, and to optimise global liquidity and returns by:

• standardising and automating payment/collection processes with the support of a single instance of SAP and single interface (SWIFT)
• standardising and automating the upload and clearing of the daily electronic bank statement
• standardising and automating cash concentration and funding of legal entity accounts
• achieving total Visibility and Access to global cash.
• rationalising banks and bank accounts :

1. moving to one bank per region for all transactional activity
2. halving number of bank accounts and reducing bank fees.

The Regional Banking and Cash Management project was implemented across 68 countries and 117 legal entities incredibly from Q3 2010 to early 2013, as the Implementation Timeline shows:

Source & Copyright©2013 -  Eli Lilly and Company

The bank account structure adopted was extremely simple with one bank account per legal entity in the functional currency of the entity:

• combining concentration, disbursements, receipts, & payroll
• centralizing and minimizing account signatories
• enabling a global view of bank fees charged to a standard GL account.
• only exceptions to this framework allowed were statutory or legal policy.

The liquidity structure was also very simple: 1) maximising automated physical cash concentration up to header accounts, and 2) working with the regional bank to optimize returns on trapped cash.

Lessons learnt
At the end of this talk, Rossi-Espagnet listed some of the main lessons learnt on the project:

• the upfront challenges Lilly set for themselves:
  • integrating the Treasury and Cash Management project into the overall Global Services Design plan (SSC, SAP) and GSD planning to implement SAP in 60+ Countries in two years
  • the need to align banking partners delivery into already existing timelines, and the conflict between bank vs. internal development design decisions
  • managing staffing internal teams and within cross-functional teams with multiple parallel phases in development across regions.

• internal lessons:
  • ensure CFO and Treasurer Sponsorship combined with the right level of resourcing
  • need exceptional project management with particular emphasis on communication
  • Business Requirements: need to document requirements; ensure you get sign-off by affiliate, technical team, and bank; Lock Scope, do not allow any increase; and test as much as possible
  • Data Quality: demand specificity from the bank; and spend the time to carryout master data clean up before implementing.

• external partners:
  • Regional Banks - use: intuitive EBS file naming convention; reliable Payment Status acknowledgement (pain002); transaction code uniformity (per pay method across the region); bank SAP certified MT940 format in order to leverage detail level of BTC codes; and consolidated periodic bank statement analysis (xls)
  • SWIFT Service Bureau implementation: ensure data and process integrity; fully test the system redundancies (BCP); and adopt a partnership mindset.

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CTMfile take: Many companies would not even think of such a project, let alone do it. The clarity and simplicity of the vision are impressive, e.g. one version of SAP everywhere, and just one bank account per legal entity in the functional currency of the entity. To successfully implement this vision in 117 entities in 68 countries in less than three years is just amazing. The lessons learnt should be a guide for others attempting large multi-country projects.