Walgreens launches new IT model to save costs

Walgreens Boots Alliance is turning to managed services to transform its global IT function.

The drugstore giant is expanding a strategic partnership with IT services/solutions provider Tata Consultancy Services (TCS) to launch a new managed services-based operating model for IT run and operational services. Following a transitional period, TCS will provide managed services including application maintenance and support, infrastructure, and security operations. 

Walgreens is overhauling its global IT operating model as part of a broader cost management program designed to simplify operations and supply chain management. The initiative is expected to save the company $1.8 billion or more annually by 2022. Walgreens recently reported fourth-quarter earnings and revenue below analyst expectations.

TCS’ approach will blend artificial intelligence (AI), machine learning, and advanced software engineering with a goal of enhancing operational resilience and boosting productivity. As a result, Walgreens seeks to enable its global IT team to focus on developing new proprietary, customer-facing digital products and services; as well as drive organizational efficiencies across the company and further reduce its cost base.

"Walgreens is building a scalable, sustainable and globally unified IT operating model that is focused on digital transformation, automation of service delivery and innovation," said Francesco Tinto, senior VP, global CIO, Walgreens Boots Alliance. "The TCS strategic partnership will enhance our ability to rapidly address evolving business needs, support large-scale global technology solutions and promote investment in truly differentiating capabilities through a modernized platform."

"We are delighted to build on our long-standing relationship with Walgreens Boots Alliance and enable its growth and transformation," said Ashish Khurana, head, Retail Industry Solutions, TCS. "We will leverage our contextual knowledge of Walgreen’s business ecosystem to harness the power of digital technologies to streamline and scale-up their IT operations, while helping accelerate transformational initiatives that enhance the customer experience."