Strategic CIO // Executive Insights & Innovation
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9/14/2007
12:50 PM
Bob Evans
Bob Evans
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Walgreens Ex-CEO: Most Future Changes "Will Be Driven By Technology"

Recently retired CEO David Bernauer -- who spent four years as CIO -- supplies a great answer to his own question: "Why is it so important to understand that technology will drive the biggest changes in our profession?"

Recently retired CEO David Bernauer -- who spent four years as CIO -- supplies a great answer to his own question: "Why is it so important to understand that technology will drive the biggest changes in our profession?"Bernauer, who led Walgreens to spectacular and profitable growth atop the pharmacy business, last month gave a presentation at a retailers' conference at which he asked that question and then began his answer this way: "Because if systems are implemented without careful, thoughtful planning that includes the adoption of standards allowing interoperability, then nothing close to the potential benefit will be attained."

And while Bernauer's comments are aimed at the health-care industry, they apply to all businesses looking to use IT to increase revenue, profits, and customer loyalty.

Let's repeat the money line from that quote: "...then nothing close to the potential benefit will be attained." That is a standard CIOs and other business-technology leaders should demand of every project, every process, every expenditure, every objective, and every employee: By doing this, are we achieving every potential benefit? And if not, is it really worth doing?

The primary business value IT can drive in the retail side (pharmacies) of the health-care industry is liberating pharmacists from mundane busywork so they can devote more time and attention to patient care, and less to paperwork, Bernauer said in his presentation: "This month over 3 million E-scripts [electronically filed prescriptions] will be sent. That's only about 2% of all new scripts, but more than double what it was last year, and E-scripts are on the verge of an explosion. I will be surprised if that number is not 30 million just two years from now!"

In addition, he said, E-scripts are having a direct impact on revenue growth, noting that doctors who switched from paper to electronic prescriptions eventually filed 11% more new prescriptions than they filed using paper.

Question: Where in your business could a similar transformation drive revenue growth?

But here's what Bernauer called the "greatest opportunity of all:" "Once our pharmacists have access to relevant patient medical information, the stage will be set for them to greatly improve the appropriate use of medicines," which goes to the ultimate core of the pharmacists' value: increasing the quality of patient care. Consider this, he said: A study shows that 50% to 90% of patients don't take their medications according to instructions, which has led to 125,000 deaths annually and a financial cost of $100 billion each year.

Question: In your business, where are there similar inefficiencies with massive and preventable financial waste?

So score one more for the strategic business value of IT: "Both E-scripts and RFID will save our pharmacists hours that can be reinvested in medication management." And that transformation of business processes to allow more focus on core responsibilities is delivering the ultimate values: saving lives, improving health care, and simultaneously cutting financial waste.

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