Retail and wholesale pharmacy Walgreens Boots Alliance Inc. entered into a contract with Indian IT major Tata Consultancy Services or TCS. The ten-year contract, valued at over $1 .5 billion, aims to create a new IT operating model for Walgreens Boots Alliance or WBA, as part of its ongoing efforts to cut costs.
Under the deal, TCS would enhance WBA's global IT function by launching a new operating model for IT Run and Operational services, blending artificial intelligence, machine learning and advanced software engineering.
As part of the strategic partnership expansion, WBA's IT team will focus on strategic technology projects to develop new digital products and services on its business platforms. Following a period of transition, TCS will provide Run and Operational managed services. These include application maintenance and support, infrastructure and security operations.
WBA, which has more than 18,750 stores in over 25 countries, had announced a Transformational Cost Management Program in December 2018, aiming to deliver annual cost savings of over $1.5 billion by fiscal 2022. The latest deal aims to give a fillip to the program.
The multifaceted plan includes divisional optimization initiatives, global smart spending, and the transformation of the company's IT capabilities.
Under its ongoing cost saving efforts, WBA last year announced its plans to close about 200 locations each in the U.S. and the United Kingdom.
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