AstraZeneca brings IT services in-house with new Indian facility

By Dan Stanton contact

- Last updated on GMT

AstraZeneca brings IT services in-house with new Indian facility

Related tags: Globalization, Outsourcing, Astrazeneca

The opening of a global IT centre in India will bring services back in-house, but AstraZeneca says it is not changing its outsourcing strategy for R&D and manufacturing.

AstraZeneca’s Global Technology Centre (GTC) in Chennai, India was inaugurated last week and will provide IT support for the Big Pharma firm’s 51,500 workers globally. For now the site houses 60 employees but this will be extended as part of a strategy that will see AstraZeneca only outsource IT services by exception.

“The opening of AZ Chennai is about re-balancing our operating model by in-sourcing some of the activity that we currently outsource to technology providers,”​ spokesperson Ayesha Bharmal told Outsourcing-Pharma.com, adding it “will help us achieve direct control over our IT operations, drive improved knowledge transfer and retention.”

Furthermore: “It will help improve business performance by giving us greater agility and improving responsiveness to the business at significantly reduced cost.”

The new centre, along with a second in-house site planned for San Francisco in 2015, is a shift in tactics by AstraZeneca which in 2001 signed a $1.7bn (€1.3bn) outsourcing agreement​ with IT services provider IBM covering PC management, network and communications services.

A second seven-year contract with IBM was signed in 2007 worth $1.4bn​, however AstraZeneca pulled out of the deal in 2011 due to cost and service-level issues leading to a legal wrangle in the England and Wales High Court​.

“We had been operating outsourcing under outcome-based criteria for a number of years and felt we had lost sight into how the work was delivered,”​ Sam Covell, Head of IS procurement at AstraZeneca, told ComputerWeekly.com​ in 2013.

This led to the creation of a new outsourcing IT model, and until the opening of the Chennai Centre the firm, Bharmal told us, had “established a broad based vendor eco-system, working with a number of technology providers.”

However, while there is a shift away from third-parties for IT services, “there is no change to our strategy in R&D and manufacturing,” ​she confirmed. In 2010​, the firm announced plans to cut 8,000 jobs by 2014 with more R&D to be outsourced. 

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