Helping Cardinal Health Fast-Track an Acquisition

By Samuel Greengard  |  Posted 2016-04-13 Email Print this article Print
Cloud-based business management

The manufacturer and distributor of medical, surgical and pharmaceutical products used a cloud-based business management system to speed a major acquisition.

Mergers and acquisitions present a dizzying array of challenges for organizations of all shapes and sizes. Pulling together vast amounts of financial and business data to close a deal can tax even the most IT savvy organization.

Therefore, when Cardinal Health, a leading manufacturer and distributor of medical, surgical and pharmaceutical products, announced the acquisition of medical equipment manufacturer Cordis in March 2015, the race was on to build a system and processes that could pull together all the necessary financial and business operations data.

The organizations had to close the deal by August—essentially a five-month window. What's more, the challenges were magnified by a need to incorporate financial and operations data across 18 countries.

"We had localization issues and statutory requirements to address," recalls George Kuntz, vice president of enterprise IT within the Shared Services function of Cardinal Health. "Although it was a great acquisition opportunity, we had to establish all the financial systems in a very short timeline and ensure completeness and accuracy.

"The systems we had in place were not equipped to handle the task adequately. We had to look for a platform that could fully support the acquisition."

Handling Global Data Requirements and Customization

After examining various options, Cardinal Health turned to SAP ByDesign, cloud-based business management software, to deliver a framework for managing the transition and putting all the documents and data in the proper place. Because the company already used SAP Business Suite software for enterprise resource planning (ERP), the system was a natural choice, Kuntz points out. The team worked with Accenture, L&T Infotech and Seidor to construct the business and IT framework.

The ByDesign platform, which went live in May 2015, provided the necessary flexibility to handle the global data requirements and the level of customization Cardinal Health required. The company also found the cloud capabilities attractive from an IT administration and data management perspective.

Getting the system up and running was the easy part, according to Kuntz. There were few technical considerations and obstacles. "The issues we ran into revolved around the marriage of functionality across types of accounts—both global and local," he adds.

The company worked with a Netherlands-based firm, TMF, to design and align a financial structure that fit the needs of Cardinal Health in the EMEA (Europe, the Middle East and Africa) region. In the end, it was able to meet the 80-day project window, and satisfied both internal and external data and reporting requirements.

"The system was set up, and we were at full capacity by the deadline date," Kuntz reports.

To be sure, it's been a winning proposition. The project has introduced a data environment that more easily facilitates key processes involving order-to-cash, third-party logistics and master data alignment with regional data and reporting requirements.

What's more, with the SAP ByDesign framework in place, Cardinal Health is now well-positioned for other acquisitions in the future. "It is a powerful and highly flexible platform that delivers a high level of functional capacity," Kuntz says.

Samuel Greengard writes about business and technology for Baseline, CIO Insight and other publications. His most recent book is The Internet of Things (MIT Press, 2015).

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