CDP Group partnered with Merck to complete a comprehensive integration of compensation and HR systems across Greater China over a period of approximately two years. Previously, Merck operated 13 legal entities in China with approximately 2,800 employees, yet lacked a unified payroll system. Payroll cycles and rules varied by region, forcing the HR team to rely on manual processes and multiple outsourcing providers for an extended period. This resulted in fragmented data, low efficiency, and delayed the implementation of Merck’s global HRIS system in China.
Low accuracy, poor timeliness, and difficulty in managing regional branches—these issues not only impacted the employee experience but also slowed down the implementation of Merck’s global HRIS system in China.
The “Sweet Burden” of Business Expansion: Without a Unified System, Every Month Is a “Manual Payroll Battle”
Merck employs 50,000 people worldwide, with operations spanning three major sectors: pharmaceuticals and healthcare, life sciences, and high-performance materials. In 2014, the Group’s total revenue reached 11.5 billion euros, with the Pharmaceuticals and Healthcare segment accounting for 58%.
In China, Merck operates 13 legal entities, with employees spread across more than 90 cities and regions, totaling approximately 2,800 people. As the business footprint continues to expand and the organizational structure grows increasingly complex, the existing global system can no longer support the actual operational needs of Greater China.
The most pressing challenges centered on compensation management:
- Lack of a unified payroll system, with 13 legal entities operating independently and varying widely in payroll cycles and rules
- Manual payroll processing was labor-intensive, overwhelming HR teams and resulting in low efficiency
- Multiple global payroll outsourcing providers were used in parallel, leading to scattered data and difficulty in centralized control
- Complex systems and processes, with the expansion of branch offices further exacerbating management difficulties
From Fragmented Operations to a Unified Platform: CDP Bridges the Gap Between Global Standards and Local Execution
Global headquarters recognized that failing to address the integration of compensation and HR systems in Greater China would not only impact daily operational efficiency but also hinder Merck’s global efforts to advance its unified HRIS strategy.
In other words, Merck needed more than just a system implementation project; it required a deep integration spanning both processes and data.
It was at this juncture that Merck began evaluating partners in the Asia-Pacific region. After comprehensively assessing technical capabilities, industry experience, and localized service capabilities, Merck selected CDP Group. Key considerations included:
First, CDP has a track record of successful “one-stop” SaaS-based human capital management implementations across the Asia-Pacific region;
Second, CDP possesses the technical capability to deeply integrate with the SAP platform, aligning closely with Merck Global’s technical roadmap;
Third, as a Chinese multinational corporation, CDP is capable of seamlessly bridging global standards with localized requirements.
CDP’s One-Stop Solution: System Implementation + Process Integration + Unified Compensation in Two Years
After the project officially launched, CDP worked alongside the Merck team to complete the comprehensive restructuring of the Greater China region’s compensation and HR systems in approximately two years, divided into three phases.
Phase 1: Getting the Global System Up and Running
The CDP project team collaborated with Merck’s global team to implement the Merck HRIS core system across Greater China. The key to this phase was not to start from scratch, but to adapt the global system to China’s specific business context. The system went live successfully.
Phase 2: Consolidating Dispersed Processes
System go-live was just the foundation; the real challenge lay in integrating 13 distinct payroll logic sets. Merck engaged Accenture to streamline its payroll processes. Drawing on its expertise in professional compensation services, CDP offered numerous constructive suggestions and worked with Accenture and Merck to unify payroll across 13 legal entities.
Immediately following this, CDP helped Merck establish and officially launch online attendance and leave management systems. Employee leave requests and attendance records are now managed digitally, eliminating the need for HR to manually reconcile Excel spreadsheets across different locations.
Phase 3: Centralized Management via a Unified Platform
Subsequently, CDP provided Merck with comprehensive payroll outsourcing services, integrating all 13 payroll calculation logic sets onto a single platform. As a result, payroll processing for over 2,800 employees across Greater China is now unified, standardized, and automated.
Notably, following Merck’s acquisition of Sigma, CDP swiftly launched the Sigma Roll-out project, seamlessly integrating the new company into the existing system—demonstrating the solution’s scalability and replicability.
Single Source of Truth, 100% Accuracy, Employee Self-Service: More Than Just Payroll—It’s About Overall Efficiency
The project’s impact extends far beyond improved payroll accuracy.
At the data level, systems, platforms, and data have been fully integrated, providing all downstream subsystems with a single, trusted source of truth for the first time.
In terms of employee experience, every employee can now independently access electronic pay stubs and tax information through the online system, eliminating the need for repeated email correspondence or visits to HR for verification.
Regarding cost efficiency, the cloud-based solution has standardized payroll processes, optimized the allocation of global and regional resources, and significantly reduced internal management costs.
Strategically, Merck’s global HRIS system has been successfully implemented in China, providing a replicable methodology for future rollouts across other countries and regions in the Asia-Pacific.
The project also received the “Best in Class Award for Payroll Strategy and Management” from the internationally renowned Brandon Hall Group, establishing itself as a benchmark case for digital transformation in human resources within the pharmaceutical and chemical industries.
From Supporting Business to Driving Business: CDP Empowers a Value Leap in Human Capital Management
As Merck’s operations in China continue to expand, CDP’s services have also deepened. From initial payroll outsourcing and system implementation to subsequent M&A integration and continuous process optimization, the partnership has transcended a traditional vendor relationship.
Following Merck’s acquisition of Sigma in 2016, CDP swiftly launched the Sigma Roll-out project, a practice that demonstrated the solution’s scalability and replicability. As the Merck continues to expand, the collaboration between CDP and Merck China will deepen further.
For multinational corporations striving to balance globalization and localization, Merck’s Greater China initiative offers a clear lesson: while technology platforms can be standardized globally, implementation must respect local business logic. The key to bridging these two is a partner who understands both global standards and local nuances.
This integrated “system + platform + data” methodology is not only applicable to the pharmaceutical and chemical industries but also provides a replicable path for multinational corporations facing similar challenges in managing multiple legal entities, payroll rules, and branch offices. As more and more companies begin to realize that the value of human capital management lies not in “precise calculations” but in “flexible application,” the industry’s tipping point may not be far off.
