The biopharmaceutical giant AstraZeneca continues to challenge itself to maximise value from its outsourcing activities. James Simmonds, global BPO lead, tells CEO about establishing a corporate outsourcing centre of excellence to streamline best practice.
AstraZeneca is an integrated, innovation-driven business and our mission is to make a meaningful difference to patient health through great medicines.
We have a global reach but local knowledge, being active in over 100 countries, with a growing presence in emerging markets like China, Mexico, Brazil and Russia. Combining our disease-area expertise with country-specific knowledge helps us to market and sell medicines that best meet local needs.
To be successful we need to be a lean and agile organisation. We continue to drive our strategy, while simplifying and streamlining our infrastructure and focusing on costs. So it's against this backdrop of a challenging business environment that AstraZeneca's procurement organisation has set itself the goal of becoming excellent in many areas of procurement, including managing any outsourcing projects.
Setting standards in outsourcing
We have been outsourcing activities for more than ten years. As with most companies, we began with IT and then moved onto IS and other back-office functions such as transactional finance and various HR services. We have also considered a broader set of business activities, where there is a clear business benefit in using the expertise from other organisations. Some outsourcing here can complement our clear strategic goal of partnering with other scientific organisations with the aim of developing new potential treatments for patients.
Just over two years ago, procurement decided to improve the adoption of outsourcing best practice and learning across the company by establishing an outsourcing governing and oversight body, the AstraZeneca Outsourcing Steering Group, and a corporate outsourcing centre of excellence, the AstraZeneca Outsourcing Centre of Excellence - CoE.
The AstraZeneca Outsourcing Steering Group is chaired by the company's chief procurement officer and is composed of senior business leaders from procurement and representing the following business areas: commercial operations, R&D, HR, IS, finance and legal. Its remit is to provide a consistent, coordinated approach and procurement governance to maximise the value and minimise the risk of outsourcing to the business. Key terms of reference of the Steering Group are:
- sharing best practice and key insights on the business area medium to long-term plans
- ownership and mandating of AZ procurement outsourcing approach, tools and governance, and compliance framework
- ownership and maintenance of AZ's service provider landscape against preferred supplier lists
- where the OSP delivers multiple material contracts within different business areas, provides support for pan-AstraZeneca account management OSP reviews.
A centre of expertise
The AstraZeneca Outsourcing Centre of Excellence is composed of a small team of experienced outsourcing professionals recruited from within and outside the company with a remit to provide the following support to the business procurement teams:
- coordination and management of outsourcing, including sharing, awareness and communication via an Outsourcing Steering Group
- design, maintenance and dissemination of tools and processes to incorporate best practices from within and outside AstraZeneca
- development of preferred supplier listings for OSPs
- engagement and provision of direct support in more complex BPO deals with the greatest focus on processes of service provider selection, due diligence, contract negotiation and process transfer covering support for AstraZeneca-wide governance meetings with critical OSPs where the contracts are across multiple SET areas and are of significant value.
The direction and objectives of the centre of excellence (CoE) are discussed and agreed with the Outsourcing Steering Group. Current work is aimed at any outsourcing activity of significant value, with emphasis on OSPs that have multiple deals with AstraZeneca and/or deals that cross more than one business area.
The Steering Group has also mandated that a key number of outsourcing risk areas must be assessed by every outsourcing project at key gateway review points. In support of this, the CoE has developed a sourcing and supplier management framework that incorporates outsourcing best practice and learning gathered through internal and external engagement with practioners of outsourcing.
As a result of the CoE, AstraZeneca is now conducting its outsourcing activities in a more consistent way, which is driving greater value and reduced risk.