Healthcare Company Standardises and Harmonises Business Processes

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1 Microsoft Business Solutions Customer Solution Case Study Healthcare Company Standardises and Harmonises Business Processes Overview Country or Region: Germany Industry: Healthcare Product Provider Customer Profile FME is a leading provider of dialysis equipment and treatment for people with chronic kidney failure. Business Situation The company's subsidiaries were operating disparate enterprise resource planning (ERP) solutions that were unable to support information sharing. FME aimed to become an integrated business. Solution FME implemented Microsoft Business Solutions Axapta and Microsoft SQL Server 2000, with SQL Server 2000 Reporting Services and SQL Server 2000 Analysis Services. Benefits Reduced TCO and maintenance costs Easy implementation for new subsidiaries Lowered reporting time and improved information sharing Diminished manual work and effort duplication Improved usability " where we spent one euro on Microsoft Axapta, we would have had to spend between a minimum of 2 euros on SAP/R3 to get the same functionality." Fresenius Medical Care (FME) is the world's largest integrated provider of products and services for people with chronic kidney failure. FME has continued to grow its operations in Europe, the Middle East, Africa (EMEA), and Latin America (LA) by acquiring sales offices and clinics throughout the region. As a result, FME EMEA inherited legacy IT systems and disparate enterprise resource planning (ERP) solutions. FME selected Microsoft Business Solutions Axapta because it offered lower maintenance costs, greater ease of use than the complex SAP system, and better integration with the current ERP environment. The selected solution can be implemented within a short project time, and as a result, the projected implementation costs are significantly less than the cost of a comparable SAP solution. The new ERP solution leads to significant time-savings in reporting by streamlining business processes.

2 We wanted a groupwide, harmonised, standardised environment to manage the company finances and the supply chain. FME wanted to become an integrated company model and introduce global product codes for all of our products. Situation Fresenius Medical Care (FME) is a leader in dialysis services and products to treat patients with kidney disease. Through its network of 1,645 dialysis clinics in North America, Europe, Latin America, and Asia- Pacific, FME provides dialysis treatment to more than 128,000 patients around the globe. Within Europe, the Middle East, Africa (EMEA), and Latin America (LA), FME has sales and production subsidiaries in many countries. The following countries are now running the Microsoft Business Solutions Axapta business software successfully: Denmark, Sweden, Finland, Poland, Saudi Arabia, Morocco, Venezuela, Slovakia, Slovenia, and Lebanon. Over the past five years FME EMEA & LA has rapidly grown its company by acquiring sales offices throughout the region. This acquisition strategy left the company operating disparate IT systems, including different enterprise resource planning (ERP) solutions, within each entity. New subsidiaries in EMEA & LA were either not running an ERP solution, operating a solution built locally with different language capabilities to match local requirements, or using a solution that did not fit with the ERP IT strategy to provide only SAP/R3 or Microsoft Axapta. As a result, it was difficult for individual companies to extract and share financial data with regional management at the head office in Bad Homburg v.d.h., Germany. The regional management team had very limited visibility into current inventory and distribution levels, and the related financial picture. FME EMEA & LA wanted to remain with its decentralised business model where the subsidiaries make autonomous business decisions but also wanted to increase the value of using standardised ERP solutions through better integration and a common understanding. To achieve this, FME EMEA & LA has integrated Microsoft Axapta fully into its logistic and financial flow. This enables communication with the headquarters running SAP. FME needed software that could fit the size of its sales subsidiaries around 15 to 20 users but would scale easily to accommodate future growth and the outfitting of offices acquired in the future. The solution needed to be easy to implement, affordable, adaptable, and able to provide multicurrency and multilingual capabilities. Efficient data sharing and sales processes were required to provide a more consistent service delivery across all operations. The big challenge was to find a solution that could be implemented in Europe, in the Middle East, and also in Latin America. The solution also had to help FME s subsidiaries to improve their financial reporting to the headquarters according to US-GAAP (US Generally Accepted Accounting Principles) regulations. Finally, the solution needed to work with the ERP solution (SAP/R3) used at FME's European headquarters. Manager at FME is responsible for the implementation of ERP solutions within FME EMEA & LA. Buschbell says: "The company operated in a decentralised way, which meant that business decisions for each country were made by individual subsidiaries. We wanted a group-wide, harmonised, standardised environment to manage the company finances and the supply chain. FME wanted to become an integrated company model and introduce global product codes for all of our products. Using these global product codes and a standardised business management solution, it would be easy to share and analyse data. With better information sharing and reporting, we could then conduct supply and demand analysis

3 Previously, our local CFOs and logistics managers spent a lot of time extracting data from their former ERP systems. This process has been automated, using Microsoft Axapta, which provides our head office with a clear view of items, stock level, and orders. and provide better forecast planning to reduce inefficiencies within our supply chain." Solution Recognising the need for a robust business management solution, FME began to evaluate available solutions. Having identified five potential solutions including Microsoft Business Solutions Axapta FME brought in trusted partners for product demonstrations. Based on these demonstrations, FME chose Microsoft Axapta because it offered a userfriendly interface and intuitive views into business processes, good scalability for processes and users, better functionality out of the box, and bilingual and multicurrency support. FME also appreciated the fact that the total cost of ownership (TCO) of Microsoft Axapta is much lower than SAP. In 2001, FME engaged Danish integrator and Microsoft Gold Certified Partner HOB Business Solutions to implement the solution in FME's Danish subsidiary as a pilot. FME and HOB used Microsoft Axapta to create a standardised template with pre-defined business processes that correlated with FME's needs. Once this template was built, FME and HOB could quickly implement Microsoft Axapta across several of its subsidiaries without further customisations. FME has applied a hub-and-spoke implementation model with the central sales information system and the product replenishment system in headquarters acting as the hub, and Microsoft Axapta in the subsidiaries as the spokes. The hub and spokes are currently integrated using a file transfer protocol (FTP) interface, through which management at headquarters or local subsidiaries can share information about orders and goods. In addition regional management is always aware of local sales and its development in terms of quantities and key performance indicators (KPIs). FME s existing sales information system, Sales Cockpit, uses Microsoft SQL Server 2000, with SQL Server 2000 Reporting Services, and SQL Server 2000 Analysis Services, which assist FME to share information such as sales revenues, quantities, and KPIs. The replenishment system is also based on SQL Server 2000 and the integrated TXT-solution (Demand Planning). This information system has been piloted and will now be rolled out by the regional logistics management teams in most of the countries using Microsoft Axapta. In this information system the regional logistics management teams get information about open orders, stock situations, purchases, and replenishment. Finally, this integration makes it possible for management to make insightful and timely decisions. Benefits Reduced Total Cost of Ownership The solution was significantly more affordable than other business management solutions. Buschbell says: "For the project in Venezuela where FME replaced a local solution with Microsoft Axapta, we conducted a total cost of ownership (TCO) analysis between SAP/R3 and Microsoft Axapta, looking at all the costs that we would have incurred if we were to run each application for five years. This included hardware, maintenance, and any customisations. What we found for Venezuela is that where we spent one euro on Microsoft Axapta, we would have had to spend between a minimum of 2 euros on SAP/R3 to get the same functionality." In the case of FME s subsidiary in Venezuela, the TCO analysis was one of the primary reasons for implementing Microsoft Axapta rather than opting for an SAP platform. Easy Implementation for Streamlined Business As a fast-growing company, ease of implementation was a critical factor in the solution for FME. Because FME created a

4 "Pre-defined business processes in Microsoft Axapta allowed us to speed up our reporting cycle. This has made it easier for our decisionmakers to get the information they need to do their jobs. template solution based on Microsoft Axapta, implementing the solution in a new country can be done quickly and simply. Essentially all countries run the same software, although it can often be configured to meet local requirements. Deploying a pre-defined system reduces the costs associated with implementation as well as makes upgrades easy. As FME continues to grow and acquire new offices throughout EMEA & LA, it is assured of a business management solution that is straightforward to set up. Hasse Bergman, Chief Executive Officer, HOB Business Solutions, says: "FME needed an affordable and fast way to implement a business management solution. The company uses Microsoft Axapta in a standardised way. While subsidiaries may change the layout of their invoices and packing slips to meet any legal requirements in the country they operate in, no other alterations are made. This makes upgrading and deploying service packs for Microsoft Axapta quick and simple. It is also possible to implement these updates remotely, so there is no need for the IT team to spend long hours at the site." Improved Time to Report Microsoft Axapta, together with SQL Server 2000, provides improved reporting tools that help FME to conduct in-depth sales and business analysis. The use of pre-defined reporting processes has dramatically reduced the amount of time required to do financial reporting. The same result is expected in the near future for the supply and ordering of dialysis products. The reporting capabilities of Microsoft Axapta assist FME to meet FME s US-GAAP reporting regulations. Buschbell says: "Previously, our local CFOs and logistics managers spent a lot of time extracting data from their former ERP systems and supplying this data to our head office. This process has been automated, using Microsoft Axapta, which provides our head office with a clear view of items, stock level, and orders." "Pre-defined business processes in Microsoft Axapta allowed us to speed up our reporting cycle. This has made it easier for our decision-makers to get the information they need to do their jobs. We have reduced the amount of time for our subsidiaries to report to head quarters by three or four days on average. For example, in our Denmark office, the local chief financial officer was required to provide a separate report every month to the head office. In the past this took up to five working days to complete. Today, using Microsoft Axapta and the streamlined process, this process takes less than two working days." Enhanced Ease of Use The ease of use of this solution meant it was quickly accepted by employees. Buschbell says: "The user-friendly structure of Microsoft Axapta allowed our employees to start using it immediately. The processes in Microsoft Axapta are more transparent for the subsidiaries than the former solutions, so our employees are more confident with the system. It is easier to create reports and has more flexibility and better integration than the systems that were previously used. Cut Duplication of Effort and Manual Work Since Microsoft Axapta went live, all areas of FME's business have worked more efficiently and effectively. By automating many processes, FME has reduced the manual workload of its employees and removed incidents of work duplication. With a streamlined order process, FME can track orders from the time of entry through to completion. As a result, the company's finances have been transformed.

5 For More Information For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) In Canada, call the Microsoft Canada Information Centre at (877) Customers who are deaf or hard-ofhearing can reach Microsoft text telephone (TTY/TDD) services at (800) in the United States or (905) in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to: For more information about Fresenius Medical Care products and services, visit the Web site at: Buschbell says: "Since using the solution, there has been a reduction of the manual workload by around 15 per cent on average across the subsidiary operations. Also, as we have re-positioned the business to an intercompany model, we all work on the same common basis. This will reduce misunderstandings in the future, so we don't have a problem with duplication of effort." Microsoft Business Solutions Microsoft Business Solutions offer integrated business applications and services that allow small and midsize organizations and divisions of large enterprises to connect employees, customers, and suppliers for improved efficiency. The financial management, customer relationship management, supply chain management, and analytics applications work with other Microsoft software, including the Microsoft Office System and the Windows operating system, to streamline processes across an entire organization. This gives businesses insight to respond rapidly, plan strategically, and execute quickly. Microsoft Business Solutions are delivered through a worldwide network of channel partners that provide specialized services and local support tailored to a company s needs. For more information about HOB Business Solutions products and services, visit the Web site at: For more information about Microsoft Business Solutions, go to: Microsoft Corporation. All rights reserved. This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Microsoft, Axapta, and Windows are either registered trademarks or trademarks of Microsoft Corporation or Microsoft Business Solutions ApS in the United States and/or other countries. Microsoft Business Solutions ApS is a subsidiary of Microsoft Corporation. All other trademarks are property of their respective owners. Document published December 2005 Software and Services Products Microsoft Business Solutions Axapta Microsoft SQL Server 2000 Technologies Microsoft SQL Server 2000 Analysis Services Microsoft SQL Server 2000 Reporting Services

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