AstraZeneca is a global pharmaceutical company with over $24 billion in annual revenue. It has over 61,500 employees working across R&D, manufacturing, and collaborations in 17 countries. AstraZeneca's IT department was undergoing a transformation to become more customer-focused, operationally excellent, and a technical leader by 2018. This involved insourcing IT jobs to new technology centers in India, Mexico, China, and Eastern Europe, simplifying applications, using cloud services, and cutting annual IT spending from $1.35 billion to $930 million while improving services. The changes have led to improved user experiences, more mobile and collaborative tools, and helped position AstraZeneca for future technology-enabled business

1. AstraZeneca
The journey to world-class IT
Chris Day 23rd June 2016

2. • $24.7bn Total Revenue; $23.6bn Product Sales; $1.1bn Externalisation Revenue
• 61,500 employees
• $5.6bn invested in R&D with research across 5 countries
• 125 projects in clinical development and 15 NMEs (new molecular entities) in
late-stage development; 18 NME approvals in 2014 and 2015
• More than 850 collaborations and partnerships globally
• Manufacturing in 17 countries
• 4th fastest-growing top 10 multinational pharmaceutical
company in emerging markets in 2015
As at 31 December 20152
AstraZeneca – business overview

3. Medicines that change lives and make a difference
3
Making hearts
healthier
Helping more
people survive
cancer
Helping people
breathe more
easily
How do we do this?
• We work with ‘discovery’ scientists to make
sure the chemistry can be manufactured
• We design the best ways for patients to take
the medicine
• We produce the new medicine
• We make sure clinical trials can be carried out
to the highest standards
• We continually improve formulations and
processes

4. AstraZeneca in the North-West
4
60 years
At the forefront of drug
discovery testing and
production for more than £1,377m 30patent first-approvals for
medicines discovered here
Contributing
of Gross Value Added
to the UK economy
Macclesfield –
AstraZeneca
the largest pharmaceutical
production facility in the UK
Speke –
AstraZeneca
the sole provider for the UK
government’s childhood flu
vaccination programme
Macclesfield –
AstraZeneca
a hub for world-class
medicines development

5. Sites not located in
technology “hot spots”Some innovative programs in
science and informatics
Good business engagement in
pockets
High spend relative
to service levels and external
benchmarks
Not aligned with business; insufficient
cost transparency
Skill gaps: technology, product
management, client engagement
IT was critical to
future business
success…
but far from being a
credible or trusted
partner to the
business
Some real strengths…
… however some significant deficits
Unhappy customers...
too many handoffs, slow, confusing
AstraZeneca IT 2013 – Far from being world class
5

6. Customer
Focus
Operational
Excellence
Technical
Leadership
Simplification Collaboration
A different strategy was required …
6

7. … supported by a challenging stretch target
Spend half as much money to deliver twice as much service by 2018
7

8. Key Actions:
2014
Massive Change
2016
Exceeding
Industry
Benchmarks
• Launch infrastructure
transformation
• Deploy foundational
cloud apps
• Re-org, re-skill
• AZ Chennai established
• Infrastructure
investment impact
becomes visible
• Cloud extensions
• Major investment in
Agile & LEAN
• Insourcing at pace
• Major uplift in service
performance
• Full control of operations
and technology
• Simplified application
estate -> mobile first
• Heavy Investment in new
capabilities – digital and
mobile
Rapid increase in Speed, Visibility and Impact of Improvements
Stabilize, Simplify, Innovate
A three year plan to transform Astra Zeneca IT
2015
Optimizing
8

9. Legacy model failed to perform
well
Heavily outsourced to a large
‘ecosystem’ of external IT
application and infrastructure
third party suppliers
Persistent issues: inflexible,
insufficiently responsive and
expensive
Lack of internal capability – no
ownership for technology
Rationale for in-sourcing
9
In-sourcing improves performance by allowing us to:
 Achieve direct control over our IT operations
 Drive improved knowledge transfer and retention
 Simplify support structures and drive clear execution
accountability
 Achieve greater agility, improving responsiveness to
business
 Significantly reduce cost. We will no longer be funding
duplicate management.
Insource where there is clear economic and strategic value to AZ

10. Global Technology centers expand AZ technical capability
10

11. Insourcing approach
Develop in-house IT capability in strategic locations at an attractive
cost point
11
• Target network of Global Technology Centres (GTCs) at four locations – Chennai (India),
Mexico (Guadalajara), China (Dalian) and Eastern Europe (location TBC)
• Chennai is our primary centre providing global technology services
• 3 Satellite centres in Mexico, China and Eastern Europe providing near-shore and
language capabilities for key markets ~200 – 300 FTE in each centre
• Initial focus on establishing GTC
Chennai centre.
• Site operational in August 2014, 300
FTE by end 2014, 1400 FTE by end
2015 and ~2300 FTE by end 2016
• 70+ key service lines now successfully
transitioned
In-source wide range of IT development
and maintenance activities, where there is
clear economic and strategic value to AZ.
Complement with support of simplified
supplier ecosystem
Rapid Build-up Scope
Strategy

12. 12
1259 1098 1155 1051 1087
450
225 66
19 3
301
1480
2066 2116
2013 2014 2015 2016 2017
Chennai
Contractors
Hubs/Other
1,709 1,624 2,701 3,136 3,206 TOTAL FTEs
$273m $212m $226m $244m $269m TOTAL COST
484 461
326
197
152
142 175
176
153
150
70 65
65
61
47
2013 2014 2015 2016 2017
Hardware/leasing
Software
Services
TOTAL COST $696m $701m $567m $411m $349m
Third party cash spend reducing by $347m... ...with manpower costs remaining flat
36% 31%
40%
55%
64%
2013 2014 2015 2016 2017
Key IT services will be 65% insourced by 2017
IT FTEs by geography3rd party IT cash spend
by category, $m
We have significantly shifted our sourcing mix

13. 2014 2016
Business Effect:
> 50%
20 per week
18 hours
12 months
>8000
75%
limited
Customer Satisfaction
Critical Outages
Critical Incident Response
Project Delivery
End of Life Servers
Critical Backups
Innovation
> 70%
< 10 per week
< 8 hours
9 months
<2000
>95%
increasing
> 80%
< 10 per month
< 3 hours
5 months
minimal
99.9%
pervasive
Stabilize, Simplify, Innovate
Key AZ IT performance metrics
2015
IT Operating Expenditure reduced from $1.35bn (2013) to $930m (2016)
13

14. 14
2014 2014
Get a coffee and chat
while starting up
Slow and difficult to
connect on the road
Old devices, stuck on
old technology
Spotty inconsistent
Wi-Fi
Today
Lift the lid, instant
connect, no password
From anywhere,
from any device
Continual refresh
increasingly mobile
Ubiquitous Wi-Fi
Large, complex
application estate
Clunky, legacy
enterprise solutions
Stuck on old
technology
Today
50% applications
removed. Business
simplification enabler.
Leading edge cloud
solutions deployed.
Mobile first
Rapid agile,
introduction of new
technology
Making AZ a great place to work

15. Improving the user experience in 2016 and beyond
Improving connectivity
Simpler ways of working
•Faster, cost effective IT changes
•Stable, responsive and innovative IT services
•Simpler choices for users
•Harmonising and standardising data
• Smart IT as a global standard
• Full network automation and monitoring
• World class architecture in new sites
• Significant expansion of Video Conferencing
15
Enhancing collaboration
• Save $ and time with virtual meetings
• Continued shift to “mobile first” strategy
• Exploit cloud technologies
• Streamline user workflow and transactions

16. Key lessons learned
• “Culture eats strategy for breakfast”. Fast paced delivery required a culture reboot -> Move
to openness, smart risk taking and an entrepreneurial mind-set.
• Change management is critically important . Significant investment in stakeholder and IT
employee engagement throughout the program. Proved to be a key success factor.
• Plan for success. We under estimated how successful our model would prove. At times in-
sourcing demand far exceeded our ability to deliver.
• Robust governance is key. We invested significant effort in putting in place a robust
governance processes. Even so we had to continually re-evaluate and strengthen these
structures as the program progressed.
16

17. Questions ?
17

18. Backup slides
18

19. Customer
Focus
Operational
Excellence
Technical
Leadership
Simplification Collaboration
1. Improved user
experience & choices
2. IT is getting “out of the
way” of the business
3. Our ability to
introduce new
technologies that
add value and
enable AZ success
1. A stable and secure
the working
environment
2. Insource work for
greater speed and
agility – our own
people own IT
3. Benchmarked as
moving to world class
1. IT delivers cutting
edge technology
2. Partner with technology
leaders
3. Move aggressively to
the cloud (where there
is a business case)
1. A simpler IT
organization
2. Simplified & faster
business & IT
processes
3. Reduced group
operating costs of 26%
by 2016
1. IT provides world
class collaboration
tools
2. Increased speed and
agility in working with
partners (internal &
external)
3. A culture of innovation
and entrepreneurial
behavior enabled by
technology
From these we will demonstrate:
A different strategy was required …
6

20. •Operating model that
strengthens
alignment of IT to the
business
•Balanced near shore
and offshore delivery
with uncompromised
customer focus
•Incubation
centres
enabling
development &
delivery of
leading edge
solutions
• Centres of
excellence to
focus on key
technologies or
architectural
paradigms
•Simplified IT
organization
with clearer
governance and
accountabilities
•Simplified
processes,
consistent and
transparent
approach
•Reduced costs
and overheads
• “One team” across
GTCs and onshore
sites is integral to
AZ promoting and
fostering better
collaboration
• Agile and delivery
focused – utilizing
the best skills
irrespective of the
location
•Consolidated teams
leading to better
quality and efficiency
•Major uplift in service
quality.
•Transitioned services
are exceeding target
delivery levels.
IT Transformation has delivered a wealth of benefits
8

21. 3.2%
5.0%
5.4%
4.6%
4.2%
4.0%
3.5%
0.0%
1.5%
3.0%
4.5%
6.0%
2012 2013 2014 2015 2016 2017
IT Spend % of Revenue (Pharma > $10b) AZIT IT Spend % of Revenue
21
ITSpend%ofRevenue
Revenue* $B 27.5 24.9 24.4 25.0 24.9 25.8
*BP 12 Revenue Projections
High spend relative to external benchmarks