What we’ve learned on project management around large-scale implementations

How an exercise to replace a soon-to-be-obsolete cash management system at Merck turned into a wholesale re-engineering of its treasury technology

When Merck group treasurer Rando Bruns and Jörg Bermüller, head of cash and risk management, learned the supplier of their cash management system was about to withdraw the product, they hoped they would be able to replace it like-for-like.

In fact, Siemens’ withdrawal of Finavigate led to a complete rebuild of Merck’s treasury technology infrastructure touching every area of treasury’s technology. “We had the perfect set-up – Finavigate and the risk management system, Quantum. Where we had one set-up, with two systems, we now have seven systems and service-level agreements with multiple suppliers,” says Bermüller.

The first part of Merck’s journey towards replacing Finavigate was a year of dialogue with Siemens. “We analysed various options, but then had to realise we would have to go through a wholesale review and redrawing of treasury technology,” says Bruns.

The first phase was market analysis – a two-year period looking across the market for cash, risk and treasury management systems.

The second phase was creation and design – working with vendors detail by detail. This involved significant back and forth with all the parties tendering.

“We had to educate vendors to implement new features not in their product’s scope. Over the two years, there were something like 100 workshops. You are working towards a statement of works and that is quite some exercise in itself, because you’re getting multiple vendors to align on the detail,” says Bruns. “Not doing so risks a set-up that doesn’t cover all requirements, a potentially costly outcome. It’s a very weak point in a negotiation if, at the time you sign, you have to discuss add-ons. If you don’t put in the time, you will incur more costs – 100%.”

Then came a two-year implementation and build process. The biggest consideration here was Merck’s 400 subsidiaries worldwide that are part of the pharmaceutical company’s cash management operation. Merck’s approach was to centralise as much as possible to minimise the impact on subsidiaries, so it gave them a testing and training period followed by a go-live the following month.

“It was a clear principle from the start. We wanted ‘plug and play’ and it paid off. Our subsidiaries were very happy with the process,” says Bermüller.

People power

The overall project involved the whole treasury team of 20 people. “With treasury, we have our own IT support, and they shouldered much of the responsibility, but that is why we had a good result. It helps in project management if you are largely in-house; it means the expertise is stable,” says Bruns.

Without doubt, you need a dedicated team. “There were many obstacles and a lot of doubters particularly on the vendor side,” says Bermüller, “but because of our approach and our team, we found creative workarounds for problems and we’ve reached the end of the project on time and on budget.”

Key lessons

  1. For a large-scale project like this one, allow sufficient time and resources. If you underestimate the resources you need – particularly time – you will fail. This premise needs to be communicated to all stakeholders and to your boss.
  2. Try and keep knowledge and expertise within the organisation by involving your team and other in-house resources as much as possible.
  3. Direct plenty of time and resources at the early stages of the project – the concept and the statement of works.
  4. Communication needs to be regular and to all stakeholders. That way, you avoid surprises.
  5. High-calibre people are essential.
  6. Prioritise and be realistic about what can be achieved besides the project. Acquisitions or compliance matters will not wait, but other tasks may have to be turned down. Learn to say no.
  7. Centralise the work as a means of minimising impact on subsidiaries.

Above all…

For large-scale projects such as this one, expect the unexpected, but with a highly qualified internal team, you will make it.

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