Organisational Design

New operating model puts focus on back-office adding value

A global pharmaceutical organisation known for developing innovative medicines and medical devices, was undergoing a major global transformation of its non-clinical functions. It hoped to increase operational efficiency across its HR and Finance back-office functions, and realise the benefits of a new, flatter organisational structure designed to improve communication, decision making and collaboration.

The organisation, which aims to improve health care and patient outcomes, asked us to develop a business case and define a target operating model. This would be based on outsourcing transactional activity, while retaining strategic, value-adding activities.

We were then asked to implement the proposed model over 12 months, covering change management, communications, organisational design and systems implementation.

How we did it

The organisation already had a team of 20 dedicated to delivering its strategic transformation goals, so it was important that we work alongside them. Having defined a clear scope within our workstream, we devoted four change consultants and two technology consultants to supporting the programme.

The framework we used involved our proven six-step methodology for successful organisational design. This involved:

  1. Creating new organisational design principles based on business strategy and the organisation’s values and goals.
  2. Identifying current processes, structures and teams, as well as power domains, hierarchies, decision-making responsibilities, communication channels and company culture. This began with a series of internal workshops and desk-based research to gather information. It also allowed us to establish important relationships and credibility with stakeholders.
  3. Reviewing the current organisation against the design principles to determine where there were gaps. We worked closely with the organisation and their outsourcing partners to understand the current HR and Finance operating models. It was clear that there was a genuine business case for outsourcing transactional activity.
  4. Identifying future design options, risks and trade-offs for each operational redesign, ready for discussion and evaluation against strategic goals. We identified various opportunities for process streamlining and improving operational efficiencies, including by removing duplication, manual activities and unnecessary approvals. These new process flows would allow for both strategic and transactional activities.
  5. Agreeing and developing the future design option. Our hybrid outsourcing model was designed to underpin the strategic goals of improved communication, decision making and global collaboration. We also analysed work volumes and patterns to define the new roles, responsibilities, skills, competencies, structures and cost modelling that would be required to support the new operating model.
  6. Developing transition plans for moving to the future design. Communication and stakeholder engagement were key to the project’s success. This included advising which communication channels to use to work effectively with outsourcing partners and other third parties.

“We firmly believe in working in partnership with our clients. Our approach is to ‘muck in’ and ensure we deliver what we say we will at all times.”

The result

The creation of and transition to the new operating model over 18 months were a success. By outsourcing transactional activities, the project achieved the operational efficiencies it aimed for, both in terms of service delivery and cost reductions.

Moreover, the strategic HR and Finance activities were retained and reorganised into global hubs of expertise. This meant that each hub could now provide service excellence to its customers using enhanced technology functionality and best-practice approaches.