Walgreens Relies on Tech and Has To Build Up Its IT Department To Meet Its Goals

Walgreens Boots Alliance, the global innovator in retail pharmacy, has big ambitions to use technology to boost sales, scale its healthcare division, and remodel its retail stores to logistic hubs. However, in order to reach these goals, it will need to build up its IT department, which is in a strained position currently, according to The Wall Street Journal.

In just over one year, Walgreens has made its way through to its third chief information officer, which is a high turnover for a retail pharmaceutical chain that’s looking to use technology to reach its goals.

According to The Wall Street Journal, the staff turnover filters through to its IT department too, which includes contractor layoffs, disturbance in workflow, and low employee morale. Key managers have also stepped down this year. This turbulence has brought about big challenges to the IT department, which is crucial to the company’s strategy and future goals, according to interviews with existing and former staff.

Current CIO Neal Sample’s predecessor, Hsiao Wang, who joined the company in September 2022, said his vision was to boost the IT group’s ability to develop software. During his time at Walgreens, he was able to set up a new AI lab and build out the team’s engineering efforts. However, these steps have shaken up some of the processes and relationships within the department that have been in place for a long time.

Former employees commented saying they were frustrated because their teams needed other types of roles besides engineers. “It was definitely a very, very hard, challenging time to be in,” said Ekta Anand, a former senior product manager who left at the end of July, in regards to Wang’s time at Walgreens. 

If it was not already looking like a strained picture, the department could also be impacted by the company’s plans to reduce costs by $1 billion and reduce capital spending by $600 million, as announced in October. This announcement came two weeks prior to Chief Executive Tim Wentworth taking over. However, Walgreens has chosen not to comment on this.

Ginger Graham, who served as interim CEO in August, said the company will need new technology — including AI — to achieve a turnaround. She explained that Walgreens has introduced a new pharmacy inventory system across its entire chain that already is simplifying workflows.

Graham carries on with Walgreens as the lead independent director on the board. Speaking about the company’s plans, she said, “We’re driving supply-chain efficiencies, including using artificial intelligence to more accurately forecast demand.” She also noted that Walgreens is also striving to control inventory, improve customer support, reduce workload, and cut all unnecessary projects.

The company requires a solid technology team to execute its plans to pivot further into healthcare, streamline its supply chain, face the ongoing pharmacist shortage head-on, and improve working conditions that have resulted in employees walking out.

Mohanbir Sawhney, associate dean of digital innovation and professor of marketing at Northwestern University’s Kellogg School of Management, commented that the chain is also dealing with long-standing systems and technical debt (which refers to the future costs of quick-fix solutions), problems that have been made more complicated by Walgreens’ acquisitions in the past few years.

Sample, the new CIO who took over at the start of November, brings with him two decades of leadership experience. Most recently, he worked as CIO of insurer Northwestern Mutual. He has also served in a number of other high-level roles.

.