Three years ago high-street retailer Boots embarked on a major IT transformation programme. Boots says the programme, now almost complete, is critical to improving the efficiency of the business and allowing it to introduce new services for customers.

‘Over the past three years we have touched nearly every bit of IT that we have,’ Rob Fraser, Boots group IT director, told Computing.

‘We have gone on a journey away from the legacy systems that we have been running since the 1970s or 1980s – such as our store tills, the pharmacy system and a couple of systems in the back office that handle management information.’

The IT upgrade is key for Boots to be able to introduce and support new services, such as its Advantage Card loyalty scheme, and new functionality such as sales-based supply chain forecasting.

‘We had good systems but they were running on a legacy Cobol mainframe, and our tills were 17 years old,’ said Fraser.

Boots split responsibility for the project between existing third-party IT services suppliers and its own IT team, a method which Fraser says allowed the retailer to complete work quickly.

‘We decided to do the transformation in three years to really push the business forward,’ he said.

‘Because Boots began using IT in the 1960s, the situation then was that if you needed some IT you pretty much wrote it yourself. So we have a strong IT heritage. It is our strategy now to bring the core IT function in-house and build on it.

‘But the industry has since gone through a shift, where IT has essentially become a commodity, and where you are buying embedded business models, such as SAP’s financials, for example. So why build it yourself?’

Boots outsourced its IT to IBM and Xansa in deals signed in 2002. The agreements were expected to save the company £160m over 10 years as part of a corporate drive to increase efficiency in the business.

The company was already working with IBM, but extended the contract to cover management of its data centre, in-store systems and networks – as well as administering the Advantage Card loyalty card scheme (Computing, 3 October 2002).

The deal with Xansa covered a project to replace Boots’ ageing central legacy systems with new business applications, including the rollout of enterprise resource planning (ERP) software from vendor SAP to serve as the company’s ‘backbone’ operational IT system.

‘We have put new PCs in the back office and have done implementations of four SAP versions at our head office. We created a SAP exploitation team to help the business get to grips with translating our business processes into SAP,’ said Fraser.

‘We have also replaced the store network in the past 12 to 18 months as well as changed the bulk of the call systems for SAP at the centre.’

Fraser says Boots has almost finished introducing innovative store systems to speed up administrative processes or offer customers new services. For example, its touch-screen, electronic point-of-sale system can prompt a cashier to offer relevant additional services to the customer.

‘Now the till walks an operator through selling the right product to the customer,’ said Fraser. ‘With photo-processing, it prompts the operator to offer a photo CD with prints. Since its introduction there has been a 60 per cent increase in uptake of photo CDs.’

The company has introduced radio frequency technology at 125 of its busiest stores, allowing staff to better monitor levels of stock on the shelf and in the stock room. The system links to the tills, and automatically updates stock data and replenishes orders when an item is sold.

A centralised patient medication record (PMR) system rollout is due for completion this month. This will allow customers to choose which store to have their prescription dispensed.

Boots has developed the system with specialist partner Systems Solutions, to ensure it can integrate with the national e-prescriptions project being introduced as part of the government’s £6.2bn NHS IT programme.

‘This gives us the foundation for integrating with the electronic transmission
of the prescriptions project that forms part of the National Programme for IT, to manage repeat prescriptions more easily,’ said Fraser.

He says the implementation of a role-based intranet portal called MyStoreNet is also proving useful. This was designed to streamline the amount of tasks each member of store staff has to carry out each day, as well as manage performance data, email and human resource procedures, such as holiday requests.

‘Our experience from a pilot programme in Newcastle is that it can be used to highlight things you might not know. For example, if stock in your store is running low and the warehouse is also running low, you could perhaps take that product off the shelf and sell something else,’ he said.

Boots: technology at a glance

l Pharmacy Smartscript system to centralise all patient medication records
l New IT and communications network
l Radio-frequency stock management system integrated with sales data in
125 top-performing stores
l Role-based staff portal, MyStorenet rolled out across all stores after 70-store pilot l New desktop PCs and printers at Nottingham-based head office
l Four releases of Boots’ backbone ERP system from SAP
l Chip-and-PIN-enabled till system