Teaching Note—Pharmacy Service Improvement at CVS (A) and (B) 607-040

Such training is certainly important, but it alone is unlikely to convince all pharmacies and
employees to do away with their wooden boxes and start doing data entry at dropoff. In fact, with
over 4,000 retail locations it is likely that at least a few will try to ignore the new process as much as
possible and continue with the status quo. Even after it is pointed out to them, most students struggle
to come up with effective means to combat this tendency. They suggest store audits, but these are
expensive and time-consuming.

What students typically fail to grasp is the enterprise systems already in use within CVS’s
pharmacies provide timely and highly detailed audits of process execution at every location. All
pharmacy transactions are recorded, and are visible and analyzable at company headquarters. This is
all the information required for comprehensive auditing of compliance with a policy of doing data
entry at dropoff.

Because the distribution of prescription dropoff times at a typical pharmacy is known from
experience, it can be compared with each actual pharmacy’s distribution of data-entry times. If these
two distributions are dissimilar, an auditor can be reasonably confident that data entry is not taking
place at dropoff at that pharmacy (see the figure below). In particular, if a pharmacy’s distribution of
data-entry times looks like the distribution of requested customer pickup times shifted back one
hour, an auditor can be confident that the pharmacy is still using its wooden box and only starting
the fulfillment process one hour before the requested pickup time.

Data-entry transaction timing within a pharmacy that is not doing data entry at
dropoff In this pharmacy, data entry is still done approximately one hour before the desired
pickup time. Since most customers want to pick up their prescriptions at lunch and after work, peak
data-entry times are at 11 a.m. and 4 p.m.

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607-040 Teaching Note—Pharmacy Service Improvement at CVS (A) and (B)

Data-entry transaction timing within a pharmacy that is doing data entry at dropoff
In this pharmacy, data entry is done at the time of prescription dropoff. Data-entry peak times are
before work, at lunch, and after work.

This example illustrates the powerful monitoring capabilities brought by enterprise IT. Because
these systems are used to execute transactions and business processes, and because they capture and
store data in consistent formats, they provide rich repositories of information. This information can
be examined at multiple levels of aggregation, and for many purposes. As the CVS cases show, one
such purpose is monitoring compliance with specified processes.

Standardization
One of the central themes of MIA’s enterprise IT module is that EIT is a powerful tool for ensuring
that business processes are executed as intended by their designers (who are typically generalist
business leaders). The CVS cases show how EIT delivers both ex ante and ex post compliance. Ex ante
compliance stems from the fact that after the PSI team’s new process is put in place, it is simply not
possible to do the DUR before the insurance check. Ex post compliance derives from EIT’s monitoring
capabilities; as discussed in the previous section, auditors can easily determine if a remote pharmacy
is in fact doing data entry at dropoff.

These two types of compliance combine to yield a high level of business process standardization
across CVS’s more than 4,000 pharmacies. Without enterprise IT, it is difficult to envision how such a
high level of standardization could be achieved.

Complements
At first it seems that of the organizational complements of IT, the only one clearly present in this
case is changed workflows. The PSI team changes the sequence and timing of a couple tasks in the
pharmacy fulfillment process, but otherwise makes few alterations to the work of the pharmacies. It
doesn’t seem that pharmacy employees are any more (or less) interdependent in the new process
than in the old. It also seems that their decision rights are also preserved. Pharmacists still clear DUR
exceptions, for example, and the sensitivity of the DUR itself is not altered in the new process.

Given this, it seems strange for the PSI team to anticipate in the (A) case that pharmacists and
other employees will resist their proposed process changes. If very few of the organizational