Apoteksgruppen

The Swedish pharmacy market has evolved somewhat radically over the last three years. Lindsay James finds out how nationwide pharmacy chain Apoteksgruppen is thriving in this new environment. Sweden was one of the last countries in the world with a state-owned monopoly on the pharmacy industry. That all changed in 2009 when, following the re-regulation of the industry, the government-operated monopoly was broken down and new companies were allowed to enter the market. One of these new companies was Apoteksgruppen. A nationwide pharmacy chain, the company is made up of over 150 franchise pharmacies spanning from Gällivare in the north to Borrby in the south. With an opportunity to change the way pharmacies operate, the team behind Apoteksgruppen has high aspirations. “The re-regulations brought about an opening in the market that we knew we could really succeed in,” explains Ola Ebenhart, CIO of the pharmacy group. “By selling the franchises to local entrepreneurs, we could combine local knowledge, service and customer focus with the large chain advantage of scale and economy: a profitable combination that would bring better experiences to customers and improve the working environment for employees.”

Business case

Succeeding in this vision required a scalable technology infrastructure that could support all 150 stores. “To provide the level of service we wanted, we needed to ensure optimum inventory levels, consistent central and local pricing control, and have an overall view of accounting,” explains Ebenhart. “This meant that we needed an end-to-end solution that could support us both now and in the future.” But this wasn’t the only requirement. The company also needed to support e-prescriptions – a service that has experienced a high success rate in Sweden, with approximately 80 per cent of prescriptions taking this electronic form. “There’s been a real push across Scandinavia to make prescribing happen electronically, helping to reduce dispensing errors and create more accurate clinical records,” says Ebenhart. “To this end, two years ago, there was a central prescriptions repository set up at Apotekens Service, which is a state-owned company.”

Solution

For Apoteksgruppen to connect to and integrate with this nationwide and regulated e-prescriptions hub, it needed an approved technology solution that could support it, while at the same time link into the all-encompassing retail management system that it also required. “This was a big challenge,” says Ebenhart. “Apotekens Service has very complex requirements about the solutions that can support it, and so we needed to find a provider that could deliver on this, while meeting our other objectives. What’s more, we needed solutions that our stores could hit the ground running with – we wanted simple, intuitive solutions.” Apoteksgruppen called in three of the major IT vendors in Sweden to pitch for the project, but there was one company that instantly stood out from the rest. “The Swedish division of global technology provider Logica really impressed us with its offering,” says Ebenhart. “The team demonstrated the PharmaLogica solution, which has been created specifically for the Swedish pharmacy industry, combining the proven capabilities of LS Retail software solution with support for e-prescriptions, all running on Microsoft Dynamics NAV. It was a very exciting proposition.” Logica is a Microsoft Gold Certified Partner, and has also been an LS Retail partner for a number of years. With the PharmaLogica solution it was confident it could meet all of Apoteksgruppen’s requirements, proposing to migrate all 150 stores in little more than a year. “The LS Retail software solution is a popular choice in the industry,” says Stefan Gelotte, solution architect at Logica Sweden. “It made a lot of sense to use it as the foundation for PharmaLogica.”

Indeed, the LS Retail software solution has already experienced a great deal of success in the retail industry. The solution integrates assortment management, price control, campaign management, sales follow-up, logistics customer management and store functionality, among other services. “Microsoft Dynamics ERP together with LS Retail software offers a comprehensive, cost-effective, and standardized solution that fulfils the needs of today’s retail business,” explains Sveinn Aki Ludviksson, sales director at LS Retail. “With it, the retailer can not only enhance the shopping experience, but make life much easier for employees across the whole business, as they can all access the same information.” As well as offering this functionality, PharmaLogica enables everything from handling of medication and electronic prescriptions to campaigns, customer management and store features.

Approved by Apotekens Service in June 2010, there has already been significant uptake of the solution. “Five out of the nine main pharmacy groups across Sweden have already chosen PharmaLogica, and we’ve got plans to take the solution to other countries in the future,” explains Gelotte. The contract between Apoteksgruppen and Logica includes every aspect of the solution’s implementation and operation. “As well as implementing the software, we are also responsible for the rollout and monitoring of all POS equipment and office computers, both at the head office and in the pharmacy stores. We’ll host the central servers too,” explains Stefan Ruderfelt, Logica’s Microsoft Dynamics ERP delivery manager and project manager for the implementation. “In fact, our agreement covers virtually all of the various infrastructure services required to operate a larger nationwide retail chain. It’s a very significant project for us.” “It was important that we had not only an integrated solution, but also a global supplier with the capacity to take full responsibility for the implementation, operation and management of the entire projects,” adds Ebenhart. “We realize we are putting very high demands on both the solution and Logica’s team, but we are confident that the result will be a very cost-effective, turnkey solution with high usability.”

The implementation started in spring last year, with the Microsoft Dynamics ERP financials module being implemented at head office, and a temporary solution installed at the stores. Store templates have since been created and pilot implementations of the PharmaLogica solution are now underway at three Apoteksgruppen franchises, ensuring that any challenges are surmounted before the major rollout. “We’ve run into several teething problems, which we expected because of the changing market conditions,” says Ebenhart. “Logica is working hard to address these challenges, and we expect to have completed the rollout of the solution to the remaining 147 stores by September this year.” Training has already started. “Logica has provided us with web-based training, which all store staff will undergo,” explains Ebenhart. “We will also run classroom-based training for all staff.”

Benefits

Several significant benefits are expected as a result of the implementation. By connecting the POS directly to the back office, Apoteksgruppen will have the ability to manage centralized product lists, prices and promotions, saving time and ensuring consistency across all retail stores. “Since the system is centralized, all transactions will be registered immediately, reducing the accounting department’s workload in reconciling central and retail stores’ financial data,” says Ludviksson. “Up-to-date stock information will be available at the touch of a button, enabling efficient forecasting and purchasing based on full historical analysis of sales by style and model.” In addition to the built-in reporting and analysis tools, the LS Retail software solution will also integrate into Apoteksgruppen’s evolving Microsoft business intelligence (BI) technology stack, which includes Microsoft Office, Excel, Analysis Services, Reporting Services and SQL Server 2008. The company also uses SharePoint Server for internal web publishing. “The combination of solutions will make it possible for us to get more out of our data,” explains Ebenhart. “We will be able to take any data asset, transform it into actionable information, and deliver it in Microsoft standard tools like Office and Outlook. That will allow us to be more competitive in the market and ultimately become more profitable.” Ebenhart says the scalability of the solution will also be a significant advantage. “As time goes on and we look to opening new franchises, the process of getting them up and running will be really straightforward,” he says. “We definitely see this solution supporting us for many years to come.”

The flexibility of the solution will also enable better customer service, not least by ensuring that shelves are full. “The inventory planning and management features will help Apoteksgruppen to deliver customer service excellence without committing valuable cash space and logistics resources to unnecessarily high stock levels,” explains Ludviksson. “Furthermore, the pharmacy chain will be able to use loyalty tools to keep customers coming back.” The introduction of the e-prescriptions service will further cement the customer relationship, while ensuring safety and quality, and also helping to develop efficiency and cost effectiveness. “The e-prescriptions service is integral to our future success,” says Ebenhart. “We hope to build on this by creating an online portal where customers can check the status of prescriptions, view their prescription history and find useful advice and support.” Looking ahead, Ebenhart is positive that Logica will play a vital role in his company’s growth. “We strive to be a state-of-the-art business, supported by state-of-the-art solutions. With that in mind, we expect our relationship with Logica to continue for a long time, working together to achieve success.”