Forschungs- & Entwicklungs-Prozess Governance & Risiko Management Portfolio und Projektmanagement (inkl. Budgetierungsprozess) Target Identification & Prioritization Drug Discovery Pre-Clinical Clinical Development Compliance Management (inkl. FDA, OGI, SOX and SPL) Chemische- und Prozessentwicklung Marketing

R&D Project Management Processes, Approaches and Tools Dr. Thomas Henkelmann Director Consulting, The Project Group GmbH Event: Digital Pharma: Efficient Research and Development Processes in Pharmaceutical and Life Science Businesses

Agenda R&D budget planning and project management Transparent resource management and KPIs Reporting and controlling Integration with financial systems, e.g. SAP R&D Budgetplanung und projectmanagement: 10 min Berichtwesen und Controlling für R&D Portfolio Budgets: 7 min Transparentes Ressourcenmanagement und KPIs: 10 min Integration mit Finanzsystemen am Beispiel SAP: 15 min

R&D budget planning and project management The foundation for planning and controlling

Budget planning for R&D projects Top Down approach Budget progress principle Focused on competition Focused on revenue and margin Bottom Up approach Based on projects and programmes Zero based budgeting Counter current process Combines both approaches Ensures integrity with liquidity planning and shows realistic data

Counter current process: Top Down and Bottom Up Strategic Goals Planning by key data Strategic alignment: - Gap analysis - Competition analysis - Scenario planning Target oriented R&D budget Program planning: - Portfolio analysis - Project analysis - Project priority R&D Programmes Project oriented planning of financial needs In Anlehnung an Specht/Beckmann/Amelingmeyer, R&D Management

Budget planning across all project phases Strategic goals Ideas R&D Budget R&D Budget R&D Budget Production R&D Project Portfolio R&D Project Portfolio R&D Project Portfolio Exploratory Feasibility Development

R&D project management Up-to-date base data for budget planning Compilation and priorization of programmes Scheduling and coordination Allocation of resources and controlling of resource usage Controlling of project cost and dates

Components Data store Access control Microsoft Office Projectserver Project Web Access Controlling Reporting Demo: project eines PM Project Center für die Übersicht Microsoft Project Professional Project manager Resource manager

Unified approach to planning

Portfolio of all projects

Resource management and KPI Reliable data for successful project management

Resource management Capacity planning High level effort and cost estimate Alignment to strategic goals Target: correlation to budget Resource planning By phases and qualifications/skills Alignment by organizational structures Target: load balance per department/team Resource allocation Detailed tasks Assignment and tracking per team member Target: organize work

Load by department/team/skill etc.

Key performance indicators - KPI Portfolio at a glance The most important key data overview Schedule reliability Cost and budget limits Quality of the planning process

Portfolio with KPI

Reporting and Controlling Foundation for decisions

Reports and Analysis Project management Critical projects Milestone overview Resource management Identify bottlenecks Manage scenarios Portfolio management Check alignment with strategic goals Run the right projects!

Milestone overview, What-if analysis

Controlling Deliver data for ERP systems Project/Program controlling Plan vs. actual comparison Budget alignment Business unit controlling Resource requirements and usage Cost center planning vs. Project planning Enterprise controlling Revenue planning Cash flow planning

Controlling integration with SAP Integrate what – and why?

Overview on integration with controlling High level integration Microsoft Project for detail planning SAP for controlling No project details in SAP! Exchange information: Base data: WBS structures or internal orders Current data: Cost and work Time tracking: work receipt or CATS Reporting data: cost, budget

Levels of controlling integration Projects: Microsoft EPM Technology Enterprise role Project managers, teams PMO, departments Upper Management Critical milestones, project success Portfolios, milestones, budgets, centralized resource planning, risks, problems, change management etc. Operational project management, supervision Core processes: ERP system Strategic view : indicators, customer profitability, strategic direction (SAP CO, FI, BW,…) Controlling view : budgets, cost centers, revenues, purchasing, customer management (SAP PS, CO ...) Project view: staff resources, unit costs (SAP PS, HR, CATS)

Information exchange ERP System (SAP) Project Server Resource data EmployeeID, cost center, Org. Unit etc. Resource data Project data Structures, dates, work, cost, budgets, actual data ERP System (SAP) Project Server

Requirements for the integration Flexible configuration for the synch process Flexible configuration for roles and rights Based on Microsoft Project User Management Bidirectional data exchange Leading system at field level Manual and automated synchronization

Example for project structures Option 1 Option 2

Example for work and cost Fiscal Year: 2004 WBS-ID Cost Center Act. Type Period Work Comment CXXX.1.0001 1000 001 12 20 Task 1 Assignment 1 CXXX.1.0001 1000 002 12 80 Task 1 Assignment 2 and Task 2 Assignment 1 Fiscal Year: 2005 CXXX.1.0001 1000 002 1 100 Task 2 Assignment 1

Example for time tracking with SAP CATS CXXX.1.0001 CXXX.1.0002 SAP PS (No tasks here!) WBS Element MSP Task Cost Ctr … CXXX.1.0001 Task1 1000 Task2 CXXX.1.0002 Task4 CATS for Resource 2 (All tasks here!)

Example for actual data from SAP SAP actual cost information in Microsoft Project: ID Task Name SAP Plan cost Actual cost Obligo Allocated Available 1 Engine XY 100.000 € 30.000 € 5.000 € 35.000 € 65.000 € 2 Construction 3 Functional Groups 4 Power supply 0 € 8 Control 50.000 € 15.000 € 12 Aggregates 20.000 €

Thank you for your attention! Please address questions to: Dr. Thomas Henkelmann, The Project Group GmbH Director Consulting Services Neherstr. 9, 81675 München Tel +49-89 / 61559330 Fax +49-89 / 61559340 www.theprojectgroup.de