Harbin Pharmaceutical Group: Remastering budgeting management for improved group performance
Explore Harbin Pharma’s journey with SAP
Harbin Pharmaceutical Group Co. Ltd. manages a diversified business portfolio and numerous subsidiaries. To enhance financial efficiency and strengthen group control, it implemented the SAP Analytics Cloud solution for planning with the SAP Business Planning and Consolidation application, introducing a rolling forecast mechanism at the group level for the first time.
| Industry | Region | Company Size | Partner |
| Life sciences and healthcare | Harbin, China | >12,000 employees | Deloitte |
reduction in time needed for financial statement preparation.
increase in net profit.
CEO, Harbin Pharmaceutical Group Co. Ltd.
Recalibrating budgeting management in line with performance pressure
Harbin Pharmaceutical Group Co. Ltd. is a pioneer in China’s pharmaceutical industry, with 10 industrial enterprises, two commercial distribution companies, and a drug research institute under its umbrella. The group has developed five renowned Chinese trademarks – “Hayao,” “Sanjing,” “Gaizhonggai,” “Hutong,” and “Shiyitang” – with a combined brand value exceeding ¥20 billion (US$2.8 billion).
Harbin Pharma’s headquarters was established later than its subsidiaries, which initially led to a lack of strong control capabilities. From a financial perspective, the group faced difficulties managing annual budgets because it operated multiple, parallel ERP systems. Performance targets were tracked using manual processes, making task completion hard to monitor effectively. Additionally, the generation of statutory financial statements for the company was a time-consuming and labor-intensive process. It often required assigning a team to compile data from numerous business units. The execution process, being somewhat opaque, made performance forecasting error prone, leading to unnecessary financial fluctuations.
Previously, the group’s headquarters performed integrated budgeting using the SAP Business Planning and Consolidation (SAP BPC) application. This effectively consolidated the financial budget data from its subsidiaries, consequently solidifying a foundation for business planning and performance forecasting throughout the group. With the implementation of a rolling forecast mechanism at the group level, the key user base increased significantly. As a listed state-owned enterprise, Harbin Pharma encountered progressively stringent data control requirements. As a result, the group sought out a more user-friendly budgeting management solution. A solution that not only offered robust analytics capabilities but also had the flexibility for toggling between cloud and on-premise deployment.
Enabling rolling forecast management with a unified planning foundation
Recognizing the varying levels of digitalization across its subsidiaries, Harbin Pharma joined forces with Deloitte to help it identify the right solution. Together, they made the decision to adopt SAP Analytics Cloud for planning integrated with the existing planning and consolidation application, prioritizing a unified user experience.
Building on SAP BPC as the foundation and leveraging the enterprise-grade planning capabilities offered by SAP Analytics Cloud for planning gave Harbin Pharma a cloud-based application suite. This encompasses planning, budgeting, forecasting simulations, and actual-to-plan analysis on a single foundation. The intuitive nature of SAP Analytics Cloud allowed Harbin Pharma to accelerate the implementation of the rolling forecast mechanism across the group. And positive feedback was given from key users nationwide, thanks to features such as integration without a VPN and batch data entry.
To minimize operational risks during the data system’s cloud migration, Harbin Pharma completed user education through the SAP Enterprise Support Academy program and had expert implementation guidance during the project preparation phase. Additionally, the company incorporated risk assessment and critical task support during the implementation process from SAP Enterprise Support services, helping the successful go-live of the SAP Analytics Cloud for Planning integrated with SAP BPC.
Smoothing budgeting collaboration to support strategic growth
After deploying SAP Analytics Cloud for planning integrated with SAP BPC, Harbin Pharma has standardized and modernized its budgeting and financial management processes. The group has now upgraded to a monthly rolling forecast mechanism, not only improving the accuracy of performance forecasting but also refining performance evaluation dimensions. This has considerably shortened the cycle of KPI establishment and reporting, effectively activating employee productivity. Every budget at Harbin Pharma is generated based on comprehensive and reliable group business data, aligned with specific business objectives and accountable to corresponding midlevel managers. Adjustments can be made within a month, effectively energizing the organization.
In the first half of this year, Harbin Pharma achieved a year-on-year net profit growth of over 40%. The modernized financial management system, together with comprehensive user education, has instilled a contemporary enterprise management sensibility among its employees, paving the way for the group’s transformation. Having secured a strong budgeting function, Harbin Pharma is currently gearing up to expedite the launch of digital management modules. This includes demand planning and customer relationship management functionality, leveraging its strong digital capabilities to support its strategic thrust into the eldercare and healthcare business.
Featured partner
As a global SAP partner, Deloitte serves more than 1,000 active SAP clients worldwide.Drawing on its deep insights into the digital transformation of the pharmaceutical industry, the company proposed combining SAP Analytics Cloud for planning and SAP BPC. This tailored solution aligns with Harbin Pharma’s data management requirements and existing digital investments, helping the group take a significant step toward realizing its budgeting vision.