Case Study: Johnson & Johnson Medical Ltd
Profile
Johnson & Johnson is the world’s most comprehensive and broad-based manufacturer of health care products, as well as a provider of related services, for the consumer, pharmaceutical and medical devices and diagnostic markets.
Industry
Health care products
Business Intelligence Requirements
- A solution with the flexibility to adapt to Johnson & Johnson’s processes • One common platform for planning, reporting and web deployment
- Link seamlessly with SAP
- User-friendly and intuitive
- Audit trail and workflow capability
- Owned by Finance division
- Economical and fast implementation
- Seamless integration with Excel and MS Internet Explorer
- Scalability and performance
- Comprehensive security with simple maintenance
- Competitively priced
Previous System
Excel spread sheets
Solution
SPF Plus; Applix TM1 server
Benefits
- Dramatically reduced planning cycle
- Rapid consolidation time 15 seconds or less
- Low IT support
- Freed up business analysts
- Very short implementation time frame
- Short-term ROI and payback
- Currently extending the technology to other BI requirements Other problems included:
- Lacking underlying detail or assumptions
- Many hours spent creating, populating and distributing spreadsheets
- Reporting deadlines weren’t met
- Payroll data centrally managed (problem for remote users) for allocations and consolidations
- ‘What if’ analysis extremely difficult and time consuming so never performed
- 14 hours to consolidate budgets
- In excess of 250 password-protected spreadsheets created
- 80% of time spent compiling data, 20% spent analyzing “We concluded that improvements in the whole process could only be achieved via technology,” Peter states
“With the SPF Plus/TM1 solution, we have what we need. And our investment in the product has already paid for itself.” Peter Reitano, Financial Controller
Tangible Benefits
“Two of the greatest benefits of the solution have been the speed and power of calculation, in addition to the high level of accuracy,” Peter Reitano says. “And it meant that I completed my 2002 business plan three weeks ahead of schedule.” On the strength of this, Peter received the ACE award (Achievement in Corporate Excellence) for considerably reducing the process time of the business plan and providing greater accuracy and flexibility.
“Flexibility was also paramount. We have complex customer and product hierarchies — both internal and external — and with this solution it’s just a matter of drag and drop and it’s done. Another key benefit is that it has enabled users to be more self sufficient, thus freeing up the time of our business analysts.” “With the SPF Plus/TM1 solution, we have what we need. And our investment in the product has already paid for itself.”
Business Scenario
Johnson & Johnson Medical has a very complex budgeting system, with 18,000 products, more than 4,000 customers and 250 cost centres.
Prior to 2001, all budgeting was done using Excel spreadsheets. According to Peter Reitano, this made consolidation very difficult. “I would use Excel macros to consolidate and this took between 10 and 14 hours to complete — an enormous time constraint. Another issue was correcting any inaccuracies made by those inputting the figures,” Peter explains. Johnson & Johnson Medical
Business Solution:
In December 2000, an evaluation team began reviewing a number of products, of which SPF Plus/TM1 was just one. This was then pared back to two products, based on their meeting Johnson & Johnson’s overall requirements.
“In the sales demos, other software and Applix products appeared very similar in ‘front end’ functionality, but the superiority of the SPF Plus/TM1 solution was demonstrated in the back end – i.e. the technology,” Peter explains. “We wanted the ability for many users to write to one database and view the consolidated values immediately, NOT propagate databases to users like we did in Excel. Only SPF Plus/TM1 could provide this. Also knowing we can have planning, reporting and web deployment using just ONE database with SPF Plus/TM1 was significant. Other vendors were offering up to three different databases. SPF Plus/TM1’s overall costs to implement was also a deciding factor”. A key feature for Peter was the ease of implementation. “My original intention was to purchase 20 days of consulting and the SPF Plus/TM1 consultants would set the system up. However, I began playing around with the solution and we ended up doing around 95% of the implementation ourselves. We were implementing and utilising the product at the same time.”
There were two initial phases to the project: Budgeting & Forecasting — To produce top quality forecasts and updates, by spending less time on the mechanics and more time on value-add analysis, including scenario comparison and modelling.
Monthly Reporting — To produce an electronic monthly reporting package which includes Departmental Expense Reports, Income Statements (Divisional and Regional), Sales & Gross Profit Analysis, etc.
Other Requirements Included:
- Flexibility, enabling either data or hierarchy structure changes to be made quickly and easily with no interruption to end users
- A complete solution (a one-stop-shop for all information)
- Electronic monthly reporting removing the need to re-key ANY data
- Not dependent on a single person
- Easily accommodate remote users
- No “processing” to consolidate
- Strong software provider support
- The ability to publish web reports directly from Excel
- Collaborative budgeting and forecasting (including “bottom up” data capture, or user input, and “top down” revisions)
- Integrity, reliability and auditability of the data
- Flexible and user-friendly front end reporting
- Versioning/“what if” scenarios (essential from a forecasting perspective)
- High level of security over different aspects of the data (e.g. users could only see their part of the “world” and would be restricted eg from seeing salary data lying behind the budgets)
- Scalability and performance
- The ability to extend the technology for our other BI requirements such as reporting, balanced scorecard, sales forecasts, demand planning etc.
Future plans:
“Over the next 12 months, the plan is to really push the capabilities of this solution. “We have so much more power with SPF Plus/TM1, the boundaries of Excel are now very clear and we have surpassed them 10 fold.”