Pharmaceutical giant, Astra Zeneca reveal how they achieved a 15% cost reduction in HR service delivery by transforming the function via their ‘one-team’ approach.

The challenge
A company-wide drive to focus the business on its core activities of researching, making, developing and selling pharmaceutical products meant that the spotlight fell on HR and other business support functions to see how they could realise value – both in terms of real cost savings and improved customer service.

‘One-team’ approach
Extensive external benchmarking indicated that, in terms of HR delivery, AZ required a major step change to create a more focused, service oriented and consistent HR platform in tune with the needs of an increasingly global organisation. The previous HR model of generalists at each site delivered inconsistent levels of service from one site to another.

A ‘one-team’ approach based around an HR service centre acting as a single point of contact for dealing with HR enquiries and transactional activities was to be the core of the new model, supplemented by teams of HR specialists and strategically based HR business partners. Academee helped ensure that the ‘one-team’ message permeated all learning and communications activities across HR.

A change management approach
Over the course of 2003, work was undertaken on establishing customers’ experiences and requirements, mapping and redesigning around 150 high-level HR processes, setting out detailed operating procedures and standards for each area, undertaking organisational design – including the new job roles and establishing and testing the new service centre technology.

Managing the transformation
Malcolm Hurrell, actively led the transformation programme, together with the UK services leadership team and all key HR managers. Kath Yates was recruited externally to drive the process through. Bringing skills in complex change management, she facilitated a planned and disciplined approach to the transformation. Academee, selected as partner for organisational and capability development were appointed in 2003 and reported to Yates through the capability work stream leader, Steve Munro.

The capability development programme
Academee provided project management support for the entire capability development work stream throughout the transformation. They undertook a capability diagnosis, learning needs analysis to define future HR practices, group and individual needs.

HR launch event
In January 2004, the transformed HR organisation was launched to all staff and business sponsors.

The New Model
There are two main elements to the new HR model: hr.connect and hr.consult:

hr.connect, located in Alderley Edge, the HR service centre deals with all first-level HR queries and transactional and administrative activities.

Employees can contact hr.connect by telephone, e-mail or letter. Over 80% of all queries are resolved by the hr.connect team. Any unresolved issues are passed to a HR specialist.

hr.consult
Specialist services are grouped together under hr.consult, which comprises teams of HR specialists who offer line managers strategic advice, support, product and policy development in the areas of employment, reward, staffing and L&D.

And HR business partners, based in each of the company’s businesses, who work closely with management teams on management and development, people strategies, key business targets and plans, talent management, capability planning and resource forecasting, co-ordination of multiple HR services.

One-team
Since December 2004, most HR staff are based in a single office location in Alderley Edge, Cheshire. This move was fundamental to breaking down barriers between HR staff and has cemented the ‘one-team’ aspiration, helping to make the transformation complete.

The HR departments between the three AZ hubs: the UK, Sweden and USA, are now all working to a similar HR model. This is a significant step for AZ in becoming a true global organisation. The benefit to the HR departments within each hub is that they are able to work together, share best practice and truly answer the needs for staff that operate on a global level.

The benefits

• The project is on track to achieve a 15% cost reduction in service delivery and a fall in the number of HR staff of 15% by 2006. This will recoup the original £5 million investment.




• The business case has been signed off as being on track to achieve targets by the original business sponsors responsible for the programme.




• The use of HR metrics has helped demonstrate to the business the value of what HR does, for example, increased productivity, increased customer satisfaction and reduced costs per employee.




• Currently, over 83% of calls are answered by the HR service centre within ten seconds and 80% of queries are resolved first time (exceeding the original target of 65%).




• Other business support services within AZ are now considering adopting similar models to the HR delivery model.




• The fundamental rationale behind the programme – to create a more efficient and customer oriented delivery of HR services by getting the right customer oriented mindset across HR combined with the specific skills to manage customer interactions both at strategic and transformational levels has become a reality.




• The ‘one-team’ approach has brought together everyone involved in HR delivery and there is a great sense of team working, improved communication, a more consultative approach and a customer-focused culture.




• HR is now in line with organisational strategy and is a value-adding part of the business, contributing to the bottom line.