SAN FRANCISCO: Walgreens has shed light on its IT strategy, outlining how advances in analytics and supply chain technology are allowing the pharmacy giant to venture into new territory around healthcare in the cloud and the UK market.
Walgreens has two distinct areas of the business, which both have different demands and are undergoing transformations, according to the firm’s chief information officer, Tim Theriault (pictured below).
"In retail, we have new formats and merchandise and a new customer experience. We have rolled out a loyalty programme and that’s given us data with new insights about our customers," Theriault told delegates at the Oracle OpenWorld show in San Francisco.
"We can use that to work with our suppliers and our vendors. We can also use it to make sure that we have an understanding of what the local stores should have, local demands like lobsters in Boston and of course we have got to have pictures of Elvis in Las Vegas.
"And then finally we’re moving to a personal relationship with our customers, which in retail has never been seen before. So we can take all the social mobile analytics, and through the mobile app engage our customers in ways we’ve never been able to before."
On the healthcare side, Walgreens is looking at ways to perform lab tests in a retail setting, and offer convenience to customers. Theriault noted that 65 percent of Americans live within three miles of a Walgreens – and the firm wants a way to reach those who live further afield.
"We've rolled out Walgreen’s health cloud, which is basically an application to allow our people to perform clinical services in the stores and also in the home. With that information, we can share it with doctors and hospitals. We’re really at the early stage of this," he said.
And a new element has recently been added to the IT transformation, which puts further pressure on Theriault and his team: the recent decision to fully acquire Alliance Boots, an organisation that includes British high street chemist Boots. Walgreens now has to deal with 370 distribution centres servicing 180,000 pharmacies across 20 countries.
The firm's supply chain is split into two parts, "one for the front of the store for retail, and one around drugs and medicine, which is really complex and critically important", the CIO explained.
"We have to make sure that when we’re doing promotions to people at the front of the store, the stuff is actually in stock when the customers show up for it, so we're investing heavily in all of our core systems. Some of our systems are older and we have to get them replaced and we need to do it quick and cheaper and better than we’ve been able to do it before."
Cost and security are underlying elements of this transformation. Theriault noted that while the thirst for innovation at Walgreens is up, budgets are down. "We need to do more with less. But today's technology allows you to make it a better value proposition for our customer," he added.
"And security is fundamentally important. There's nothing more important than protecting our patients and our customers. So while we retool our systems, we have to be mindful of the basics, our systems have to run and be reliable."
Theriault also offered useful advice for other technology vendors going through mergers, calling on serial acquirer Oracle to fully integrate purchased products.
"Oracle has great capabilities assembled through organic and also through acquisition," he said.
"I think the ability to bring that together and integrate it in a seamless fashion for us really makes our job easier and better. We don't want to be in the business of connecting things, and the more we can go to the cloud and take advantage of things that are tightly integrated, a solutions approach for us would be absolutely terrific. And at lower cost of course."
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