October 29, 2018

TCS's repeatable carve-out model helps Bayer complete multiple divestitures on time

Tata Consultancy Services partners life sciences major to create a scalable, repeatable operating model to enable timely divestitures of business entities

Frankfurt | Mumbai: Tata Consultancy Services (BSE: 532540, NSE: TCS), a leading global IT services, consulting and business solutions organisation, announced that it has built a repeatable operating model for Bayer, a leading life sciences company, which helped to successfully complete the IT system and operations carve-outs needed by Bayer to go through with the time-bound divestiture of some of its crop science businesses.

Following its 2016 announcement to acquire Monsanto, Bayer had to divest certain crop science businesses in order to obtain regulatory approvals. Bayer partnered with TCS to create a scalable, repeatable carve-out solution spanning the complete stack of IT systems, infrastructure and operations, to execute the divestiture of multiple business entities within a very short timeline of 18 months.

“We had to divest the businesses fast and completely, but had to deal with complexity and uncertainties in scope and timing due to enhanced demands from the regulatory authorities,” said Daniel Hartert, head of business services and CIO of the Bayer Group. “It was a project unprecedented in its approach and its global scale and scope for Bayer and the market. TCS brought in the required industry thought leadership, full services capability and a ‘can do’ approach to ensure that we delivered a modern, optimal and fully functional administrative backbone on time. The integrated team of Bayer and TCS made this project a real success. And it allows Bayer to fully focus on our own priorities, first and foremost the integration of Monsanto.”

While the previous landscape at Bayer was fully integrated with the business setup of a large organisation, the integrated team of TCS consultants and Bayer’s experts drew up a new business solution that was simplified, and `fit for purpose’ to meet the needs of the smaller business portfolios being divested.

Taking a business-oriented, cloud-first approach, TCS defined the end-to-end business processes, set up a cloud-based solution environment for the vast majority of the divested businesses, including the complete stack of infrastructure, IT applications and enabling business process services, all to be transferred to the acquirer at closing.

TCS leveraged its consulting methodology and framework to design ‘smart’ templates to cover all core business processes to replace the legacy integrated ERP functions. Other functions like research and development and commercial applications were hosted on the public cloud platform. Two new ERP systems, extensions to an existing ERP system, and over 400 non-ERP applications made up the application landscape implemented. These new processes, systems and legal entities were set up to support operations in 25 countries. New HR processes and systems for more than 4,000 employees were enabled, including new payroll processes in 16 countries.

To meet the very tight deadlines, TCS provided a packaged turnkey business solution covering core functions like finance, accounting, human resources, payroll and procurement using business process services leveraging TCS’s Global Network Delivery Model and a strong ecosystem of partners. TCS enabled a seamless transition from Bayer to the new entities on day one with automated data migration.

By aligning lean business processes and ‘fit for purpose’ IT capabilities, the carved-out business units, with more than 4,300 employees at 140 sites in 26 countries, were able to operate largely autonomously as of closing, and are now fully functional on the new set-up.

“This was an incredibly rapid, streamlined approach, driven by a focus on critical strategic capabilities and striking a balance between speed, value and risk,” said Dave Jordan, global head, consulting and services integration, TCS.

With these successful divestitures, Bayer can now leverage this proven model for potential business transformations in the future. The TCS cloud-based infrastructure and IT platforms accelerate change, the smart templates enable repeatable transformation and an agile factory model provides the speed, scalability and flexibility to accommodate changes in scope and timelines.

“The success of this industry-first model is a demonstration of our Business 4.0 capabilities including automation, Agile and cloud,” said Vikas Jain, vice president and head, life sciences business, TCS. “A cloud-first approach combined with TCS’s location-independent Agile model helped us address the frequently changing requirements in near real time. TCS is honoured to be part of this business transformation at Bayer.”