In this case study, WGroup collaborated with business and IT stakeholders to build and compare business scenarios to evaluate in-house and third-party Pharmacy applications to support the client’s strategic, operational, and technical objectives, which resulted in estimated savings of $80M over 5 years. WGroup helped the client work through a complex analysis and evaluation process in just a few months. The client’s commercial pharmacy package will return value in a much shorter time than could be achieved by continuing with their internal solution development.

1. Opportunity
This Fortune 50 retailer has a solid
track record of delivering extraordinary
customer experiences that lead to strong
financial performance and create new
opportunities for profitable growth.
The company had reached a critical
juncture with its custom developed
Pharmacy Management System.Their
pilot system, the culmination of four
years of effort for development and
rollout and an expenditure of more
than $160 million, had been deployed
to only about 14% of the retail chain’s
in-store pharmacies.The system’s
features and functionality evolved
considerably during its overlong
development process, yet still lacked
parity with Pharmacy applications
used by leading pharmacy chains.
The company’s Board halted further
development of the in-house solution
pending an objective evaluation of
its capabilities and cost. Should the
company continue investing in its
custom solution, or look at alternatives
in the marketplace? What would be
the cost and timeline to implement
the chosen solution? The Board put
together a combined business and IT
development team and gave them three
months to make these determinations.
Approach
The client’s Technology Services
division asked WGroup to serve as
an experienced, objective third party
to organize and lead the evaluation
process and to serve as an honest broker
to help the company choose their
Pharmacy Systems implementation
path.Time to value was an important
consideration throughout the
engagement, driving an aggressive
schedule of deliverables and concurrent
work among interrelated tasks. Within
two weeks, WGroup prepared a survey
of 25 to 30 vendors that provide
Pharmacy software. At the same time,
WGroup consultants interviewed the
client’s business and IT executives to
understand their economic priorities
and decision criteria. WGroup’s team
narrowed the field to six vendors that
had the wherewithal to support the
client’s large chain of stores. Based
on interviews with stakeholders
and industry experience, WGroup
put together a list of features and
functionality the client required,
created an RFP that spelled out these
requirements in detail, and sent it to
the pre-qualified list of prospective
vendors. In this first pass of the
evaluation process, WGroup helped the
client score the solutions against a list
of 500 requirements that clarified how
each vendor’s package would support
both routine and strategic business
requirements, accelerate deployment,
maintain compliance with complex and
ever-changing pharmacy regulations,
and operate within an enterprise-
wide IT architecture that could be
sustained going forward. Based on
the vendors’ responses to the RFP and
analysis aided by a scorecard created by
WGroup, the evaluation team selected
two vendors to participate in detailed
Drive Your Business
Pharmacy Systems Analysis
WGroup helps Fortune 50 retailer find right prescription
for its Pharmacy Management System
Retail | Systems Analysis
1
WGroup collaborated
with business
and IT stakeholders
to build and compare
business scenarios to
evaluate in-house and
third-party Pharmacy
applications to support
the client’s strategic,
operational, and technical
objectives, which resulted
in estimated savings of
$80M over 5 years.

2. due diligence, the second pass through
the evaluation process. For the client’s
final vendor selection, WGroup tailored
a rigorous decision model in which the
client could vary decision parameters.
If the focus is on cost effectiveness,
which solution prevails? If the priority
is time to value, which solution is
optimal? If technology or features
and functionality are paramount, how
do the packages compare? The model
allowed the evaluation team to run
different scenarios based on scores
attributed to different decision criteria
in order to create a stable selection
point. In each of these scenarios the
client’s internal solution lost to the
vendors’ applications.The evaluation
team now had a clear and compelling
business case to cease development of
their custom-built solution and move
to a third-party Pharmacy application.
Besides developing the design
principles upon which Pharmacy
solutions would be evaluated and a
package selected, WGroup contributed
to the implementation and rollout
phase of the project, devising the
implementation plan and governance
mechanisms. WGroup defined
in detail the steering procedures,
leadership requirements, team
responsibilities, and decision-making
hierarchies to guide the project.
Insights and Advice
Dispensing pharmacies are not the
client’s core business. Focused, candid
conversations with client executives
revealed that in-store pharmacies,
while an important part of the
customer experience, are more of a
customer convenience than a revenue
generator. WGroup consultants
quickly honed in on the fact that
the client wasn’t seeking a Pharmacy
application that could differentiate its
stores in the marketplace. With no
will proceed with thoroughly researched
and well-defined design criteria, the
right governance structure, and a
clear view of the desired end-state.
WGroup’s business case compared
the cost of a vendor-supplied
Pharmacy application to the cost
of completing the client’s custom
application.The cost savings, which
comprise both development and
run-time (support) costs, amount
to $80 million over five years.
The ongoing effort to keep pharmacy
systems current with evolving
regulations can be burdensome
for custom-built systems. With a
vendor package, this cost is spread
over a large customer base.
WGroup also estimates a gross
margin improvement of about
$20 million per year from new
business opportunities supported
by the new Pharmacy solution.
need for differentiating capabilities
and the extensive customization it
entails, the evaluation team developed
corresponding guiding principles
that emphasized patient safety
and regulatory compliance, rapid
deployment, and efficient dispensing
of drugs.The minute level of
customization the client was building
into its custom application was costly,
time-intensive, and added little or no
value to the business.This cost/benefit
analysis helped steer the client toward
a third-party Pharmacy application.
Value Delivered
WGroup helped the client work
through a complex analysis and
evaluation process in just a few months.
The client’s commercial Pharmacy
package will return value in a much
shorter time than could be achieved by
continuing with their internal solution
development. Moreover, the new
Pharmacy package’s implementation
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About WGroup
Founded in 1995, WGroup is a boutique management consulting firm
that provides Strategy, Management and Execution Services to
optimize business performance, minimize cost and create value. Our
consultants have years of experience, both as industry executives and
trusted advisors, to help clients think through complicated and pressing
challenges to drive their business forward.
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