Independence, in name and fact

The leadership of a new, marquee pharma manufacturer company approached KPMG with a paradox: It was certainly marquee, but not new. As the highly publicized spin-off of a global health services conglomerate, the company began life with $18 billion in annual revenues, an established product pipeline and instant membership in the S&P 100. Reliant on the back-office functions of its former parent, it needed to quickly acquire the operational sinews of a truly standalone company.

During an intensive three-year engagement, KPMG designed and put into place new core processes for finance, operations, and human resources, all of which was enabled by new ERP and HCM systems. The multidisciplinary assignment eventually touched the lives of every one of the company’s 21,000 employees, in 170 countries. And as KPMG delivered tangible results, something intangible emerged—a new company culture, independent in name, spirit and operational fact.

KPMG worked with client leadership to forge, from scratch, an operational “spine” precisely tailored for a new single-purpose business mission. The work synergized KPMG expertise in process, technology, people and change management. Benefits include:

• leading-practice models for operations, outsourcing contract structures, automation, shared services, process design and centers of excellence now established

• as a foundation for future activity, deep functional understanding of end-to-end process design and training embedded within the client organization

• centralized reporting, based upon a single, global enterprise resource planning platform that includes specifications to meet requirements at the local, manufacturing-plant level.

Working together with client leadership, KPMG developed a foundation target operating model—based upon standardized processes, automation, globally integrated reporting, and shared services delivery—to continuously inform 80 specific assignments within the master engagement. KPMG:

• replaced 36 legacy systems and multiple applications with a single, global SAP enterprise resource planning platform

• for the Finance, HR and IT functions, developed model workflows, built role specification and skills profiles, and hired and trained all new employees

• designed, built, tested, and deployed more than 140 new operating procedures

• supervised the structuring of outsourcing contracts, the selection of a global shared-services partner, and the launch of a global network of shared-service delivery centers.

We understand the predictable—and unpredictable—stages of spin-offs

While M&A spinoffs are typically singular events for leadership in newly-independent entity, they typically unfold in foreseeable stages. KPMG insight gleaned from similar assignments can help clients anticipate and navigate developments as they move towards their goals.

Global carve-outs require extraordinary partnership

As the strategic pendulum swings towards corporate dis-aggregation, clients set upon divestiture need partners that can combine global scale, breadth of specialty offerings, and ability to execute at speed.