2 Agenda 2 ן Introduction to UCB ן What does good performance management mean, and how can it help to avoid conflict? ן Outcomes of using a Performance Tracking tool
3 UCB: A patient-centric biopharma leader Focusing on severe diseases in Immunology and the Central Nervous System 3 Key facts and figures: FY 2014 revenue: 3.3 billion FY 2014 rebitda: 609 million More than employees globally Operations in 36 countries R&D Spend: ~28% of revenue Listed on Euronext Biologics R&D center - Slough, U.K. Biologics pilot plant Braine-l Alleud, Belgium
4 Management Complexity Broad spectrum of UCB s Partnerships 4 Asset integration Acquisitions (*) Joint Ventures Strategic Alliances Strategic Outsourcing Partnership Business Process Outsourcing Preferred/Strategic Provider Vendor Contract (*) Asset exchange Collaborative Involvement (*) = Out of Scope
5 What does good performance management mean, and how can it help to avoid conflict? 5
6 What does good performance management mean? 6 1. Provider self-reports performance: check that they measure and represent what you expect 2. All green dashboards: beware, there should be additional performance measures beyond KPIs 3. Good KPIs are not enough, they should be driving the right business behaviour 4. In case of partnering with several providers, reap the value from cross-contract benchmarks 5. Migrate to end to end reporting: team up with the provider to improve overall process/service outcome vs. just pieces of the chain Answer the so what question
7 Performance Management: Insights & Observations 1. Where the partner self-reports on their performance, be careful to check that the provider is measuring and representing what you expectwhere Recent experience with a Clinical Research Organization: provided an all green performance report to UCB contract managers When analysing the data more closely, UCB realised that the provider was rating performance as green from 90% of meeting the objective See impact of revised report below 7 From Target: 100% Minimum Service: 95 to 99.9% Critical service level: <95% To
8 Performance Management: Insights & Observations 2. KPIs are only one component of performance measurement beware of all green KPI dashboards. Performance assessment should comprise other components 8 Employee attrition rate Stakeholder satisfaction Governance meeting, more investigations Not enough tasks, workload provided to the outsourcing partner leading to demotivation of employees, leading to high attrition rate.
9 Performance Management: Insights & Observations 3. Good KPIs alone are not enough, they should be driving the right business behaviour. 9 Option 1 : «Green» KPI whereby the provider processes 100% of org chart updates within an agreed timeframe. Given volume based contract and 10% absorption threshold, this leads to an invoice increase Option 2: «Red» KPI but non urgent HR requests are carried over into the next month to avoid extra costs
10 Unmanaged attrition Performance Management: Insights & Observations 4. In case of partnering with several providers, reap the value from crosscontract benchmarks % Example: 12 months rolling attrition formula = unmanaged attrition over the last 12 months average headcount over the last 12 months 30.00% 25.00% Finance BPO 20.00% 15.00% 10.00% IT Drug Safety Clinical Sciences 5.00% 0.00% HR
11 Performance Management: Insights & Observations 5. Migrate to end to end reporting: team up with the provider to improve overall process/service outcome vs. just pieces of the chain 11 GPI1 = true on time ready to pay CPI1 = on time ready to pay GPI2 = invoices sent 10 days prior to payment date GPI3 = queries answered in more than 4 days RCA analysis is key and helps focusing where it makes sense = + +
12 Outcome of using a Performance Management tool 12
13 Reasons for rolling out a performance management tool 13 UCB internal reasons: there is a tendency for engagement leads to concentrate on operations vs. KPI and financials tracking (and strategic outlook) Hence, it is useful to provide monthly information on consumption, KPI performance and financials on a governance tool and flag any major deviations to the engagement leads, so they can initiate remedy Strong performance and contract management is mostly present at the provider s side and had to be built up in UCB as well
14 Reasons for rolling out a performance management tool 14 Outside-in perspective from HfS governance solution study 2014: Amount of statutory and regulatory compliance requirements, including sophistication of outsourcing agreements, continues to increase globally Enterprises that are more progressive have been the early adopters of these governance software and service solutions (less than 1% of potential global Governance Solution s market currently tapped into) Senior, and highly skilled, governance resources cannot afford to get stuck behind their desks trying to figure out spreadsheet formulas and updating status reports. They must spend a high percentage of their time collaborating with service providers and with the business UCB selected Enlighta, which was ranked in the top winner s circle by the HfS report HfS Blueprint 2014: Shared Services & Outsourcing Governance Solutions
15 Overview of Enlighta 15
16 Ways of Working with the Governance Tool and Meetings 16 The governance meetings are held between the outsourcing engagement managers, the Partnerships & Performance Mgt. team and (in more advanced relationships) the providers to review contracts on regular basis: Variance analysis of the SLA Performance View of Consumption and Financial Scorecards Review of new change requests Development of mitigation plans Bring cross functional expertise to the contract manager, who usually only focuses only on one engagement.
17 Key benefits of working with a performance tracking tool 17 Centralized data, «one version of the truth» Major part of manual data collection can be automated Flexibility of the tool: Possibility to add comments on performance Customised performance indicators Display performance for all geographies in scope Accurate reporting and dashboards Availability of data User-friendliness
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