Walgreens Boots Alliance delivers superior customer service with SAP solutions on Azure

Walgreens Boots Alliance (WBA) is on a mission to help people around the world lead healthier and happier lives by being their first choice for pharmacy, healthcare, and beauty needs. WBA is a Fortune 20 company and has its main presence as Walgreens in the United States and Boots in the United Kingdom, plus stores and partnerships in South America, Central America, Asia, and the Middle East. In the United States, nearly 80 percent of the population lives within 5 miles of a Walgreens or other WBA-owned drugstore. WBA also has a drug distribution arm that delivers medicines, healthcare products, and related services to more than 115,000 pharmacies, doctors, health centers, and hospitals every year.

Keeping all of this business flowing smoothly requires a reliable, powerful, and highly available IT infrastructure and suite of business applications. WBA relies on SAP applications to run key business processes, including finance, retail supply chain, and inventory management. “SAP is the backbone for our retail operations,” says Erwin van Vroenhoven, Vice President OneIT WBA Retail Programs at Walgreens Boots Alliance. “Everything from financial data to promotions and pricing runs on SAP—it’s how we manage product distribution and make sure our customers find what they need when they walk into our stores.”

WBA is currently undertaking a large-scale corporate digital transformation that includes moving as much of its on-premises IT resources as possible to the cloud, including its massive SAP landscape—one of the largest in all of retail. In January 2019, WBA chose Microsoft as its strategic cloud provider, making Microsoft Azure its cloud platform of choice. “Moving to Azure gives us the scalability we need because we were hitting capacity issues with our on-premises infrastructure,” says Dan Regalado, Vice President of Global Technology Transformation and Strategic Partnerships at Walgreens Boots Alliance. “We also get the excellent SAP support that comes from the strong relationship between SAP, Microsoft, and our implementation partners, Accenture and TCS.”

Planning and implementing a successful migration

WBA assembled an implementation team with representatives from all its partners. The team spent several months planning the SAP migration, which was the largest implementation of SAP S/4HANA on Azure at the time, involving 750 virtual machines (VMs) and SAP HANA on Azure Large Instances, 15 SAP modules, and 12 environments running on both SUSE Linux Enterprise Server and Red Hat Enterprise Linux. Given the scale and complexity of the migration, it was a rapid timetable. To make things even more complicated, the team had a tiny window in January 2020 in which to make the final cutover—just 20 hours—because of the business-critical nature of SAP. Fortunately, all the planning and preparation that the implementation team did ahead of time paid off in a smooth transition.

“We shut the system down for the SAP migration on a Saturday night and then opened it up for business on Sunday morning,” says Regalado. “We were very happy with the outcome, considering that we had to move almost 100 terabytes of data from our on-premises datacenter to Azure.”

With its on-premises system, WBA was constantly running up against hardware limitations in terms of memory and CPU power, and the company had to keep adding or upgrading hardware to meet increasing resource demands. After the initial migration to Azure, WBA had plenty of capacity to spare, and the company has started decommissioning on-premises machines.

“Our initial resource utilization in Azure was minimal compared to the potential of the cloud, leaving us lots of room to continue growing and expanding our rollout to stores,” says Regalado. “We’re also eliminating the need for significant capital investment to buy more on-premises servers. Now we just pay for what we’re using in the cloud, and we’re working on optimizing that spend.”

By getting out of the business of managing datacenters, WBA can spend less time worrying about managing IT resources and more time focusing on what it’s really good at—delivering great healthcare and retail experiences to its customers. Azure also gives WBA an opportunity to better utilize the capabilities of its SAP implementation. “One of the key reasons for moving to Azure was so that we could take advantage of the scalability that SAP HANA is capable of,” explains Regalado. “Instead of using extremely big SAP HANA Large Instances, we can start using smaller VMs and then scale out. That’s a big advantage of Azure.”

For a more detailed look WBA’s SAP migration, read this technical case study.

Rolling out the new system and improving customer service

With its initial migration of core SAP resources complete, WBA is taking a phased approach to rolling out the cloud-based system to its thousands of stores, bringing from 600 to 800 stores online per month. The migration to Azure has had an immediate effect on operations in stores where the new system is deployed. Employees have reported that the system is more responsive, which helps them work more efficiently and provide a better in-store experience for customers. For example, employees are better able to track and manage inventory, meaning that customers are more likely to find the products they’re looking for.

“There’s nothing more frustrating for a customer than walking into a store and seeing an empty space on a shelf,” says Regalado. “We need the efficiency of SAP running on Azure to effectively manage inventory through our end-to-end supply chain, from vendors to distribution centers to stores and then into the hands of our customers.”

Adds Francesco Tinto, Chief Information Officer at Walgreens Boots Alliance, “Running SAP on Azure is unlocking the possibility of real-time visibility into store inventory. That is an incredible capability that is essential to our goal of becoming truly omnichannel and offering the best experience to our customers, whether they are shopping in store, on a mobile device, or through the web.”

WBA is always looking for new ways to improve customer experiences. Having SAP and other applications all in Azure provides the foundation for developing a comprehensive data and analytics platform that will generate meaningful new insights. “We want to be a better partner for our customers and offer them more individualized services,” says Regalado. “By combining the data in SAP with all of our other data in Azure, we’re breaking down historical data silos and creating new opportunities to understand the needs of our stores and our customers.”

Adds Roxanne Flanagan, Vice President of Retail and Finance Transformation at Walgreens Boots Alliance, “Our customers are looking to us for increased personalization and more digital capabilities. Unifying our data in Azure gives us a single source of truth that facilitates things like more personalized offers and real-time visibility into store inventory through channels like mobile apps. We want to be leading our customers on their digital journeys and not trailing behind them.”

Reflecting on success and looking toward the future

WBA believes that its team approach was a key factor in the success of its SAP migration. “We took advantage of the strengths that Microsoft, Accenture, and TCS each brought to the table, and we acted like one big team,” says Regalado. “There were times during the migration when I couldn’t even tell who was from which company because we were all so well integrated. That sense of teamwork, combined with meticulous planning, resulted in a smooth migration without significant business interruption.”

Ultimately, everything that WBA does with technology comes back to one main goal: better serving its customers. And the company believes that its migration to Azure will help it continue its history of excellent customer service. “Running SAP solutions on Azure gives us the agility and flexibility we need to disrupt our industry in a way that improves our customers’ access to the products and services they need,” says Regalado. “With Microsoft technologies like AI and machine learning, we can develop new customer offerings quickly and respond in real time to changes in the marketplace and the world.”

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