Elanco Animal Health is a global leader in animal health dedicated to innovating and delivering products and services to prevent and treat disease in farm animals and pets, creating value for farmers, pet owners, veterinarians, stakeholders, and society as a whole.
With nearly 70 years of animal health heritage, the company is committed to helping its customers improve the health of animals in their care, while also making a meaningful impact on local and global communities. Elanco is driven by its vision of “Food and Companionship Enriching Life” and its approach to sustainability, “Elanco Healthy Purpose” — all to advance the health of animals, people, the planet, and its enterprise.
Veterinary medicine is highly regulated, with complex licensing requirements for purchasing medications. A key part of the Elanco business model is to make it simple for veterinary and agribusiness customers to get the medications and treatments they need to keep animals healthy.
“Spend control is very important to Elanco,” said Sin Yi Tan, procure-to-pay global process owner at Elanco. “It was essential that we gain technological and financial independence from our ex-parent company.”
Elanco’s digital transformation started with two corporate events: a spin-off from former parent company Eli Lilly & Company and acquisition of Bayer Animal Health. To establish an independent company, Elanco needed technical, financial, and management independence. Continuing to use Eli Lilly systems did not meet the company’s specific business needs and was costly.
SAP stepped in to provide Elanco with a comprehensive suite of intelligent spend solutions that not only addressed its immediate needs but also helped ensure compliance with tax and business environments. SAP’s investment in future development and product development, particularly the product road map for the SAP Ariba portfolio incorporating artificial intelligent (AI), played a crucial role in Elanco’s decision-making process.
Elanco selected SAP Ariba and SAP Business Network because of their emphasis on self-service. The two offered a better front-end user experience than competitors and provided the ability to expand the customer base, efficient supplier registration, and flexibility in catalog management. Elanco saw the SAP procurement solutions as an extension and enhancement of its investment in SAP S/4HANA Cloud. Additionally, SAP Ariba facilitated intuitive PO status updates, electronic invoice submission, and communication from suppliers, further enhancing the self-service aspect.
Having one platform for supplier registration allowed Elanco to limit risk in its supply base. SAP Ariba is the only registration tool and provides a secure platform for suppliers to manage their own data. Elanco does not need to manage data changes, which reduces the risk of fraud and compromised financial data.
Scaling an Implementation
The company’s Stallion Project, which began in 2019, marked the start of its digital transformation journey. With the help of an external consultant, Elanco moved from the design phase to go-live in 18 months. The entire process was conducted remotely due to COVID-19, and Elanco managed to process $1 billion in spend within six months.
The next priority was consolidation of systems after the 2019 acquisition of Bayer Animal Health. Elanco knew that it needed to continue to scale processes to onboard a business unit that would account for 20% of its business.
Elanco successfully integrated 13,000 unique vendors from Bayer Animal Health, achieving a 1:1 volume ratio. Since Bayer was already using SAP Ariba procurement solutions and SAP Business Network, the transition was not entirely new for all suppliers. Elanco built an internal “Contact Center” team to handle external suppliers and encouraged them to register on SAP Ariba for compliance and security reasons.
SAP S/4HANA Cloud Drives the Value of Connected Systems
The seamless integration between SAP S/4HANA Cloud and SAP procurement solutions was a significant reason behind the decision to choose SAP. This integration has paid off, with minimal customizations required and faster adoption by the business. For users, there is communication and delineation of tasks among the SAP platforms. The company uses SAP S/4HANA Cloud for its direct spend management and SAP Ariba for indirect spend. It is easy to establish governance and manage access to help ensure users are guided to the right process for each purchasing activity.
“SAP S/4HANA Cloud with the intelligent spend solutions add key value to the business” Sin Yi Tan said. “The integrations added a quicker time-to-value and the standardization has been integral to our growth.”
A Path Toward Logistics Transformation
While Elanco is still exploring the full potential of SAP Business Network for Logistics, global track and trace capability, the company has already experienced greater transparency in its shipment tracking.
Elanco Animal Health’s digital transformation journey with SAP has been a resounding success. The seamless integration of SAP Ariba, SAP Business Network, and SAP S/4HANA Cloud, coupled with the focus on self-service and compliance, has enabled the company to achieve independence and cater to its specific business needs. As its continues to grow and evolve, SAP remains a trusted partner in an ongoing journey – striving to keep animals in good health.
