Investment into an ERP system and other modern e-commerce technologies was worth it for the online portal Lékárna.cz. The interim sales grew by 39%, which means that in 2019, its revenue was 690 million Czech crowns. What is behind the success of Lékárna.cz? We asked its founder, PharmDr. Vladimír Finsterle, MBA about the things he found useful in managing his company and about the role of digitization in this process.
Your activities have a relatively wide range – from digital marketing for pharmaceutical companies, through e-learning for doctors, to an online pharmacy. What is the connecting link?
The common denominator for all our activities is health care, innovation and technologies, but most importantly, they are all included in our company’s vision. We offer solutions and tools to all those who care for the health of others, educate themselves or are providing health care services to patients.
What would you say has worked out well in your company’s twenty year history?
The one trait that has proved to be important is perseverance. Do not leave your chosen path, do not give up with the first failure, and continue to put your idea or innovation across. Another important aspect, one which works very well in Lékárna.cz, are the people. People I can trust and who share their ideas and efforts with the company. These are the two pillars which support Lékárna.cz.
How did you come up with the idea that digitizing processes is a “must have”?
Since the beginning, our company has been growing in cycles. After eight or nine years, I reached the conclusion that extensive growth is no longer sustainable if it is intuitive, in your head, or in a spreadsheet, and that we need a system which would support us. Support us in situations, when ideas no longer cut it, and when we need to look into the details and consider different options for further growth based on hard data. It was after a period when I was trying to decide whether to grow the company further or sell it. In order to continue, I needed a strong database.
Lékárna.cz experienced rapid growth last year, even before the pandemic – quicker than the competition. What’s behind the success?
The growth was not accidental. It fulfilled the idea of long-term planning and perseverance. The first step was an investment into an ERP system; we chose ABRA Gen. Then we modernized our warehouse management and all of our logistics, without which e-commerce could not grow in the long term. The third step was the front end and the ergonomics of shopping, the user experience. This is what we focused on for the last six years. Finally, the internal energy of the company was released and focused in the direction of the customer. The customers appreciated this, as is apparent in the numbers.
The information system is the basis of every company. What were your criteria when choosing the system/platform for your business?
I had four criteria. The first was the understanding of the complexity of our business. Online pharmacy is not a simple e-commerce discipline. You need to accommodate the specificities of the pharmacy business, so the ERP had to be customized. The second criterion was scalability. Our company continues to evolve and we need to gradually add to the system. The third criterion, of course, is the price, but this is really only the third most important consideration. And finally, the general approach by the management and the people who defined the product also played an important role. They helped us with the transition from one system to the other.
What would you say should not be underestimated in the decision making process?
The key takeaway from this process was not to underestimate the reality from which you approach the process. You must be critical and earnest about what your internal processes are. You may find out that some of those processes will need to be set up anew in order to work efficiently. That was probably the biggest lesson: to be candid with yourself and to openly communicate with ABRA Software.
Why is ABRA Gen important to you?
When you have ideas and vision on the one hand and the core business on the other, you put a lot of thought into which of the two to prioritize. ABRA Gen gives me the assurance that we are in control of the data from our classical processes, which are already set up and which generate about 80 % of turnover and profit, and that my decisions are based on fact and not on my feelings. Those I can use in innovation and development. Core business must work with evidence-based data. In this, ABRA Gen is irreplaceable, and I cannot imagine running my company without it.
You are innovating the communication in health care – how do you think the Czech health care system is doing when it comes to digitizing? Will we ever completely transition to “e-health care”?
Unfortunately, the process of digitizing health care in the Czech Republic was slowed down by a handful of unsuccessful projects. A good example of a functional system today are the e-prescriptions. And the current situation with the corona virus has sped things up. In our company, we organize webinars back to back, sales through Lékárna.cz grow by 40-50%. I don’t want to claim that all of health care will become completely digital, that wouldn’t even be possible. But there are areas, mainly in the care for the chronically ill, in preventative care, supportive care, and treatment adherence, where digitizing enables the providers to save time, which they can invest into patients who require and need physical contact. Digitization will never replace urgent care.
You began looking into digital processes and technological innovation long before the pandemic started. Do you think it helped you tackle the situation better?
I wish that to be true. However, the main reason was our open communication with our customers. We had problems because the distributors up the supply chain stopped supplying. We were open about the fact that the orders would only be delivered with three to four days’ delays. And our customers appreciated that. We had exact data which we could communicate. By combining a good database with our company culture and our strategy of open customer communication, we got everything under control.
You are a pharmacist by trade. What is the future of Czech pharmacy and health care?
Pharmacy business in the Czech Republic, and not just here, because we are part of the European context, is at a crossroads. In my opinion, pharmacy is in the first line of health care. It is often combined with social contact, but I think its future lies in remote consulting. Consulting and adherence; I see room for growth in preventative screening programs and care for the chronically ill. The dispensing of drugs (boxes) can be easily automated or passed on to someone else. The pharmacist's expertise is not in logistics.
How long have you been cooperating with ABRA Software?
We reached the decision to invest into the warehouses, data processes, ERP and the front end about six or seven years ago. Four years ago, we launched ABRA Gen, which meant the start of the real support for the managing of the company. This tells you that the decision to implement an ERP system is not a matter of two years but at least a decade. If the cooperation continues to work the way it does now, we don’t see a reason to change the system. I am thankful to ABRA Software for this.