AstraZeneca outsourced their accounts payable process to reduce costs and improve service delivery. They transitioned from local processing units to a shared services model with Genpact over 2.5 years. This centralized the complex AP operating model and improved key metrics like cost per invoice processed, payment on time rates, and customer service ratings. While the initial focus was on cost savings and stability, AstraZeneca aims to further transform the process through standardization, technology exploitation, and continuous improvement culture.

1. Outsourcing AP can reduce costs, but can it
improve your service delivery too?
AstraZeneca’s BPO journey
Hans-Peter Sammer, Payment Services Lead EMEA
December 2011

2. AstraZeneca context
Global Pharmaceutical Company
14 major R&D sites in 8 countries, 23 supply and manufacturing sites in
16 countries
We employ over 61,000 people, 47% in Europe,
30% in the Americas, 23% in Asia, Africa and Australasia
We invest over $4 billion in R&D each year
and have over 15,500 people in our R&D organisation
A 70-year track record of innovation that includes the
introduction of many world-leading medicines.
In 2010, our worldwide sales totalled $33.3 billion, with operating profit
of $11.5 billion.

3. AGENDA
3

4. AGENDA
4

5. Our industry faces significant challenges...and
opportunities
•AstraZeneca is a global,
innovation-driven, integrated
biopharmaceutical company.
•Our mission is to make the
most meaningful difference to
health through great medicines
that bring benefit for patients
and add value for our
stakeholders and society
5

6. Finance Operating Model was complex…
Business Partners
CEO
Business Analysts /
‘Controllers’
CFO Specialist Finance
2 34
Functions
Transactional Finance
10 17
161
304 5
1
R&D Operations ISMO NAM Medimmune
8 16 3 2 20 42
23 32 37 1
1 1
5 15 22
4 41
85
Regions Regions
5 12
3
1 2
Areas
1 3
Sites Plant Markets Canada
1 9
52 28 195
5 38 4
3 22
13
2 11 91
66 324* * ~250 in SSC for W-Europe

7. ….and needed to be simpler
7

8. Issues in Accounts Payable
Slow to adapt to change
Various levels of specialist AP knowledge in
Functions across the Regions
Average cost to process an invoice (Europe):
2010: 4.50 USD
Payment On Time (Europe):
Q3 2010: 77%
Customer Service (Europe):
Service rated “acceptable or above”: 54% in 2010
8

9. AGENDA
9

10. From Local Units to Shared Services in 2½ Years !
Building a new Global
Implementing Bridge Organisation
Consolidating onto SAP
GTF EMEA &
Central
Genpact AZ, Lublin
Genpact AZ, Cluj
GTF NAM
GTF LATAM
Genpact AZ,
Rabat Genpact AZ,
Genpact AZ, Delhi GTF APBS
Guatemala
Genpact AZ,
Sao Paolo
A centre for
Transactional Finance
Global Visibility of Service and
Process Performance
10

11. Transition Approach: Accounts Payable
11

12. Accounts Payable Activities in Scope
- Before BPO
Approval – Verify Run Forward
Verify
Vendor Invoice Payment invoices to
problems
Master Volumes proposal Scanning
Form
Sort Validate
New invoices, and Follow-up
Scanning Release Debit Payment
Vendor Set statements Approve problems
Office – Payments Balance queries
up Separate Expenses invoices
PO Box
Data Coordinatio
Posting of Escalate
Vendor Extracted Cancel n with 2nd
invoices problems Reporting/
changes Emails - through payments Line
KPI’s
Helpdesk OCR support
Vendor Validation Arrival Verify
AZ- of OCR Checks/ Chasing
Master payment Vendor
Special extracted STP resolution
clean up rejects Reconciliati Queries
invoices data on
Supplier Receive Sort/OCR/ Invoice Exception Disbursement Miscellaneous Helpdesk
Set Up Invoices Validation Processing Resolution & Payment/ Activities
Rejects
Scope
12
AZ Scanning AZ Banking
Provider

13. Accounts Payable Activities in Scope
- After BPO
Approval – Verify Run Forward
Verify
Vendor Invoice Payment invoices to
problems
Master Volumes proposal Scanning
Form
Sort Validate
New invoices, and Follow-up
Scanning Release Debit Payment
Vendor Set statements Approve problems
Office – Payments Balance queries
up Separate Expenses invoices
PO Box
Data Coordinatio
Posting of Escalate
Vendor Extracted Cancel n with 2nd
invoices problems Reporting/
changes Emails - through payments Line
KPI’s
Helpdesk OCR support
Vendor Validation Arrival Verify
AZ- of OCR Checks/ Chasing
Master payment Vendor
Special extracted STP resolution
clean up rejects Reconciliati Queries
invoices data on
Supplier Receive Sort/OCR/ Invoice Exception Disbursement Miscellaneous Helpdesk
Set Up Invoices Validation Processing Resolution & Payment/ Activities
Rejects
Scope
13
Genpact Scanning Genpact Banking
Provider

14. Impacts on Accounts Payable after BPO
Centralised processing enables increased
flexibility
Import of best practices
Average cost to process an invoice (Europe):
2010: 4.50 USD
2011: 2.56 USD
Payment On Time (Europe):
Q3 2010: 77%
Q3 2011: 86%
Customer Service:
Service rated “acceptable or above”: 54% in 2010
70% 2011 H1
85% 2011
H2
14

15. AGENDA
15

16. Governance Bodies – A Clear Escalation Route
We have put in place a clear BAU
governance structure………
……..this model is mirrored from
transition.

17. Operating Principles – BAU
• Minimum Disruption… Expectations Met
• Complete Transparency & Control
• Comprehensive Risk Mitigation
• Transfer of Process/Operations Capability
17

18. AGENDA
18

19. Its not what we do, it is the way that we do it….
Do again…. Do Differently…
•Clear Executive Sponsorship and senior buy- • Pay more attention to the IS Solution
in
• Remove ‘problem’ people earlier
•Personal visibility by senior team members
•Clarify personal position of those who will
•Tell people what you can, when you can lead change ASAP
•AZ team primarily in-house (supplemented by
specific external experts) and core team
•Don’t assume the best – you can only be
consistent through project
disappointed
•Project run at regional / country level
•Listen even more for ‘weak signals’
•Look for “doers” with a strong network of
contacts
•Choose a Provider that is a good cultural fit
and build a partnership
•Use proven solutions wherever possible
•IS - Have a plan B (and C and D…)
•Set and closely manage to a budget -strong
19
discipline

20. What is next for AP?
Initial focus – Process Lift & Shift Next Steps – Transformational Change
► Operational savings from BPO ► Customer-focused, continuous
► Ongoing changes to ensure stable and improvement culture
effective service ► High-quality process standardisation
► Further exploiting technology and process
opportunities
► Challenging the status quo in a structured
way
Process
We are here Roadmaps
Cost Efficiency / Performance Level
GTF ation
timis
or op
Drive f
mi
gra
tio
n
n
tio Time
isa
a bil
St
Reduce
the pain

21. Summary
AstraZeneca is a global,
innovation-driven, integrated
biopharmaceutical company.
Our mission is to make the
most meaningful difference to
health through great medicines
that bring benefit for patients
and add value for our
stakeholders and society
21

22. omments
Questions & Comments
Questions & Comments
ions & Comments