Photo of Patricia Greenfield, Andrew Marshall and Ian Brimicombe from AstraZeneca and Nick Blake, J.P. Morgan.

During the acquisition and subsequent integration of MedImmune in 2007, it became clear that AstraZeneca’s treasury infrastructure and processes were less than efficient. Meanwhile, as the company evolved, AstraZeneca’s existing treasury management system (TMS) was no longer able to keep up with its growing needs. Consequently, AstraZeneca realised that investment in systems was going to be essential, not just for the treasury’s needs today, but for at least ten years into the future.

“With only 11 people working in the global treasury, we were looking to increase headcount. But we also hoped that by eliminating inefficient manual processes, the efficiency of the team could be improved to the extent that staff could undertake more strategic tasks, take responsibility for specific areas and benefit from a more defined career path than in the past,” explains Patricia Greenfield, Treasury Director at AstraZeneca.

But dealing with the shortcomings of existing processes can often delay the introduction of new ones. In order to overcome this, three contractors were brought onto the AstraZeneca treasury team to support the manual day-to-day processes while the transformation took place. Moving systems to the new was also a challenge from a people management perspective, says Greenfield. “Over time, people become comfortable with familiar workarounds and manual processes, despite the inefficiencies.” Nevertheless, the solution was successfully implemented. It saw AstraZeneca’s back office treasury functions outsourced to J.P. Morgan Back Office Services and the day-to-day management of all critical technical interfaces outsourced to Bank of America Merrill Lynch Managed Services.

Elsewhere the new TMS provided critical areas of functionality that had previously been absent or weak, such as risk management, liquidity and cash flow forecasting. In addition, a complete review of the company’s banking partners was undertaken with the goal of optimising liquidity management by introducing zero balancing cash concentration.

Finally, the existing obsolete netting centre was replaced with a new multilateral netting centre. Says Greenfield: “As well as performing ‘straightforward’ netting, the new system acts as a platform for inter-company financing and credit processes (whereby the treasury provides subsidiaries with invoice settlement credit terms) for in excess of 90 operating entities.”

To ensure that the company not only builds on its achievements to date, but continues to operate at the cutting edge of innovation and best practice, AstraZeneca also took the unusual step of retaining the services of a specialist, external consultancy (SLG Consultants) to provide ongoing support and guidance.

Culminating in February 2012, the transformation project resulted in benefits such as reducing the length of the month-end reporting process by 25%. When added to other significant efficiency improvements this equates to time savings in excess of 300 days a year. As a result of the transformation project, exceptions have also been virtually eliminated. Additionally, intraday balances are now available in real-time. These are automatically generated using SWIFT MT942 messages, enabling treasury staff access to up-tothe- minute cash positions for all global bank accounts. “AstraZeneca’s treasury acts as an in-house bank for the group. Following the transformation project, front office workers are now able to access accurate positions when they start work at 9am. Before the project, this could not be achieved before midday,” adds Greenfield.

The next phase of the project – to support the company’s liquidity management and FX activities in Latin America more effectively – is currently underway.