CVS CIO: Building A New Business Model

Just over two years ago, two industry leaders, CVS and Caremark, merged to create a unique business in health care.

As innovators breaking new ground and defining a new business model, we recognize that this is one of the most dynamic periods ever for our company. The need for agility is at its highest.

See Also: The CIO Strategy for 2010

While every CIO needs to understand and embrace his or her company’s strategy, in a situation like this, IT must be part of the strategy discussion right up front.

The vision behind the merger was to bring together all the different touch-points in pharmacy care–drug stores, retail clinics providing treatment for everyday illnesses, mail-order pharmacy; customer care call centers and even specialty pharmacy–to create one unified experience for the patient, providing the most cost-effective pharmacy solution for the client or payer.

As a result, we need to be able to help patients coming into a CVS retail pharmacy understand the importance of staying on their drug therapy and what their alternatives are to reduce costs.

To do this, our pharmacists need to have at their fingertips, in addition to clinical expertise, an understanding of the individual’s health care drug benefit. Being able to address patients’ and clients’ needs through our ability to provide face-to-face care is unique to the CVS Caremark business model.

To help make this vision work, our IT organization was presented with the challenge to ensure that we could appropriately support this approach with reliable, scalable technology. This means that we still need to do everything that a good IT department does–doing things faster, better and for less money year over year–but we also need to continually invest in new capabilities to keep CVS Caremark’s competitive advantage. We need to invest to improve performance in individual operations, but more and more we also have to look across those different operations to achieve an enterprisewide view.

To encourage innovation, we use leading-edge technologies in a way that may not have been immediately apparent to our individual businesses. To support one comprehensive view of the patient, a company of our scale needs to use the most powerful data warehousing technologies available.

To understand what the best opportunities are for the individual–whether that means dialing into a call center or walking into a pharmacy or retail clinic–we need to have sophisticated expert-system capabilities to be able to determine which of many opportunities is right for that individual and his or her employer. And we need leading-edge workflow technologies to support an increasingly dynamic business.

We need to do all that’s expected of us, plus innovate; it’s no longer either innovate or be cost-effective–it’s both.

There’s never been a deeper need for our IT team to understand how the business actually works–not just understanding the strategies, but also having a good degree of operational depth. In this job, I’ve spent a higher percentage of my time with business leaders and business groups than I ever had before. To be free to do this, my management team has to be top-notch.

In my team, I have people who are capable of taking the initiative and who, themselves, have an extremely high degree of business acumen and an understanding of the company’s vision and strategies. We certainly have top-flight technologists, but I can say that my management team at CVS Caremark–more than any other I’ve worked with in the past–has a deeper understanding of how our business works.

One thing is very important for any organization moving into a new business model to understand: IT doesn’t do anything magical, it merely enables the business to do things it already does–or could do–faster, better and cheaper.

As IT executives and professionals, we need to have an understanding of what faster, better and cheaper really means; what business metrics we’re trying to change; and that everything we’re doing is inexorably tied to these business objectives.

If we do that, we will never want for resources or support.

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