AstraZeneca\nWhen Dave Smoley joined AstraZeneca as CIO in 2013, he found \u2013 as so many CIOs do when they walk in the door \u2013 that IT cost too much and delivered too little. So he developed a mantra: We want to be twice as good for half the cost.\nBut transforming an IT organization of more than 2100 people serving a pharmaceutical company of more than $26B in revenue takes more than a mantra; it takes a well-thought out, well-executed plan. Smoley chose a five pillar approach, which hinged on a dramatic change to his sourcing model. \u201cWe are repositioning IT as a competitive advantage for AstraZeneca,\u201d says Smoley.\u00a0 \u201cThese five pillars revolve around shifting the work from outside the company to inside the company. We are focused on delivering life changing medicines, but to do this we also need to be in the business of implementing world-class technology. We need to develop that capability in-house.\u201d\nFive Pillars of IT Transformation\n\nFocus on the customer. To Smoley, this first pillar is all about creating a customer service orientation inside IT.\u00a0 \u201cEvery IT employee needs to ask, \u2018Who is my customer? How am I serving them? How well do I understand what they need to do? How am I linking what I do to what they do?\u2019\u201d he says.\n\nToo often, according to Smoley, when large complex organizations rely on third parties, no one person has the broad perspective or clear accountability to make smart decisions on process, service or delivery. \u201cWith all of these third parties running around, people just turn one crank without stopping to think, \u2018what does this activity really do?\u2019\u201d Smoley says. \u201cWe need people to think about how we are helping our customer, not our role in managing one narrow piece of a process.\u201d\nWhen Smoley inherited his IT organization, application development and maintenance all ran through a centralized group. Business analysts and relationship managers were in customer facing teams; they would define requirements and then hand them off to the central group who built and ran the application. \u201cThe business relationship managers didn\u2019t have a clear view of how their own applications were performing,\u201d says Smoley. \u201cWe\u2019ve now moved accountability for application performance into the customer-facing teams. They know which applications to shut down, upgrade, or keep in steady state.\u201d\n\nDeliver operational excellence: \u00a0\u201cWhile we need to be innovative, we must also recognize that we operate IT and that we need a stable and secure global infrastructure,\u201d says Smoley.\u00a0 To this end, AstraZeneca is building out a global footprint of technology talent in Chennai, India and in Silicon Valley, where Smoley\u2019s CTO resides.\n\nAs an early move toward operational excellence, Smoley has brought SAP support in house.\u00a0 \u201cThat was the first piece we brought in,\u201d he says, \u201cand it was a major one.\u00a0 It\u2019s easy to say, \u2018SAP support is complex, so let\u2019s outsource it. But we want to be better at running operations, and we want to reduce our costs, so we are supporting SAP ourselves.\u201d\n\nLead through technology:\u00a0 For years, consultants have been preaching that much of IT is a commodity and belongs in the hands of outsourcers. Rather than run IT ops, the pundits say, CIOs should focus solely on the technology that differentiates their businesses.\u00a0 But what do you do when technology has moved into the forefront of business change?\u00a0 \u201cWe had become somewhat removed from technology leadership through the use of third party consultants and advisory services who would select and run our technology,\u201d says Smoley. \u201cAs a result, we were not as close to the technology as we needed to be.\u00a0 We now recognize that with the potential for technology to transform our business, we have to master the technology ourselves. We are moving from \u2018give us the requirements and we\u2019ll go to the vendors,\u2019 to \u2018let\u2019s think about where this technology is headed and how it impacts our business.\u2019\u201d\nSimplify: \u00a0\u00a0Smoley describes AstraZeneca\u2019s previous IT sourcing arrangement as \u201cA complex ecosystem of multiple third-party suppliers who were involved in everything we did.\u00a0 We had multiple handoffs so you had to get 10 people in a room to make a change.\u201d Having shifted from 70 percent of IT services outsourced to 30 percent, Smoley and his IT team have \u201cminimized the handoffs and simplified our overall processes internal to IT.\u201d\nCollaborate: \u00a0\u201cHow do we collaborate as a large global function? How do we work more effectively between different geographies and business areas? How do we help our scientists collaborate with academics, payers and providers? How we let them share information and do video-conferencing on any device anywhere? How do we build a culture of collaboration?\u201d For Smoley and his team, taking a \u201cmobile first\u201d strategy is one way to answer these critical questions. \u201cWe look at every application we develop and every package we choose from a mobile perspective,\u2019 says Smoley.\u00a0 \u201cCan you use it from the phone? If the answer is yes, then we go back to see what it looks like on a desktop.\u201d\n\nAdvice for CIOs Embarking on a Major IT Transformation\nSmoley offers some advice on embarking on a transformation of this magnitude.\n\nBring it back inside.\u00a0 \u201cWhen you outsource, you are paying a premium to somebody who is not in your company,\u201d says Smoley. \u201cEmployees at AstraZeneca believe with heart and mind and soul that they need to do the best they can for our business.\u201d Smoley acknowledges that there are times when you have to outsource for the occasional ramp-up, but \u201cin general, you will get better alignment, speed and delivery if you keep IT in-house.\u201d\nDo your homework: \u00a0\u00a0Before Smoley changed a word on his outsourcing contracts, he and his team spent a full year inventorying their technology portfolio. \u201cWhen you outsource the majority of your IT services, it\u2019s hard to have a grasp of what you\u2019re really running,\u201d Smoley says. \u201cOur first move was to ask each of our business facing IT leaders, \u2018Do you know what you\u2019re running?\u00a0 If you don\u2019t, take a clip-board and start talking to the people you\u2019re supporting and ask them what\u2019s running on their computer.\u2019\u201d\n\nFor Smoley, \u201cThis is good old fashioned forensics. You have to start with the inventory and ask: How much does it cost? Does it work? \u00a0If we bring this in, can we do it better, faster and cheaper? This inventory work is not sexy; it\u2019s in the trenches. You have to sweat the details.\u201d\n\nAssess your team: An organization that has spent years in an outsourced environment may lack the skills to run everything themselves. \u201cWhere we had skills gaps, we brought in people from other companies and industries who had proven experience in running data centers and applications portfolios,\u201d says Smoley.\nCreate some urgency:\u00a0 Smoley suggests you ready the business for the sourcing model change by creating a sense of urgency.\u00a0 \u201cWhether it\u2019s \u2018We are too expensive or too slow or missing the digital revolution,\u2019 you have to run around screaming hair-on-fire about what needs to change and have a clear articulation of what good looks like.\u00a0 For us, it was that we were spending much more on IT than the industry average and that our performance is below industry standards. \u00a0When we kept saying, \u201cWe need to be twice as good for half the cost,\u201d people listened.\n\n\u00a0\nAbout Dave Smoley\nDave Smoley joined AstraZeneca in April 2013 as Chief Information Officer. Before coming to AstraZeneca, he was Senior Vice President and CIO of Flextronics, a global manufacturing services firm, where he was for more than six years. Prior to that experience, Dave has an extensive IT background that includes divisional CIO roles at Honeywell and General Electric. Dave graduated from Clemson University with a BS in Computer Science and received an MBA from the University of Virginia.\nAbout AstraZeneca\nAstraZeneca is a pure-play global biopharmaceutical company that focuses on the discovery, development and commercialization of prescription medicines. Their primary emphasis is on the treatment of disease in three important areas of healthcare: Cardiovascular and Metabolic disease (CVMD); Oncology; and Respiratory, Inflammation and Autoimmunity (RIA). AstraZeneca operates in more than 100 countries, employs 57,500 people and is headquartered in London, United Kingdom.