Case study: US pharmacy firm Medco deploys enterprise app store

Healthcare firm Medco, which provides pharmacy benefits for 65 million Americans, has introduced the concept of an iPhone-like AppStore for its application development.

Healthcare firm Medco, which provides pharmacy benefits for 65 million Americans, has introduced the concept of an iPhone-like AppStore for its application development.

As Medco's business has grown, its IT has become increasingly complex, with multiple lines of business, each with their particular business needs. But each line of business operated similar systems and acquired businesses came with their own operations centres, IT services and infrastructure.

The company recognised it needed to move from a system point of view (ie vertically integrated IT built for a business line) to a process point of view, where processes could be shared across business lines. "As we have grown, IT became more complex. We needed to integrate the portfolio," says Michel Dufresne, vice-president of business process transformation at Medco.

Medco wanted to share code. Analysts recognise smartphones offer a radical approach to software development, which breaks free of traditional enterprise architectures.

"The smartphone is a metaphor for an agile enterprise," says Dufresne. "The key success factor of phones lies in their the ability to customise, user downloadable and configurable applications." These attributes make the smartphone act like a standard platform. "All phones adhere to the same user experience and look and feel, making the phone easy to use and easy to configure."

Dufresne points out the attraction of the smartphone metaphor is that applications are small, meaning they have a small and defined perimeter of functionality, and conform to the same user experience and follow well defined standards. He says: "The smartphone is unique, but still consistent."

Medco's apps adhere to a common standard architecture, which provide a platform for building unique business applications. The Medco 2.0 architecture defines standards for application framework, a service oriented architecture, a data fabric, and data management. "The service oriented architecture is our access to the data. On top of this we have developed a process-centric application model that uses apps from our app store."

The architecture wraps core mainframe services, master data management and data warehouse services around a SOA, which provides data and core services for business units. Dufresne says: "The SOA is our access to the data. On top of this we have process centric applications that uses apps from the app store."

IT staff are organised into centres of excellence across business units, covering the operation centres for clinical, advocacy, order processing and shared services. Medco has also shifted to a Scrum-based development methodology and agile-based capital planning process.

Separately, another group of IT staff are assigned to each business unit, forming business innovation and agility centres (Biac). Dufresne says, "The role of the Biac is to customise re-usable components, requirements and implementations across lines of business." For instance, Patients 360 is a strategy to bring together all patient data across lines of business.

The Pegasystems business process management (BPM) toolset is used to enable business users to work with the enterprise architecture defined in Medco 2.0, to link together business processes and create metrics and goals.

Dufresne says Medco is benefiting from the code re-use the architecture has enabled. "We have run the architecture since 2009. We have seen a lot of re-use. Our aim is to have 80% re-use in apps."

According to Russell Keziere Role of Pegasystems, most enterprise architectures lack flexibility. Business people do not buy into the technology roadmap, he says. While the concept of a single global instance of SAP makes sense for international businesses in terms of driving standardised business processes, Keziere says the approach breaks down in practice as countries lack flexibility, when the standard processes are inadequate.

The Pegasystems approach allows business people to capture their requirements and set metrics. The toolset generates code. Pegasystems aims to offer businesses an alternative approach to SAP and Oracle for enterprise applications. Rather than waiting for a new version of the ERP system, Keziere says Pegasystems allows business users to create applications themselves. "Users can't hide behind the fact that IT didn't deliver - an executive draws, squares and writes goals and it is all captured in the system."

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