Doing More With Less NonTraditional Approach To IT

Doing More With Less Non-Traditional Approach To IT Dr Alan Lloyd Chief Systems Officer Sonic Healthcare Group

The Sonic Group • • Pathology & Radiology Service Provider 15 Yrs in business & ASX listing A$1 bn Revenue 37% growth in revenue 20% growth in earnings 10, 000 employees Operational in : • Australia • New Zealand • United Kingdom • Hong Kong

Sonic Healthcare Pathology Laboratories TDL UK 40, 000 PATIENTS / DAY

Pathology & Radiology is Big Business • Major Laboratories in: – Sydney (Douglass Hanley Moir) – Brisbane (Sullivan Nicolaides) – Melbourne (Melbourne Pathology) – Auckland (Diagnostic Medlab) • 40, 000 Patient samples a day • Over 100, 000 Tests daily • Aging Population: – Today 6: 1 – By 2031 3: 1

I. T. is Integral to Sonic Operations SONIC I. T. POLICY • OWN AND CONTROL I. T. SYSTEMS § SOFTWARE DEVELOPMENT § INFRASTRUCTURE § SUPPORT § Automation

General Workflow Principles Management Feedbac k Innovation Benchmarking KPI’S INPUT OUTPUT $$ WORK $$

The ‘Challenge’ • Concentrate Resources on the ‘Strategic Initiatives’ • Incorporate ‘Best Practice’ and standardise • Enable continuous improvement • Provide excellent customer service • Reduce the ‘Per Patient’ cost of I. T. IT Spending as Percentage of Revenue Telecommunications 12. 5 Financial Services Health Care 9. 7 3. 7 Manufacturing 3. 3 Utilities 2. 6 Reta 1. 7 il Mining 1. 0 Choose The Right People & The Right Technology

Benchmarking • Compare I. T. Costs • Choose the Best System • Standardise 300% DB 2 CACHE UNIFY 8 LABORATORIES • Why Cache? – High Performance Multidimensional Database – Outperformed Relational Databases • 5 Times Less processing Power • Ten Times Less Storage

Complete Flexibility with One Technology “THICK CLIENT” Development Environment CHUI Native ‘M’ “THIN CLIENT” Web Environment “CSP” OBJECT ARCHITECTURE SQL ODBC Multidimensional Database

SONIC I. T. MANAGEMENT Tightly Coupled To Business Development CEO SITEC CFO COO CSO SITM HR & Marketing

Development Methodology SITEC Projects PMG SITM BDU’s Business Analysts Programmers Analysts RFC

High Level Control – Law of Diminishing Returns GAIN $$ WORK $$

Example of our Rapid Development • 2001 Radiology • The Requirement: – Web based RIS – Competitive price – Competitive functionality – Electronic Transmission of Results • From vision to implementation in less than 12 months • Cache Server Pages (CSP) is the core technology

IT Standardisation 1998 1999 2001 2000 2002 2003 2004 TASMANIA CAPITAL CAP/BARR/ SAT WAGGA BARRATTS COOLUM Y 2 K FIVE YEAR PLAN CLINPATH MELBOURNE SOUTHERN CLINIPATH SNP DHM RIS QXR CASTLEREAGH SKG ILLAWARA HIG

Outcomes • 30% less investment on technology than the industry norm • Very high Operational Responsiveness • Our Technology Platform positions us for growth • Retaining the IP - Development of systems to support the core operations are all in-house • In Australia our IT operation - 53 people supporting a market share of 44%

Doing More With Less • Technology is part of our business culture and the business culture is part of IT • Business Productivity Improvement is founded on our IT Core Competence. • Ownership ensures Retention of IP • Removed the translation of the business requirements into IT through involvement of the BDU’s • High level executive control

PRODUCTIVITY AND DIFFERENTIATION COST ADVANTAGE DIFFERENTIATION ADVANTAGE W I D E N THE M O A T

The Non Traditional Approach to IT “It is our belief that unique Sonic operational models, including workflow, laboratory design and computer software, may be used to the company’s advantage in suitable offshore markets. ” Dr Colin Goldschmidt Managing Director