AbbVie Builds a Global
Systems Infrastructure
Name: Kowsar Ahamed
ID: 2021-1-95-062
Course: MIS-501
Story of Global SAP ERP Implementation
By A New Company AbbVie
SUMMARY POINTS OF THE CASE
• AbbVie is a global research-based
biopharmaceutical company that was spun
off from Abbott Laboratories in January
2013.
• AbbVie inherited 50 or 60 disparate legacy
systems that were supporting missioncritical processes in over 100 worldwide
locations.
• Those Legacy systems were supported by
Abbott under a transitional services
agreement (TSA) and were due to be
terminated at the end of 2015.
SUMMARY POINTS OF THE CASE CONT.
• AbbVie’s management had to make a
choice: Either run these legacy systems
or invest in a more up-to-date platform.
• AbbVie decided to create standard
business processes with a single
instance of SAP ERP across the globe.
• AbbVie designed a new operating model
& selected IBM consultants Services to
guide the global SAP deployment.
SUMMARY POINTS OF THE CASE CONT.
• Standardized end-to-end processes
using a global SAP template, customized
for country-specific requirements that
were identified in advance. So, the need
for future customization was minimal.
• AbbVie tested the effectiveness of its
global template during development,
capturing metrics, and investigate to see
if there was a process that needed to be
changed.
SUMMARY POINTS OF THE CASE CONT.
• Project team also migrated data from
different legacy applications to the data
structure for the global SAP ERP system.
• Country-specific transition leaders train
users on the template and familiarize
them with any process changes.
• In May 2015, the company completed
the global rollout of SAP ERP, and
successfully standardize global
processes.
WHAT MANAGEMENT PROBLEMS TYPICAL OF
GLOBAL SYSTEMS WAS ABBVIE
EXPERIENCING?
Q1(1
)
LEGACY SYSTEM LIMITED SUPPORT
•Inherited 50 or 60 disparate legacy systems that were
supporting mission-critical processes in over 100 worldwide
locations.
•The legacy systems were supported by Abbott under a
transitional services agreement (TSA) and were due to be
terminated at the end of 2015.
DECISION MAKING MANGMENT PROBLEM
•AbbVie’s management had to make a choice: Should the
company continue to run these legacy systems on its own.
•Or it invest in a more up-to-date platform for supporting
business processes across all of its global affiliates and
manufacturing locations.
WHAT MANAGEMENT, ORGANIZATION, AND
TECHNOLOGY FACTORS WERE RESPONSIBLE
FOR THOSE PROBLEMS?
Q1(2
)
FACTORS RESPOSIBLES FOR PROBLEMS
•AbbVie is still a new and very large company, with
19 research and manufacturing sites across the
globe to manage effectively.
•Inherited 50 or 60 disparate legacy systems will
need critical attention after TSA end with Abbott.
•New SAP ERP system need to be functional in less
than 3 years & employees need to be trained for
successful transition to the new system.
•For New System country-specific requirements
need to identified in advance to made the
template usable globally.
•Technological Capabilities in All located countries
needed for Successful implementation and use of
ERP system.
WHAT ELEMENTS OF THE GLOBAL SYSTEMS
STRATEGY DESCRIBED IN THIS CHAPTER DID
ABBVIE PURSUE?
Q2
AbbVie had only until the end the of 2015 (three years)
to establish an infrastructure stipulated by TSA. the
project was very ambitious. The new system had to be
globally operational in more than 150 countries within 3
years.
ELEMENTS OF GLOBAL SYSTEMS
STRATEGY ABBVIE FOLLOWED:
•International information systems architecture to
Communicate and run operation in 150+ countries.
•Multinational strategy to concentrate financial
management and control in home base while
decentralizing other operations in other countries.
•Introducing changes in business processes.
•Coordinating system development and releases.
•The Management Solution: Implementation
HOW DID ABBVIE’S NEW SAP ERP SYSTEM
SUPPORT ITS GLOBAL BUSINESS STRATEGY?
Q3
NEW SAP ERP SYSTEM SUPPORT
GLOBAL BUSINESS STRATEGY
•Activities facilitated change management by placing a
high value on both system transparency and training.
•Country-specific transition leaders would train users on
the template and familiarize them with any process
changes.
• Created a standard business processes for all of its
affiliates and manufacturing facilities and to support these
processes with a single instance of SAP ERP across the
globe.
•Took the time during implementation to verify it was in
compliance with all local data privacy regulations.
•In May 2015, the company completed the global rollout
of SAP ERP, Successfully standardized global processes.
HOW DID ABBVIE’S NEW SYSTEM IMPROVE
OPERATIONS AND MANAGEMENT DECISION
MAKING?
Q4
NEW SYSTEM IMPROVE
OPERATIONS AND MANAGEMENT
DECISION MAKING
•The company standardized end-to-end processes using
a global SAP template, usable globally updating it on a
country-by-country basis depending on local regulations.
•So, the need for future customization was minimal.
•The global SAP project team questioned existing
processes and found it could streamline many of them,
making the enterprise much more agile.
•The new system has a set of key metrics that are
measured at the end of every month, every country, to
find the root cause of problems, and take corrective
action more easily.
•business efficiency also improved because corrective
actions often led to additional process improvements.