Digital Transformation on Financial Operations

Digital Transformation on
Financial Operations
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Zahre Cinibulak

Our Vision ”Health for all, hunger for none”
Bayer is a life science company
and a global leader in health care
and nutrition. Our innovative
products support efforts to
overcome the major challenges
presented by a growing and aging
global population. Guided by our
corporate purpose “Bayer:
Science for a better life,” we help
to prevent, alleviate and treat
diseases. We are also making an
important contribution to
providing a reliable supply of
high-quality food, feed and
plant-based raw materials, while
at the same time promoting the
sustainable use of natural
resources. Our business activities
therefore also support the
attainment of the United
Nations Sustainable
Development Goals.
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Our Business Areas
Crop Science
Pharmaceuticals
Consumer Health
Innovative chemical & biological
crop protection, seeds & traits,
digital technologies & services
Prescription products for cardiology,
women’s health care,
oncology, hematology, ophthalmology,
radiology and other areas
Non-prescription medicines in the
categories of dermatology, nutritional
supplements, pain, cardiovascular risk
prevention, digestive health, allergy,
cough & cold and other areas
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Bayer Group Key Data
Full-year sales
€44.1 billion
Countries
83
Employees
99,637
As of December 31, 2021
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Financial
Operations
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2022

Zahre Cinibulak
Bayer Journey
Definition
Commercial
agreement
Order-to-Cash (O2C) refers to the process from registering established commercial agreements, credit
conditions, fulfilling a customer order and receiving payment including collection activities
Customer
master data
management
Credit
management
Order
management
Scope
Order
fulfillment
Billing
Collections
and disputes
management
Accounts
receivables
management
IT Consulting in
Transactional
Accounting
2014
2009
BHC CH/PH
Finance &
Controlling
Commercial
agreement
registration and
transfer
Commercial
agreement
monitoring and
care
Setup customer
accounts
Validate and
update customer
data
Customer risk
assessment
Credit limit
management
Manage
sales
orders
Manage
complaints
Initiate country
stock transfer
Initiate
local
delivery
Issue
invoices
Manage customer
rebates /
incentives
Manage
collections
Manage disputes
Customer account
maint. and recon.
Manage remittance
advice
IBO O2C
GPM for CCD
CH/PH/CS
2017
Regular financial
statement monitoring
Credit
insurance
management
Manage
returns
Customer delivery
confirmation
(track and trace)
Manage customer
debit / credit
memos
Cash allocation
Value adjustments
2019
IBO GPO for
CCD CH/PH
Period end
activities incl.
Audits
O2C GPO
FinOps CH/PH
2021
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Starting point AR & Credit Management- History
Working Capital Initiative
2008
Initiative started with focus on WoC
Receivable had to contribute
2008-2017 Approach
Receivable Action Items and
Measures
Challenges 2011
Implementation Credit
Management 2013
Reduction of overdues
Harmonization of Payment Terms
Etablishment of Golden Rules
CH/PH- no central credit mgmt.
No global community, no guideliness
No standard process or system
11 Legal Creidt Management
Scorceard 1.0 for 170k Customer
Increase of transparency (less ICS)
What next? 2017
Increase of community CS joined
Need: Automation/Standard in B2C
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FSCM Big Bang – Credit Management 2018
Transformation Overview & Scope
FSCM (Financial Supply Chain Management) – implemented in all PBC (CS) & P2R (CH/PH) countries
Overview
FSCM is a solution to manage highly automated the order-to-cash cycle which involves evaluating the customer credit,
resolving billing disputes, collecting overdue accounts to ensure timely receipt of payments, as well as a healthy
operating cash flow.
Project scope: enhancement of existing FSCM Credit and Collateral Management Module
IT infrastructure
SAP FSCM
Process Level 1 Process Level 2 Main New Functionality
Customer risk
assessment
Risk Class Change Approval – requests and approvals in SAP
Integration of customer financials (semi-automatic)
Credit limit Request (CLR) and Risk Class Request (RCR)
functionality to approve or reject decisions
Credit Management
Enhancements
Credit Management
Credit limit
management
Documented Credit Decision (DCD) functionality to approve or
reject release of credit blocks
Improved Business Partner management using Global, Regional
and Local Responsibility Level
Credit integration of Collateral Management (Guarantees, Barter, ..)
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20 Healthcare
Big Bang - Credit
Management Scope
25 Countries
18 Crop science
34 Healthcare
55 Legal
Entities
21 Crop science

Overview Credit Management Processes
Global view
Master Data Maintenance
Credit Profile
Global Financial Data
Credit Segment
Relationships
Credit Limit
Key Figures
Collaterals Management
Credit Check
Cockpit
Score
Risk Class
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Go live with 80% of
automatic decisions in 2020
Scorecard 2.0 for more automation and risk mitigation
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Development History – Data Available for automated Decisioning
2021
SAP FI Core
Open Items
BSID
Closed Items
BSAD
SAP Collections Management
SAP Disputes Management
Collection
Strategies
Collection
Profiles
Dispute Case
Creation
Dispute Case
Processing
Ratings, Scores, External
Payment Experiences,
Financials
…
D&B
Squid
Middleware
D&B
Portfolio
Manager
D&B Data
Integration
Toolkit
Collection
Work-lists
Process
Receivables
Prepare for
customer contact
Document
Contacts
SAP Credit Management
Credit Limit
Management
Credit Rules
Engine
Credit Manager
Portal
Credit Case
Tracking
Credit
Information and
Interfaces
SAP
Collections
Manage-ment
SAP
Credit
Management
Receivables
Management
SAP Disputes
Management
Billing
&
E-Invoicing
Dispute
Resolution
Integration with
Finance /
Logistics
Workflows
Reporting
Billing & E-Invoicing
Creating Invoice
and due Item
Present E-Invoice
Create Invoice
Pool
Receive
Customer
Payment
Other
external
provider
Bayer FIS / Term
Open Items
FKOI
Closed Items
FKPI
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Starting point AR & Credit Management
Big Bang Credit 2018
No harmonized process cross division
No automation
Success
Creation of an expert team
Transparency on global/local level
2018-2022 Approach
NEW Scorecard 2.0
Full automation
Better risk overview
Data!
What next? 2022
S4/HANA
Maschine Learning /AI
ESG, CAMPT, Blockchain
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S4/HANA Project
Like many other companies, Bayer has started to create a ‘digital core’ based on SAP
S/4HANA
What is happening in the industry?
What is happening at Bayer?
SAP is replacing it’s 25+ year old ERP software,
moving from a monolithic to a modular architecture
and a cloud based approach.
Large number of companies are either implementing
or evaluating S/4HANA as their new ‘digital core’, main
drivers are:
Efficiency e.g. standardization and consolidation.
Integration e.g. readiness for Mergers &
Acquisitions (M&A).
Digitalization e.g. future business models,
collaboration with partners, data insights for
decision making, open innovation.
Bayer is embarking on a major digital transformation
journey but today’s highly tailored system landscape
is reaching it’s limits to support this agenda, e.g.:
Integration of new business models and capabilities
is increasingly costly and time consuming (i.e.
Outcome-based pricing).
Data is often inconsistent and distributed across
multiple sources.
Further investments into our old system landscape are
no longer sustainable.
We have started the in 2019, evaluating the
opportunities and confirming key design questions
introduced by SAP S/4HANA.
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Contact
Zahre Cinibulak
Global Process Owner Financial Operations
e-mail:
Zahre.Cinibulak@bayer.com
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