Merck's Shared Services strategy: Good data is key ingredient

Australasian SSO Week 2013: Exclusive speaker insight – Creating the intelligent enterprise

Ahead of SSON’s 16th Annual Australasian Shared Services & Outsourcing Week, taking place in Melbourne in May 2013, I’ve been speaking to the speaker line up to get their exclusive insight on some of the topics set to be discussed at the conference in March. Sanjay Patel is Executive Director of Asia Pacific and Japan Regional Shared Services for Merck & Co. Inc. (Merck), and the international opening keynote at this year’s event. He is also the 2012 winner of SSON’s Outstanding Contribution to the Industry Award for Asia. Merck is one of the top pharmaceutical companies globally and it is Sanjay’s role to lead the shared business services, the multifunction shared services for Merck in Asia Pacific and Japan. I wanted to speak to Sanjay about what he sees as key to this year’s theme – creating the intelligent enterprise – and get a taster of some of the experiences he has learnt from Merck.

SSON: What does the Intelligent Enterprise mean to you?

Sanjay Patel: Shared Services organisations are uniquely positioned to leverage the vast amounts of diverse data that power end-to-end business processes, such as Accounting to Reporting, Order to Cash, Procure to Pay, and Hire to Retire, etc. Being a shared services organisation is no longer just about cost-cutting, now the real value lies in the transformational capabilities that it offers for organisations that want to drive change and improvements.

There is a growing trend towards traditional shared services organisations that possess these end-to-end process expertise and have access to vast amounts of data, to capitalise on this opportunity and transform themselves into an "intelligent enterprise" by moving up the value chain and be seen less as back office operators, and instead more as an intelligent enterprise that provides new service offerings, such as Business Analytics and Insights that assist stakeholders in answering strategic business questions.

An intelligent enterprise, to me, would be an organisation that is connected and collaborative and excels at utilising its information assets, advanced analytical models and visualisations to maximise value for its customers and stockholders by allowing them to make fast, informed decisions.

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What are some of the biggest challenges you’re faced with in helping achieve this more strategic service?

In the area of Business Analytics, some of the challenges include getting access to high quality data, the ability to define what business question needs to be answered, and also finding the right talent.

Good data is one of the key ingredients in gaining insights. Often, in large organisations, gaining access to data may pose a challenge, and even if you do get access to it, questions need to be asked about the integrity/quality of the data, if no formal data governance framework exists. There is also the challenge of extracting data from different ERP systems within the organisation. Most organisations are driving towards one standard ERP platform but you can’t wait for that to happen and need to work with several systems.

From a stakeholder perspective, it is important to articulate what business question(s) needs to be answered, as that would determine the data (or data sets) you would need to help with the analysis.

Finally, finding the right talent in establishing an analytics team often poses a challenge, as the demand for these talents is high and supply is scarce. It is important to find individuals who have deep functional and data knowledge, and proven and innate ability to engage stakeholders and use information to solve business problems as part of collaborative teams.

They also need to be effective at communicating the results of the analysis to their stakeholders, i.e. possess the ability to tell a story with data.

If you are starting up an Analytics capability, it would be advisable to start off with a few simple projects that can deliver measurable benefits quickly and help demonstrate your capability. There is also a need for speed in preparing business analytics in order to add value to business decisions in an increasingly fast-paced business environment. This would help in establishing credibility and trust with your stakeholders and build a foundation upon which you can build a successful intelligent enterprise.

How do you think organisations should be harnessing the wealth of information that can be applied to the organisation?

To me, it is important to first have a very clear vision on how the organisation wants to harness this information and what is the value proposition or differentiating factor you are trying to create. Before embarking on a journey to create any Analytics capability, it is important to have a robust data governance framework, because without strong, clean data or reliable data, the business analytics capability may not be very effective in providing valuable or reliable insights.

In defining the data governance framework, it is important to establish for every data type (e.g. customer, vendor, financial, employee, product, etc.) who the process owner for that data type is. The process owner needs to establish the information policy and information quality goals and communicate desired behaviours and value proposition. Secondly, define who will play the role of the information or data steward. This is the person or the group who will be responsible for ensuring that there are clear policy rules around how the data should be set up; who has access to it, what will be the process to ensure the data remains clean when it goes in the system and when it comes out of the system and finally, the person or group who will have operational stewardship of the data, i.e. create and maintain content in the system.

As it relates to Business Analytics, it is important to bear in mind the following as you start your journey:

• Engage stakeholders on the business questions they need answered to support business strategy
• Nurture a culture that values new ideas, from anyone, anytime, anywhere
• Seek opportunities for advanced analytics, highest ROI comes from predictive, simulation and optimisation models
• Identify initiatives or projects that help drive revenue, optimise or reduce costs and optimise working capital
• Focus on realisation of value, value usually comes from change (policy, service levels, processes, etc.)
• Leverage analytics as a powerful motivation for high data quality

Advertise the capability and demonstrate the results, however don’t underestimate the difficulties in operationalising the analytics model and embedding them in your end-to-end processes.

Why do you think it’s so important for people to attend the 16^th Annual Australasian Shared Services and Outsourcing Week?

For me, there is a few things. Firstly, it is always good to network with your peers in the industry who are doing similar things and learn from each other, because a lot of the ideas can be easily replicated in other organisations. The peer networking is one of the big benefits and I would recommend professionals go and attend this. Secondly, you get to learn from a sales side what are some of the new tools, technologies or capabilities that are available that could make you more efficient as a shared services organisation. Thirdly, picking up on some of the best practices that are available to bring back to your organisation and be able to apply them. I attend once a year the event in Singapore and coming out of that event is always beneficial.

You can hear more from Sanjay Patel when he opens the Australasian SSO Week 20^th May 2013. Sanjay will be delivering a presentation around the topic ‘CREATING THE INTELLIGENT ENTERPRISE – CHANGING RHETORIC INTO REALITY’.