Global Process Ownership

Global Process OwnershipAstraZeneca

James Kulda

Shared Services & Outsourcing WeekMarch 9th, 2012

Everyone cares about healthYoung or old. Rich or poor. Around the world. It’s one thingthat we all have in common

AstraZeneca is here to makea difference to people’s health

2

70 years of innovative medicines Touching the lives of many people

Doctors and patients

People who pay for healthcare

Our shareholders

Our employees

The wider community

3

Our focus is on six areas of medicine

Cancer

Cardiovascular disease

Infection

Gastrointestinal disease

Neurological disorders

Respiratory & inflammatory conditions

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We employ over 61,000 people47% in Europe, 30% in the Americas, 23% in Asia, Africa and Australasia

We invest over $4 billion in R&D each yearand have over 15,500 people in our R&D organisation

In 2011, our worldwide sales totalled $33.6 billion

2011

$33.6B

Top 8%

Alongside our commitment to competitiveness and performance, we continue to be led by our core values to achieve sustainable success. We are positioned in the top 8% in the sector in the Dow Jones World and STOXX (European) Sustainability Indexes.

Process Improvement Road Map

Global Finance Services Pre-Consolidation

GFS Locations – Post Consolidation

Process VisionOptimize our processes: adding value for reinvestment and leading

Pharma by simplifying, harmonizing and innovating

Delivered through:• Standardization and

globalization of processes• Application functionality

targeting “Lights-off”automation

• Shared Service Centers• Common Service Levels• Common reporting• Common controls

• Optimized cash-flow / working capital• Adherence to compliance standards• Performance transparency• Measurable continuous improvement

• Flexible processes• Competitive processing costs• Top quartile service levels

Resulting in:

Process VisionOptimize our processes: adding value for reinvestment and leading

Pharma by simplifying, harmonizing and innovating

Delivered through:• Standardization and

globalization of processes• Application functionality

targeting “Lights-off”automation

• Shared Service Centers• Common Service Levels• Common reporting• Common controls

• Optimised cash-flow / working capital• Adherence to compliance standards• Performance transparency• Measurable continuous improvement

• Flexible processes• Competitive processing costs• Top quartile service levels

Resulting in:

Further reduce the

cost to serve

Process VisionOptimize our processes: adding value for reinvestment and leading

Pharma by simplifying, harmonizing and innovating

Delivered through:• Standardization and

globalization of processes• Application functionality

targeting “Lights-Off”automation

• Shared Service Centers• Common Service Levels• Common reporting• Common controls

• Optimised cash-flow / working capital• Adherence to compliance standards• Performance transparency• Measurable continuous improvement

• Flexible processes• Competitive processing costs• Top quartile service levels

Resulting in:

Top Quartile Service

Process VisionOptimize our processes: adding value for reinvestment and leading

Pharma by simplifying, harmonizing and innovating

Delivered through:• Standardization and

globalization of processes• Application functionality

targeting “Lights-Off”automation

• Shared Service Centers• Common Service Levels• Common reporting• Common controls

• Optimised cash-flow / working capital• Adherence to compliance standards• Performance transparency• Measurable continuous improvement

• Flexible processes• Competitive processing costs• Top quartile service levels

Resulting in:

Improve Cash-to-

Cash

Process VisionOptimize our processes: adding value for reinvestment and leading

Pharma by simplifying, harmonizing and innovating

Delivered through:• Standardization and

globalization of processes• Application functionality

targeting “Lights-Off”automation

• Shared Service Centers• Common Service Levels• Common reporting• Common controls

• Optimised cash-flow / working capital• Adherence to compliance standards• Performance transparency• Measurable continuous improvement

• Flexible processes• Competitive processing costs• Top quartile service levels

Resulting in:

Compliance

GFS Roadmap – What is it?The GFS Roadmap is a 3 year strategic program of initiatives to address current process challenges and deliver “Best in Pharma”processes

Focus is to deliver value in 4 key areas:

Objective Setting

Capture & PrioritizeInitiatives

Analyze & DocumentInitiatives

Socialize & Business Case

Mobilize Delivery

Benefit realization

Close

Stakeholder Management

Continue to drive down cost to

serve

Step-up to the AZ compliance challenge

Release working capital from the cash conversion

cycleSignificantly improve

customer service

15

Target Role of the GPO

Optimize AZ Transactional Finance Processes end-to-end:

- Process Vision → Benchmarking → Roadmaps

- Design Authority for change

- Accountable for process architecture

- Drives continuous improvement

Process Ownership by Organic Growth

• Change is rarely a linear process• Multiple change programs with overlapping and

conflicting priorities

• Mandates are difficult to obtain and enforce in global matrix organizations

• Our strategy is to “Show, not tell - Build it and they will come”

• Optimize processes in parallel with ongoing change projects

• Recruit a team of expert GPOs globally• Give them design authority within existing scope• Offer GPO expertise to major change programs

outside existing GFS• Demand will grow and mandate will expand as GPO

value is recognized across the business

GPO’s should effect change without a mandate

• Deep process and application knowledge and experience

• Strong relationship and Strategic Influencing skills

• Skilled large scale change management across functions and geographies

• Restless in pursuit of improvement

• No ivory tower – “Architects with muddy boots”

• Resilient

Process Practice Community

NAM LATAM

GFS UK/SE

GPOLeader

Process Community

Other SME’s

CEEMEA

Other Stakeholders

APAC

External Netw

orks

For:1. Sharing best practices2. Standardizing processeswithin / across regions

Virtual Communities

Through:1. Benchmarking2. Coaching3. Leveraging local /global / external practices

Continuous Improvement

Why End-to-End Matters: Paid-on-Time

Business users complete any necessary goods receipts, service confirmations or financial approvals via workflow

System converts approved invoice into payment run proposal

P2P Accounts Payable “complete”any postings not made automatically

Supplier prints invoice (note 1) and posts to AZ nominated PO box

A B C D E F

1-2 days 0-3 days 0-5 days1 day Minimum 1 day

3rd party scan & OCR invoice (note 2)

Blue = A-C

Yellow = C-D

Green = D-F

GFS-UK

GFS-SE Shows percentage of all invoices that are not touched by P2P team (STP – straight

thru processing)For these invoices C-D = 0