Life sciences companies operate in a rapidly evolving, highly regulated environment. Delivering exceptional customer experiences, maintaining compliance, and accelerating innovation are critical to staying competitive. But at the same time, complex global supply chains and fast-paced technological change exacerbate existing challenges.
In response, many organizations are prioritizing enterprise resource planning (ERP) transformations as a strategic enabler of growth and innovation. McKinsey analysis suggests that nearly 70 percent of ERP transformation programs, however, fall short of realizing their full potential. These failures usually relate to how organizations approach the transformation—not from the technology itself. Too often, programs are driven by system implementation goals rather than business outcomes, with limited alignment across leadership, unclear ownership, and insufficient focus on value realization.
How can organizations improve their success rates? By both changing the technology and rethinking how the transformation is led—anchoring it in strategic intent, cross-functional commitment, and disciplined execution. Leading life sciences companies can maximize an ERP transformation’s potential by focusing on three foundational principles:
- Leverage technology programs as a catalyst for business transformation
Use technology programs as an opportunity to challenge business strategy and requirements. Business outcomes are only fully realized when program leaders critically assess their business requirements and strategy during the process. Leading organizations do not simply digitize existing processes; they reimagine them from the ground up to meet future business needs. - Adopt an end-to-end perspective on value chains
Functional silos often hide inefficiencies and limit scalability. Taking a cross-functional view of the full value chain helps uncover root causes of bottlenecks and align processes, systems, and data across business functions. - Design integrated solutions beyond ERP
Successful digital transformation requires integrating system capabilities with complementary technologies to enable deeper automation, enhance data accuracy, and build stronger cross-functional collaboration.
The following examples illustrate how applying these principles to ERP and tech transformations such as S/4HANA migrations generate measurable impact across five business outcomes.
Business outcome 1: Creating exceptional customer experiences
Example of principle 1 | Leverage technology programs as a catalyst for business transformation: One company redefined its pricing approach during its ERP migration. The company realized its strategy of maintaining one pricing approach across all business units resulted in more than eight million pricing conditions and 300-plus manual steps to accommodate needs from each business unit. This disrupted order accuracy and customer transparency.
The organization challenged its pricing architecture to reduce configuration volume, and realigned sales processes with business units to increase flexibility. As a result, customers began receiving more accurate order confirmations, clearer pricing breakdowns, and improved visibility into their purchasing terms.
Example of principle 2 | Adopt an end-to-end perspective on value chains: Another company found that fragmented ownership across commercial, distribution, and product compliance functions led to incomplete or inaccurate order information. While the commercial teams would confirm an order to customers, distribution and compliance would find missing or inaccurate data. This created delays, frequent distribution disruptions, and poor customer experience, especially when issues surfaced late in the fulfillment process.
To address this, it implemented a Clean Order concept, bringing together all relevant functions to design an end-to-end process that ensured orders were complete, accurate, and ready for execution from the start. This shift reduced downstream firefighting, improved delivery reliability, and enabled more predictable order confirmations, ultimately enhancing the overall customer experience.
Example of Principle 3 | Design integrated solutions beyond ERP: Several companies uncovered inconsistent pricing data across customer relationship management (CRM) systems, ERP, and e-commerce platforms, leading to misaligned customer information, order delays, and confusion during the ordering process. Customers often received conflicting updates depending on the channel, which eroded trust and created service challenges.
To resolve this, one company designed an integrated pricing solution that extended beyond ERP—aligning data and logic across all platforms. This ensured a consistent and transparent customer experience across every touchpoint. The integrated setup also created the potential to match industry standards of a 20–30% reduction in order cycle time and a 10–15% increase in on-time delivery, reinforcing customer trust and enabling more scalable operations.
Business outcome 2: Achieving consistent regulatory compliance
Example of Principle 1 | Leverage technology programs as a catalyst for business transformation: One Life science company identified legacy compliance practices that were inconsistent across regions and business units. Inconsistent handling of biological materials and delays at borders due to missing or incorrect licenses resulted in shipment holds and destruction and annual losses of up to $1 million per border with over 10 national locations affected.
To address this, it critically evaluated its compliance processes and challenged long-standing practices. The ERP program led to the senior leadership team endorsing a standardized global compliance model that clarified roles and responsibilities across functions and permitted local exceptions only when legally required. This shift significantly reduced complexity and strengthened compliance accountability across the enterprise.
Example of Principle 3 | Design integrated solutions beyond ERP: Another company realized that its manual and disconnected license check processes created compliance risks and delayed shipments—impacting customer service and product availability.
It implemented Global Trade Services (GTS) to automate license management and provide real-time visibility into compliance requirements. This enabled accurate license checks before shipments were released, reducing errors, minimizing product destruction, and creating a scalable, reliable compliance model for future growth.
Business outcome 3: Boosting operational efficiency
Example of Principle 2 | Adopt an end-to-end perspective on value chains: Disconnected processes across commercial, manufacturing, quality, and logistics functions may limit operational scalability and responsiveness. Unclear process ownership, inconsistent configurations, and siloed ways of working introduced delays, duplication, and errors across the value chain. This kind of fragmentation can be common at large organizations where highly specialized functions often operate in silos and legacy systems make cross-functional coordination difficult.
To address this, one company took an end-to-end approach to streamline operations. It clarified process ownership across functions, connected sales divisions with business units to simplify commercial configuration, and standardized roles related to shipment sampling. These steps improved coordination and eliminated redundant efforts across the value chain.
Example of Principle 3 | Design integrated solutions beyond ERP: In another case, the lack of integration across CRM, e-commerce, and SAP platforms caused frequent data mismatches, rework, and delays. In response, the company implemented touchless processing and digitized core operational workflows. A joint governance model was introduced to align digital platforms, ensuring accurate data flow and process integration. The result was a leaner operating model with greater accuracy, increased automation, and improved readiness for future technology enablement.
Business outcome 4: Empowering commercial teams
Example of Principle 2 | Adopt an end-to-end perspective on value chains: Some companies found fragmented systems and duplicate customer data hampered commercial agility. One sales team had to rely on manual workarounds to apply pricing changes or promotions, for example, leading to slow response times and inconsistent messaging to customers.
To resolve this, the organization took a comprehensive view of the end-to-end commercial process. It simplified pricing structures and centralized customer master data within S/4HANA to establish a single source of truth. This improved data integrity, accelerated pricing simulations, and enabled faster promotional execution—empowering commercial teams to engage customers more effectively and support revenue growth.
Business outcome 5: Strengthening supply chain resilience
Example of Principle 2 | Adopt an end-to-end perspective on value chains: One company faced issues in its supply and demand planning due to fragmented ATP (Available-to-Promise) logic and inconsistent planning cycles across systems and regions. This resulted in recurring fulfillment disruptions, mismatched supply, delayed responses, and last-minute firefighting.
To address this, the organization designed an integrated supply and demand workflow, which harmonized planning horizons across regions and unified global inventory views. This enabled better coordination between commercial and supply chain functions and improved decision-making through shared visibility into planning timelines and inventory constraints.
Example of Principle 3 | Design integrated solutions beyond ERP: Manual planning processes and disconnected tools prevent real-time responses to changing demand and supply situations.
One company integrated ERP with advanced planning tools and dynamic ATP functionality to enable real-time inventory simulations and automated planning. This gave commercial and service teams direct access to up-to-date inventory information, enabling faster, more accurate decisions and improving alignment between supply and demand.
Translating the principles into execution
When executed successfully, the three principles above manifest as a set of practices critical to enabling business value:
- Fit-to-standard mindset: Focuses efforts on high value areas by maintaining 85% alignment with ERP best practices and 90% simplification of core processes, enabling a lean, scalable system design tied to business KPIs.
- Sustained executive sponsorship: Ensures senior leaders engage consistently to steer transformation decisions, remove roadblocks, and align on pace and strategic direction.
- Joint business–IT ownership: Promotes alignment between technical implementation and business value, reducing rework and ensuring joint accountability.
- Proactive change management: Drives behavioral adoption, equips teams with new capabilities, and sustains momentum across commercial, compliance, and supply chain domains.
- Early investment in data quality: Supports automation, fulfillment accuracy, and reliable KPI tracking.
By approaching tech modernization and ERP transformations in this way, life sciences companies position ERP not as a technical upgrade—but as a catalyst for enterprise-wide business value. In a sector where precision, compliance, and quality are non-negotiable, ERP becomes a strategic lever for sustainable growth, operational excellence, and customer trust.
SAP is part of McKinsey’s open ecosystem of alliances and acquisitions.
Bjørnar Jensen is a senior partner in McKinsey’s Zurich office; Darwin Deano is a partner in the Chicago office, where Chloe Peng is a consultant; and Kathleen Li is an associate partner in the New York office.