| ansell has held the dual role of Head of Corporate | | | | be cash rich, so there had not been the same |
| Procurement and Business Process Outsourcing at | | | | pressure to pursue lean exercises, as was the case |
| AstraZeneca since joining the organization in July | | | | elsewhere. Top down focus seemed to concentrate |
| 2008. Her task is to develop an intelligent sourcing | | | | more on addressing future talent needs and shaping |
| strategy, leveraging the corporation's inhouse | | | | the business for the future. With the events of last |
| expertise while at the same time optimizing the | | | | September, however, we've become almost radical in |
| sourcing process from an operational and | | | | our approach. For example, R&D would never |
| process-driven standpoint. | | | | traditionally be an option for outsourcing, as it is |
| SSON: Karen, can you describe your new role at | | | | heavily IP-focused and represents the crown jewels |
| AstraZeneca, and what it means for the corporation's | | | | of the organization. But we are now working with |
| sourcing strategy. | | | | that department to change strategies -- breaking |
| KM: Mine is essentially a new role, and I wear two | | | | down the end-to-end process and helping them |
| hats. One is corporate procurement, which is | | | | understand that not every part of the process has |
| structured under a global Chief Procurement Officer | | | | to be ring-fenced; that elements of it can be taken |
| and includes R&D, sales & marketing, operations, IS, | | | | out. |
| all US business and corporate procurement units. I | | | | SSON: How are you seeing changes in sourcing |
| support the centralized functions such as HR, finance, | | | | behavior as a result of this new approach? |
| tax, and treasury advisory, as well as all business | | | | KM: We have what we call a low cost country |
| travel services -- I'm effectively the procurement | | | | strategy -- so we are in China and India. We run small |
| lead for all indirect spend in those categories across | | | | sourcing teams in both markets, which have |
| the globe. So, I have corporate responsibility for P&L | | | | traditionally looked at the active product ingredients |
| as well as global category responsibility for | | | | or provided support for supply chain manufacturing, |
| procurement. | | | | as part of the operational piece. As we move |
| The other hat is the BPO Center of Excellence. To | | | | forward with our outsourcing strategy, we are |
| explain how this evolved: when we started really | | | | looking at the growing capability in all our emerging |
| looking across the business we realized that although | | | | markets, but especially from an original delivery |
| many departments were starting to do outsourcing, | | | | center point of view. So we are re-evaluating what |
| there was no standardized approach. We wanted to | | | | supplier relationship management looks like coming |
| ensure that we were optimizing all our outsourcing | | | | out of those areas. |
| activities as well as reducing risk at the enterprise | | | | Traditionally, when you put an offshore contract into |
| level. That effectively started us off in this direction. I | | | | a place like India, you then go ahead and try to |
| have been developing a small team since March this | | | | manage it from the US or the UK, or wherever you |
| year. We number three in total -- small but effective! | | | | are based. What we are looking at doing is to put |
| Called the BPO Center of Excellence, we support all | | | | some of that supplier management capability on the |
| outsourcing activities with coaching, consultancy and | | | | ground, alongside the preferred supplier relationship. |
| project execution, where needed. On a | | | | That is actually more closely aligned with the ethos |
| pan-AstraZeneca level, we're also monitoring all | | | | of our procurement methodology where we try to |
| outsourcing activities, ensuring they deliver to | | | | get closer to the supplier base and understand what |
| promises, track metrics, and manage some of the | | | | the innovation and insights look like, so we can marry |
| strategic relationships. We've created a steering | | | | them up to the business requirements and really drive |
| group at this level, which reports into the board. So | | | | some aggressive supplier development programs. |
| we are able to represent, end-to-end, across the | | | | SSON: What are your greatest challenges? |
| globe, and across all P&L units, what outsourcing | | | | KM: In theory we all understand the reasons for |
| looks like in AZ. | | | | going through this change, but in practice it is hard |
| SSON: And what were the drivers, apart from the | | | | navigating the organization. Also, as a traditional R&D |
| obvious 'optimization?' Why was it important to | | | | organization -- where it can take 12 years to get a |
| develop a new sourcing strategy? | | | | product to market -- we are used to operating at a |
| KM: It's primarily about risk management, consistency, | | | | slower pace. We're not like the financial services or |
| scale and leverage -- but also expertise and | | | | telecoms industries, where things change fast. Our |
| innovation. We've had a number of outsourcing | | | | organizational culture is built on proving a business |
| contracts in the past, which suffered from | | | | case before getting the go-ahead. So we are going |
| inadequate sharing of best practice, overlapping roles, | | | | through not insignificant changes. |
| paying for advice and toolkits many times over, etc. | | | | SSON: So, what does the sourcing future look like? |
| Where we've not done very well previously is in | | | | KM: We are looking at the future from a number of |
| ensuring, as a new area approaches BPO, that they | | | | different aspects. The Center of Excellence is itself |
| are aware of what's gone before, in order to extract | | | | currently owned by sourcing -- but it really needs to |
| the best value and the lowest risk out of our | | | | be owned by the business, and driven by it. I believe |
| knowledge base. | | | | it should become less of a procurement activity, and |
| So, in the past we'd been in the habit of looking | | | | more driven by the business. |
| around internally, deciding that no-one had the | | | | In terms of the procurement strategy, on the other |
| outsourcing experience we were looking for, and | | | | hand, our aim is to ensure risk mitigation and to bring |
| then buying that in. We'd go to an outsourcing | | | | innovation and insight from the supplier base into the |
| advisor and effectively purchase the entire team -- | | | | customer base. I think we are currently on that path, |
| including procurement people -- to take the project | | | | and expect that we'll be really good at it in a few |
| forward, write the RFP (Request for Proposal), help | | | | years. The next thing will then be to challenge |
| with supplier evaluation, project management work, | | | | ourselves to bring more diversity into what we are |
| etc. We also had the tendency to constantly rewrite | | | | doing, into our sourcing. Well need to expand the |
| our contracts, instead of working from a standard | | | | supply base to stay ahead of the game. We're |
| template. So we'd carry the same up front costs for | | | | currently driving our strategy through our key hubs -- |
| each new outsourcing deal. | | | | the UK, Sweden, and the US -- and are starting to |
| Now we have a set of tools and templates sitting in | | | | drive it through India and China, as well. But the |
| a library, which is accessible to all. From a financial | | | | market is always moving and the challenge is to |
| perspective we've already achieved considerable | | | | make sure you stay ahead, to benefit from new |
| savings. Speed and time is also much improved. For | | | | sourcing opportunities as these become available. |
| example, in tax and treasury we have some | | | | Karen started her career in the aerospace and |
| withholding tax issues, which are complex. We've | | | | defense industry with an early focus on 'indirect' |
| now set up some best practice work streams and | | | | category management, later moving into corporate |
| weÕve tagged people -- experts -- who sit in tax, | | | | categories such as HR, professional services, tax, |
| treasury, or the legal department, and who have the | | | | legal, and procurement. Having outsourced her original |
| prior experience to answer these questions quickly. | | | | job, she moved to Unisys and supported their |
| This effectively creates a COE. | | | | financial services outsourcing operation in India, where |
| SSON: How does your BPO work fit into | | | | she spent nine months. Later moves took hejr to |
| AstraZeneca's overall sourcing plan? | | | | Cable & Wireless, building on her outsourcing |
| KM: We are replacing the sourcing advisory piece of | | | | expertise in IT, Finance and Procurement, and then |
| the outsourcing lifecycle. So, as an area moves | | | | Barclays, where she supported HR professional |
| through the various stages of an outsourcing | | | | services categories.. |
| contract, we'll help with some of the up front | | | | About The Shared Services & Outsourcing Network |
| diagnostics, decision-making tools, and make or buy | | | | (SSON): |
| decisions. At the end-to-end sourcing advisory level, | | | | SSON is the largest and most established community |
| we look at RMPs, supplier selection, evaluation, due | | | | of shared services and outsourcing professionals, with |
| diligence, market or competitor intelligence - through | | | | over 25,000 members. |
| to contract or post contract management, from a | | | | SSON provides the roof under which key industry |
| commercial perspective. My team is effectively | | | | experts and organizations share their experience, |
| replacing the reliance on third party advisory at that | | | | knowledge and tools, and practitioner peers connect |
| point. | | | | with other all over the world, both face to face and |
| SSON: How do you manage that with a staff of only | | | | online. |
| three? | | | | SSON focuses on developing its members through |
| KM: Yes, three is small! But we are building more of a | | | | providing training, tools, and networking opportunities. |
| virtual network model -- building capability and | | | | SSON staff works from international offices in New |
| supporting existing project managers and | | | | York, London, Singapore, Sydney, Berlin and Dubai to |
| procurement people. In other words: we are trying to | | | | research current trends and developments in shared |
| teach people to fish rather than do it all for them. | | | | services. |
| SSON: Hoe did the crisis of last autumn affect AZ's | | | | More information visit the Shared Services & |
| sourcing strategy deployment? | | | | Outsourcing Network (SSON) website. Stay up to |
| KM: AZ had had outsourcing on its agenda for a | | | | date with SSON’s latest twitter posts at |
| while, but as the pharmaceutical industry tended to | | | | twitter. |