September 2013
Document N128
ROI CASE STUDY
QUALIAC
CEGEDIM
T HE BO TTOM LI NE
Cegedim deployed Qualiac to replace its existing internally-developed ERP application
because it needed a more robust centralized solution that could support its global growth.
Nucleus found moving to Qualiac enabled Cegedim to gain better visibility and efficiency
across its financial transactions. Adopting Qualiac also helped Cegedim to avoid
significant initial and ongoing consulting costs because the configurable nature of the
solution accelerated initial deployment and enabled Cegedim’s internal IT staff to make
changes and enhancements to the application over time.
ROI: 258%
Payback: 8 months
Average annual benefit: $4,236,209
T HE CO MPA N Y
Founded in 1969, Cegedim is a global technology and services company specializing in
health care. Cegedim provides specialized software, services, technology tools, data, and
databases for life sciences companies, health care professionals, and insurance companies.
Headquartered in Paris, France, Cegedim employs 8,100 people at 60 subsidiaries in more
than 80 countries. The company is listed on the Paris EURONEXT stock exchange and
reported revenues of €922 million in 2012.
T HE C H ALL E NGE
Cegedim had grown both organically and by acquisition, including the acquisition of USbased Dendrite in 2007, and by 2007 had 60 different subsidiaries, many with their own
autonomous business operations. At headquarters, the company was outgrowing an
internally-developed application that it used to track and manage its finance and
accounting transactions.
To position itself for further growth, Cegedim recognized that it needed to take a more
global approach to its financial management operations and invest in standardizing on a
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Document N128
common ERP platform that could help the company increase efficiency and visibility.
While Cegedim wanted one centralized standard for ERP, it also wanted the application to
be flexible enough to:



support the specific needs and demands of its subsidiaries
support multiple operating systems, databases, and middleware
enable business analysts to make changes without coding.
Types of Benefits
Direct 69%
31% Indirect
T HE S T RAT EG Y
In 2007 Cegedim began exploring potential ERP solutions including Qualiac, SAP, and
Oracle. After extensive due diligence including reference checks, Cegedim selected
Qualiac for three main reasons:

Image. Qualiac’s references confirmed Qualiac’s reputation as a provider that was
committed to client success and could meet Cegedim’s global needs. Cegedim also
believed it would receive more direct attention from Qualiac than the other vendors.

Cost. Cegedim determined that an Oracle or SAP deployment would be significantly
more expensive than Qualiac, both in terms of initial licenses and consulting and
ongoing support and development.

Skills transfer. Because of the configurable nature of the Qualiac solution and
Qualiac’s services business model, Cegedim believed its internal team could learn
enough about the application through the services engagement in the initial
deployment phase that they could continue to implement and modify Qualiac
modules for Cegedim’s various subsidiaries as needed without additional consulting.
Cost : Benefit
Ratio
1 : 3.7
Cegedim began a phased deployment of Qualiac in October 2008 with an internal team of
six working closely with the Qualiac services team to deploy financial management,
accounts payable and receivable, and inventory management modules at headquarters.
Because of the configurable nature of the solution and the skills transfer, Cegedim was
able to complete the initial phase of the deployment at only 60 percent of the projected
consulting budget.
Beyond the initial project, Cegedim staff have continued to implement modules as
demanded by the different subsidiaries, with the appropriate modifications made to
support their processes. Today Cegedim has approximately 700 users of Qualiac, and
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Document N128
plans to continue to expand its deployment using internal staff for development and
implementation.
KE Y BENE FI T ARE AS
Moving to a more robust and complete ERP solution has enabled Cegedim to position
itself for further growth while improving visibility and controls across its operations.
Cumulative Net Benefit
12,694,377 5,837,192 980,008 Year 1
Year 2
Year 3
Key benefits of the Qualiac deployment include:

Improved efficiency. Moving to a centrally managed but localized ERP platform has
enabled Cegedim to create standard workflows for transaction approvals and other
functions that were previously manually tracked, reducing the overall time to process
transactions.

Increased visibility. Having a centralized data store and the Qualiac reporting and
analysis capabilities has helped Cegedim decision makers to have more ready access
to information for decision making and an ongoing better understanding of
operational performance.
KE Y COS T A RE AS
Cost for the project included software, hardware, consulting, personnel, and training.
BEST PRACTICES
Key to Qualiac’s value proposition is the configurable nature of the application, which
enables Cegedim’s existing staff to deploy new modules or make modifications as needed
based on the demands of its subsidiaries without the consulting costs that would be
associated with a traditional ERP customization. This enables lower overall cost of
ownership on an ongoing basis as well as the flexibility for Cegedim to make changes to
its ERP environment as its business needs change.
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Nucleus Research is the leading provider of value-focused technology research and advice.
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September 2013
Document N128
Net Cash Flows
6,857,185 4,857,185 2,857,185 (1,877,177)
Initial
Year 1
Year 2
Year 3
CALCULATING THE ROI
Nucleus calculated the initial and ongoing costs of software, hardware, consulting,
personnel, and training to quantify Cegedim’s total 3-year investment in Qualiac.
Direct benefits quantified included the avoidance of additional administrative staff that
would have been needed to support the same global reporting and visibility without
Qualiac and avoidance of additional professional service fees that would have been
required without Qualiac. Indirect benefits quantified included the productivity gains
associated with the automation of previously manual transaction approval workflows,
calculated based on the 500,000 annual transaction currently routed through the Qualiac
application.
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Nucleus Research is the leading provider of value-focused technology research and advice.
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FINANCIAL ANALYSIS
Qualiac
Annual ROI: 258%
Payback period: 0.7 years
ANNUAL BENEFITS
Direct
Pre-start
Year 1
Year 2
Year 3
0
2,014,250
4,014,250
6,014,250
Indirect
0
1,802,885
1,802,885
1,802,885
Total per period
0
3,817,135
5,817,135
7,817,135
Pre-start
Year 1
Year 2
Year 3
0
CAPITALIZED ASSETS
Software
Hardware
Project consulting and personnel
Total per period
DEPRECIATION SCHEDULE
0
0
0
10,000
0
0
0
0
0
0
0
10,000
0
0
0
Year 3
Pre-start
Year 1
Year 2
Software
0
0
0
0
Hardware
0
2,000
2,000
2,000
Project consulting and personnel
0
0
0
0
Total per period
0
2,000
2,000
2,000
Pre-start
Year 1
Year 2
Year 3
1,176,000
235,200
235,200
235,200
0
0
0
0
Consulting
188,100
4,750
4,750
4,750
Personnel
180,000
720,000
720,000
720,000
Training
323,077
0
0
0
0
0
0
0
1,867,177
959,950
959,950
959,950
FINANCIAL ANALYSIS
Results
Year 1
Year 2
Year 3
Net cash flow before taxes
(1,877,177)
2,857,185
4,857,185
6,857,185
Net cash flow after taxes
Annual ROI - direct and indirect benefits
(1,036,947)
1,572,352
152%
2,672,352
205%
3,772,352
258%
56%
432,540
109%
2,766,675
162%
5,846,038
1,898,538
1,585,676
EXPENSED COSTS
Software
Hardware
Other
Total per period
Annual ROI - direct benefits only
Net Present Value (NPV)
(1,036,947)
Payback period
Average Annual Cost of Ownership
3-Year IRR
0.7 years
1,877,177
2,837,127
186%
186%
FINANCIAL ASSUMPTIONS
All government taxes
45%
Cost of capital
7.0%
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All calculations are based on Nucleus Research's independent analysis of the expected costs and benefits associated with the solution.
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Page 6
By the Numbers Cegedim's Qualiac Project
Cost : Benefit
Ratio
The total time to value, or payback period, for the project
THE RESULTS
Streamlined processing of 500,000 invoices per year
Avoided additional administrative staff at 60 subsidiaries
Avoided professional services costs
1 : 3.7
$4,236,209
Average annual benefit
Number of users: 700
6
Months
8
258%
months
Annual Return on Investment
THE PROJECT
Cegedim deployed Qualiac to support its global growth. Nucleus found moving to Qualiac enabled Cegedim to gain better visibility and efficiency across its financial transactions, and avoid significant initial and ongoing consulting costs. The configurable nature of the solution accelerated initial deployment and enabled internal IT staff to expand and enhance the deployment over time. Total time for the company to deploy Qualiac
“The skills transfer that happened as part of our initial services engagement enabled our internal team to continue to deploy and enhance the solution as our subsidiaries demand it.”
‐ Erick Fradet, Groupe Cegedim
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Nucleus Research Report N128 ‐ Qualiac ROI case study ‐ Cegedim