All the Change in the World: BCBSNC outsources IT infrastructure and changes everything about how their organization works with IT

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Blue Cross Blue Shield of North Carolina (BCBSNC) needed to reduce costs in IT but at the same time increase responsiveness to the business units of this Health Care services company. In February 2012, their IT infrastructure operations and data center was outsourced to Fujitsu North America, but then BCBSNC needed to figure out how to manage the huge anticipated transformation to ITIL v3 and improved services, the contract, and the demand for services. This was their first major outsourcing engagement and it brought tremendous changes to the organization, both in the IT area and also in the company at large. At the 2013 IAOP Outsourcing World Summit, the speakers discussed this project, as well as the inception of the Enterprise sourcing office which was created at the same time. The development of the governance program, creation of the governance team, selection and prioritization of processes for deployment, organizational change and transformation approach, process development, and rollout of processes to ensure compliance were covered.

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All the Change in the World: BCBSNC outsources IT infrastructure and changes everything about how their organization works with IT

  1. 1. All the Change in the World: BCBSNC outsources IT infrastructure and changes everything about how their organization works with IT Diane DeGroff VP, Enterprise Sourcing Governance, Blue Cross and Blue Shield of North Carolina Cynthia Batty, Director, ISG © 2013 Information Services Group, Inc. All Rights Reserved.www.IAOP.org Proprietary and Confidential. No part of this document may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval devices or systems, without prior written permission from Information Services Group, Inc.
  2. 2. Blue Cross and Blue Shield of North Carolina+ Blue Cross and Blue Shield of North Carolina is the largest health insurer in the state with more than 4,600 employees and 3.7 million members, including approximately 900,000 served on behalf of other Blue Plans. Our headquarters is in Chapel Hill, NC and we have major operations in Durham and Winston-Salem.+ For 77 years, BCBSNC has served its customers by offering health insurance at a competitive price and has served the people of North Carolina by supporting community organizations, programs and events that promote good health. Blue Cross and Blue Shield of North Carolina is an independent licensee of the Blue Cross and Blue Shield Association. BlueCross BlueShield of North Carolina Confidential
  3. 3. The Power of One: ISG-OneISG is a leading technology insights, market intelligence and advisory servicescompany, offering clients one source for support in driving operational effectiveness. The world’s leading sourcing data and advisory firm. the power A premier of One independent technology The premier independentadvisory serving the TM provider of business and IT U.S. public sector. benchmarking, performance improvement, data and analytics services.Copyright © 2012 Information Services Group, Inc. All Rights Reserved 3
  4. 4. The Five BCBSNC IT Strategic Objectives Supporting the Business Strategies, the CIO vision, and incorporating beneficial IT industry trends. 1 – Transform IT Across the Enterprise  People  Process  Architecture 2 – Deliver Business Enabling Solutions  Business Solutions  IT Foundational Capabilities 3 – Enable the Strategic Use of Information & Analytics  Enable Strategic Information Opportunities  Execute Strategic Information Opportunities 4 – Enable Enterprise IT and Division IS Cost Restructuring  Restructure IT Operating Costs  Enable Enterprise Cost Restructure 5 – Address Regulatory and Health IT Changes  Deliver IT that meets Compliance Requirements  Prepare for Future Policy and HIT ImpactsCopyright © 2013 IAOP. All Rights Reserved. Presentation © 2013 Information Services Group, Inc. All Rights Reserved 4
  5. 5. The task set to the BCBSNC IT Sourcing Governance team Make a massive transformational change over a very short time. ► BCBSNC needed to reduce costs in IT but at Mission the same time increase responsiveness to the business units of this Health Care services BCBSNC IT Sourcing Governance company will partner with key stakeholders ► In February 2012, our IT infrastructure across the enterprise to manage operations and data center was outsourced to outsourced providers of Fujitsu North America technology services and align ► We had to manage the transformation to ITIL these services to support business v3 and improved services, the contract, and capabilities. This requires the demand for services achieving the stated objectives of ► BCBSNC’s first major outsourcing engagement the contract, coordinating and ► Brought tremendous changes to the communicating with all parties organization, both in the IT area and also in impacted, and effectively the company at large managing changes that will occur over the term.Copyright © 2013 IAOP. All Rights Reserved. Presentation © 2013 Information Services Group, Inc. All Rights Reserved 5
  6. 6. The Foundation – Building the Governance Model We created an Operating Model that would help us cover all the aspects that the change required with people, process, and reporting. ► Created charter ► Designed overall governance program and rollout schedule ► Define what processes needed to be in place at Effective vs Commencement Dates ► Determined roles & responsibilities, job descriptions ► Conducted skills assessments of current staff ► Selection of resources (skills, capabilities, personalities) ► Built knowledge acquisition across functions ► Build governance library ► Later creation of Enterprise Sourcing Governance function  Opportunity to leverage governance discipline/processes for other contractsCopyright © 2013 IAOP. All Rights Reserved. Presentation © 2013 Information Services Group, Inc. All Rights Reserved 6
  7. 7. The Transition – Change Management ► Rebadged 178 employees to the new Service Provider ► Implement Service Management processes & tools ► Transition help desk to Costa Rica ► Implement ITIL v3 framework ► Prepare for DR environment move ► Set service delivery expectations ► Create communications programCopyright © 2013 IAOP. All Rights Reserved. Presentation © 2013 Information Services Group, Inc. All Rights Reserved 7
  8. 8. Governing the relationship ► Governance committees ► Creation of Deliverables & Obligations tracking database ► Establishment of relationships ► Contract Management ► Financial Management ► Demand Management ► Service Delivery Management ► Risk Management ► ComplianceCopyright © 2013 IAOP. All Rights Reserved. Presentation © 2013 Information Services Group, Inc. All Rights Reserved 8
  9. 9. Looking out – the next steps for BCBSNC ► Transition – this is always overstated. Have a good contract that holds the service provider to penalties/service credits when critical deliverables are missed. ► Building an effective team – this takes time. Take into consideration if the resources were previously part of the sourced functions. Their focus will likely be defending the old way rather than leading towards the new way. ► Governing the relationship – this requires more work than most expect. Have regular governance meetings and focus on critical and major deliverables. ► Support from executives – keep communication flowing, executive support is critical to a successful organization ► Compliance – this is requires on both sides. Internally and externally you need to ensure that process is being followed.Copyright © 2013 IAOP. All Rights Reserved. Presentation © 2013 Information Services Group, Inc. All Rights Reserved 9
  10. 10. We are happy to talk to you! ► Diane DeGroff:  Email: Diane.DeGroff@bcbsnc.com  Phone: 919.795.6656 ► Cynthia Batty:  Email: cynthia.batty@isg-one.com  Phone: 201-978-0542Copyright © 2013 IAOP. All Rights Reserved. Presentation © 2013 Information Services Group, Inc. All Rights Reserved 10
  11. 11. The end! Thank you!Copyright © 2013 IAOP. All Rights Reserved. Presentation © 2013 Information Services Group, Inc. All Rights Reserved 11

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