Streamlining the Store

With all the new functionality that Walgreens is bringing to its stores – deploying tablet devices that will get pharmacists out from behind the counter, selling fresh food items and providing one-hour buy online/pick up in store capabilities – you might expect that each store’s IT footprint would expand dramatically. But Walgreens’ stores will actually be streamlined retailing machines, using blade servers, virtualization and cloud computing to “lean out” store-level technology wherever possible.

Enhancing functionality while minimizing store technology would be quite a balancing act for a retailer of any size, but the IT executives at Walgreens have to make every store technology decision knowing that it will have implications not in 50 stores, or 500, or 5,000, but in more than 7,800 stores spread throughout all 50 states, the District of Columbia and Puerto Rico.
That’s one big reason the chainwide IT upgrade under way is a multi-year, multi-phase project. Another is Walgreens’ ambitious goals: to become the nation’s neighborhood health and daily living destination, creating an outstanding customer experience that extends beyond the stores to the Web, mobile devices and interactions by phone.

The upgrade’s first deployment wave, encompassing an upgrade of the stores’ basic technology architecture, began in the fall of 2010 following years of planning and preparation.

The second wave will be both internal and customer-facing. Walgreens customers can refill prescriptions over the phone, with their mobile devices, and the retailer recently added a text message refill reminder option. The goal is to create a unified communications ecosystem that allows customers to communicate with Walgreens in the ways that they choose, while still maintaining a consistent experience for everyone.

Coordinating these multiple, overlapping deployment waves for a chain of this size requires “a symphony of teams, orchestrating events that have to occur seamlessly to make this work, all with the intent of upgrading the technology infrastructure while trying as hard as possible not to disrupt store operations,” says Carla Moradi, divisional CIO of the retailer’s Enterprise Shared Services’ IT division.
Moradi is one of the principal “conductors” of this symphony, which involves fundamental changes in how applications are presented and managed at the store level, “making store technologies easier to manage from an object distribution perspective,” she notes.

Building on Business Strategies
The success of Walgreens’ IT strategy is built on two important principles. One is that “any IT strategy is a business strategy first,” says Moradi.

“We’re transforming our traditional drugstore into a retail health care daily living store,” she adds. “That involves expanding across channels and creating an outstanding customer experience. Key to success is aligning with Walgreens’ business strategies to deliver the information technology program.”

That’s not to say that IT doesn’t have an important role in high-level decision-making. “One of the keys to Walgreens’ success is that IT has a seat at the table when we talk about our strategic business initiatives,” says Mark Diatte, solution architect for site architecture. “IT is here to enable the business to achieve their goals, but we also have a point of view, and having a seat at the table gives us that input into what can be the right answer. It’s a collaborative integration: here’s the business problem we’re trying to solve, so how best do we solve that? What makes the most sense from an operational standpoint, so it can be achieved at the store level, but also from an IT standpoint?”

In order to provide that type of reality check, Moradi, her colleagues and team members feel it’s important to spend time in as many Walgreens stores as possible “It’s great to have state-of-the-art technology, but if you don’t think about how best to operationalize it and make it easy to use, and make the customer experience seamless, it will fail,” she notes.

Simplify, Simplify

Moradi and company’s job is to minimize the level of IT differentiation, even though Walgreens has been busy creating different “concept” stores to serve the many different neighborhoods they reside in. One concept is selling fresh food items in areas that have been designated as food “deserts,” part of First Lady Michelle Obama’s Partnership for a Healthier America. Walgreens has committed to opening or converting at least 1,000 food oasis stores within the next five years.

Expanded use of mobile tablet devices will enable store and pharmacy associates to serve as health guides, answering customers’ questions armed with information about the various medications the customer is taking. Tablet use will affect both the pharmacy and retail elements of a Walgreens store: “The associate could walk a customer over to the over-the-counter aisle and say ‘Here’s what may or may not go well with the medications you’re taking,’” says Moradi. “We’re changing things to a consultative experience with all the various resources at the consumer’s disposal.”

Even with this range of store types and services, “We’re putting out the same store footprint in 7,800-plus stores,” says Moradi. “There are enough unique things going on with the unique store formats, historical infrastructure, or just the physical shape of the store that we don’t need a technology customization on top of it. Trying to stay ‘vanilla’ with regard to the base infrastructure technology we deploy is key.”

Because she is responsible for Walgreens’ field services organization, Moradi sees the significant value proposition in reducing cost structures around break/fix operations by standardizing hardware and peripherals. “It means we can maintain it better,” she notes. “Standardization also makes it easier to swap out devices in stores, so that’s been a guiding principle when we put different offerings into any specific store.”

Moradi and her colleagues are constantly balancing such practical/tactical considerations with a more strategic view of the business. “From IT’s perspective, we’re always trying to anticipate new categories, services, and areas to go into. A well-laid infrastructure will help us anticipate some of that growth and also give us the ability to react to the needs of our customers,” she notes.

Seven Steps to Smoother IT Rollouts

The “symphony” of teams that Carla Moradi talks about have been playing the information technology equivalent of Carnegie Hall as they roll out major upgrades to Walgreens’ 7,800-plus stores. In addition to the overall philosophy of “leaning out” the store’s IT architecture and avoiding customization wherever possible, these seven best practices helped minimize operational disruptions and create smoother deployments:

• Use a “measles” approach: Walgreens decided to install its advanced technology in one or two stores in markets across the country, rather than upgrade all its stores in one market one week, another the next, etc. “We wanted to build the capability throughout the country, both from using our field services organization’s knowledge of the technology but also from a sheer staffing perspective,” says Moradi. “It’s easier to do that in a few stores across the country than it is to fly everyone to a new market.”

  • Houston, we don’t have a problem: Walgreens created a NASA-like Rollout Command Center in combination with its equipment and technology partners. “This centralized all the procurement, ordering and logistics, so that we knew where the equipment was and when it would be ‘landing’ in a store – because you don’t want customers tripping over equipment and pallets while they’re shopping,” says Moradi. “The rollouts also required huge amounts of communication, collaboration and compromise with the software application teams so that we would be aware of the criticality of the solutions that they are releasing so that we could create the appropriate server images for them.”
  • Keep business in the loop: Another advantage of the Command Center model was that it kept Walgreens’ business stakeholders “at the table daily in terms of what we’re doing, where we’re going and into what stores,” says Moradi.
  • Help, I need somebody: Time is a precious commodity during a rollout, so Walgreens had to provide the installation teams with specifics about when to call for assistance. “We created a ‘punch list’ that laid out what is done at every step, every moment of the installation. It provided guidance as to when you ‘phone home,’ meaning when do you stop trying to accomplish this on your own and call the field service experts. It’s important to know when to call for help,” she notes.
  • Metrics, metrics and more metrics: “This was really about defining what the best indicators are that allow you to see what’s going well and what’s not, and it requires constant refinement,” says Moradi.
  • Take out the trash: “There’s a lot of post-installation disposal to take care of, including older technology and hardware that you can’t just leave at the curb,” notes Moradi. “We had to determine how to effectively destroy all the data that might be on a device and dispose of it in an environmentally friendly way.”
  • Conduct pre-deployment site surveys: It was important to know “where the wires are” in order to hit a home run by the time the resources came out to do the implementation, Moradi notes. “If the cable is in the wrong place, the register isn’t where you expected it to be, or the workstation is a different configuration – without the site survey, you’re going in blind and hoping. It was an expense up front, but it paid off in spades.”

“We learned a lot about what we had done in these stores over the past 15 years that hadn’t been recorded,” says John Andrews, Walgreens senior director of technology customer services. “We ‘tripped over’ some of these things and had to delay or lengthen our time in the store. It was also important to have the day-to-day discipline to record everything that we’re putting in and taking out with these processes now, in some cases right down to the serial number.”
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