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$1bn Revenue • 37% growth in revenue • 20% growth in earnings • 10,000 employees • Operational in : • Australia • New Zealand • United Kingdom • Hong Kong

TDL UK

Sonic Healthcare Pathology Laboratories

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 Innovation Benchmarking INPUT Feedback KPI’S 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.

Telecommunications Financial Services Health Care Manufacturing Utilities Retail Mining IT Spending as Percentage of Revenue 3.7

3.3

2.6

1.7

1.0

9.7

12.5

Choose The Right People & The Right Technology

Benchmarking • Compare I.T. Costs • Choose the Best System • Standardise

CACHE 300% DB2 UNIFY

• Why Cache?

– High Performance Multidimensional Database – Outperformed Relational Databases • 5 Times Less processing Power • Ten Times Less Storage

8 LABORATORIES

Complete Flexibility with One Technology

“THICK CLIENT” Development Environment “THIN CLIENT” Web Environment “CSP”

OBJECT ARCHITECTURE CHUI Native ‘M’ SQL ODBC Multidimensional Database

SONIC I.T. MANAGEMENT

SITEC

Tightly Coupled To Business Development

CEO CFO COO CSO SITM HR & Marketing

Projects

Development Methodology

SITEC PMG SITM RFC BDU’s Business Analysts Programmers Analysts

GAIN

High Level Control – Law of Diminishing Returns

$$ WORK $$

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 CAPITAL 2000 2001 SAT BARRATTS Y2K

COOLUM

FIVE YEAR PLAN

MELBOURNE SNP

2002

RIS QXR

2003 TASMANIA 2004 CAP/BARR/ WAGGA CLINPATH SOUTHERN CLINIPATH DHM

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