Chennai, September 24, 2014 – Biopharmaceuticals giant AstraZeneca will significantly reduce outsourcing of information technology work to vendors and move it back in-house. At present, eight vendors, including Tata Consultancy Services, Infosys, Wipro, HCL Technologies and Cognizant, provide IT work for the London-based $26-billion company.

Today, about 70 per cent of the company’s IT work is outsourced to eight vendors. The target is to reduce this to around 30 per cent in the next two years. About 9,000 employees of various vendors work on AstraZeneca’s projects globally. This will reduce by half or more and, at the same time, AstraZeneca’s IT employee headcount will increase significantly. “Our vendors have been told about this shift,” David Smoley, Chief Information Officer, AstraZeneca, told newspersons.

The company annually spends around $1.3 billion on IT. “To reduce it by half in two to three years is our aspiration and moving IT work back in-house is one of the measures in this,” he said.

AstraZeneca will follow companies like General Motors in this trend. In-sourcing as a practice started two years ago and it is gathering pace. With the adoption of cloud and mobile services, technology is changing so fast that you don’t need a large IT team, Smoley said at the inauguration of the Chennai centre.

The first step in building its own IT team is the setting up of a global technology centre in Chennai. One more centre will come up in Silicon Valley and another in eastern Europe in the next two years, he said.

“We need to have technical leadership and operational excellence. We cannot rely on third party on this. We want to gain control on IT operations by bringing back work in-house,” he said.

“If you are giving work to a third party, they have a profit margin and that is their priority. Our team member is not with them, but their people are with us managing various things. (The end result) is people managing people with a focus on profit that is not AstraZeneca’s,” he said.

The company will start moving work in-house with SAP, integration of middleware, he said.

The company has spent around $10 million on the Chennai centre, which has 75 employees now with plans to increase the number to 300 by the year-end. The centre will deliver a variety of services, including technical and application such as SAP, Oracle and Cloud-based technologies like Salesforce.com and also do software development. Business Line