CVS IT Chief on the Remedy for Business-IT Alignment

CVS Caremark has no technology projects, says CIO Stuart McGuigan, just business projects. In this Q&A, he outlines the retail chain's strategy for keeping the IT and business relationship healthy -- and successful.

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Page 2 of 3 What does the IT governance structure look like?

McGuigan: It's actually business governance with IT as a component. It's about recognizing that there's no such thing as technology projects; they are all business projects with technology components.

An example of how that works is a successful project we had, which is called Rx Connect: the rollout of our new retail pharmacy system. You can't imagine a larger or more complex rollout of technology. When looking at the track record, historically, in the industry is that [projects such as these are] disruptive to operations.

We started by taking a different lens with this project, involving CVS on the retail side. First we asked: What are we trying to accomplish? Improved service and improved efficiency; and helping the pharmacists to do the things they want to do. Next we spent more time than we typically spend in developing the "to be" state. Then we designed the system to reflect that state. People will say this a lot, but actually doing this and taking the time to do this separates out the good projects from the great projects. How did it work out?

McGuigan: We've rolled it out in 3,000 stores so far and are rolling out the rest this year. The uptake from the pharmacists has been extraordinary; I've never seen such a rapid return to productivity. The next day people are using [the new system] because it reflects how the pharmacists think about doing their job: It's a unique match of the system and workflow to the way the pharmacist wants to work.

This is the first non-disruptive rollout of a major system that I've seen. It's the result of a tremendous amount of upfront hard work and planning and extraordinary number of metrics used to make sure that if there were an issue, we'd see it quickly and be able to resolve it. And because [the system] is business oriented and reflects the way the pharmacists work, it's naturally easier to add new workflows to it because we're not asking the pharmacists to do something unusual because they're already interacting with the system. So what do you think of the business-IT alignment challenge that we write about so much?

McGuigan: It is one of the things that has always amazed me over the years, in looking at CIO surveys: That IT-business alignment or strategy pops up in [those surveys] as the top one or two issue. Because if you don't know how what you're doing in IT is going to benefit the business, if you can't even verbalize the connection in the investment in IT and a benefit to the business, then why are you doing it at all? But what about for an IT investment that seems very IT specific?

McGuigan: I consider a project that allows us to make better use of our IT assets, to be more efficient, reduce cycle time for deploying capabilities, make better use of capacity—even though it's done entirely within IT—that's a business project. Because our goal is to fundamentally reduce the cost of providing IT services to the business. And "reduce cost" either improves margin or give us a competitive advantage. So when I say it's in "business terms," it could be entirely within IT, but it's very clear what the business objective is behind this work.

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