BCBSMN PROPRIETARY AND CONFIDENTIAL NOT FOR DISTRIBUTION WITHOUT EXPRESS WRITTEN CONSENT MIT:ENG Networking Event 11/4/2011 Realigning IT for Changing Times MIT:ENG = Minnesota Information Technology Executive Networking Group Mission: “To foster growth and professional development through the power of networking and collaboration.” Upcoming Dates: November 10 th MIT:ITM (All levels of Management) November 11 th MIT:CIO (Highest Level of IT leadership) November 17 th MIT:PMG (Procurement, HR and FI Professionals) November 18 th MIT:OMG (Leadership professionals in transition and leaders that are Hiring) December 2 nd MIT:ITM December 9 th MIT:CIO December 15 th MIT:PMG December 16th - MIT:OMG 1
Transcript
BCBSMN PROPRIETARY AND CONFIDENTIALNOT FOR DISTRIBUTION WITHOUT EXPRESS WRITTEN CONSENT
MIT:ENG Networking Event 11/4/2011Realigning IT for Changing Times
MIT:ENG = Minnesota Information Technology Executive Networking Group
Mission: “To foster growth and professional development through
the power of networking and collaboration.”
Upcoming Dates:
November 10th MIT:ITM (All levels of Management)
November 11th MIT:CIO (Highest Level of IT leadership)
November 17th MIT:PMG (Procurement, HR and FI Professionals)
November 18th MIT:OMG (Leadership professionals in transition and leaders that
are Hiring)
December 2nd MIT:ITM
December 9th MIT:CIO
December 15th MIT:PMG
December 16th - MIT:OMG
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BCBSMN PROPRIETARY AND CONFIDENTIALNOT FOR DISTRIBUTION WITHOUT EXPRESS WRITTEN CONSENT
MIT:ENG Networking Event 11/4/2011Realigning IT for Changing Times
• “It’s Not Just Lunch” 12/7/11 – 11:30 – 1PM
Speed Networking at Blue Cross Blue Shield (Open to all group members)
• ** New ** MIT:VGN 12/9 (Virtual Golf Networking)
• ** New ** MIT:PMO 1/17 12n- 1pm – location: Best Buy Headquarters
Facilitator: Rahoul Ghose-Vice President Business Integration
Topic: “How good are you (really) at what you do?”
(designed for resources at all levels within Project Management,
Portfolio Management and Business Analysis)
• Event 2/24/12 – Medica – Noon – 2PM
Developing an Enterprise Mobility Strategy“
Nathan Clevenger - Chief Software Architect at ITR Mobility, and
author of "iPad in the Enterprise“
• Survey – Following today’s event
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BCBSMN PROPRIETARY AND CONFIDENTIALNOT FOR DISTRIBUTION WITHOUT EXPRESS WRITTEN CONSENT
Realigning IT for Changing Times
November 4, 2011
BCBSMN PROPRIETARY AND CONFIDENTIALNOT FOR DISTRIBUTION WITHOUT EXPRESS WRITTEN CONSENT 4
What Is This Presentation About?
• What does it take to transform a mature IT operation in response to changing market conditions
• Typically mature IT operations are set up to run their existing business model, and tend to resist change when facing large and rapid shifts in their marketplace
• This presentation will explain how we are addressing this challenge at BCBSMN, and what we learned along the way
• The circumstances are not unique to BCBSMN, and the lessons can be applied to any similar situation
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Blue Cross Blue Shield of Minnesota
• Largest health plan in Minnesota• Our 2.7 million members can be found in every Minnesota
county, all 50 states and on four continents.• One in three Minnesotans has a Blue Cross membership card
• We serve stakeholders, not stockholders• 2010 $9 billion revenues• Paid out more than $8 billion in claims• Administrative expenses represented 7.4% of premiums
• Large employer • 3,700 people throughout Minnesota
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Community Investment
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Does This Sound Like Any IT Division You Know?
BCBSMN IT Pre-2009
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Designed for Steady State, Not Flexibility
•Full Time Headcount• 600 FTE, 100 to 200 hundred contractors on site
•Organizational Structure• IT integrated with Operations division
•Organization aligned for stability and steady-state• Reliable steady-state operation, stable infrastructure• Primarily home grown architecture and apps• Long-tenured employee base, knowledgeable about then
current infrastructure and apps
BCBSMN PROPRIETARY AND CONFIDENTIALNOT FOR DISTRIBUTION WITHOUT EXPRESS WRITTEN CONSENT
IT Governance Done by “IT Owner”
• IT Division plan needed additional coordination• One size fits all SDLC
• Idealized version of Rational SDLC used for all projects• Proliferation of technologies and duplicative platforms
• 400 primary applications, multiple core technologies• Departmental solutions deployed for the enterprise
• Additional work needed to have scalable solutions
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IT Workforce Management
• Multiple intake streams• No unified resource or demand management
• Duplicate functions across departments• Multiple PM, testing, requirements teams doing the same
thing at a departmental instead of a divisional level• Additional PMO resources needed
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IT Relationship To The Business
• IT considered a cost center, not a strategic asset• Product planning done without partnering with IT
• Lack of transparency and coordination• Multiple communications channels to business units
• Confusion on cross divisional efforts• Need for additional line-of-sight to corporate goals
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Has Your Company Ever Faced Rapidly Changing Market Dynamics?
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Everything Is Running OK Then….
• Your industry is faced with large capital requirements driven by new state and federal mandates• Administrative Simplification, HIPAA 5010, ICD-10
• Business requires transformative investments• New business models and supply chain dynamics• Major shifts in customer purchasing preferences
• Legislation challenges your legacy business model• Doors opened to new entrants through technology• Commoditization of product within core market• Shift in market will disrupt profitable customer segments that
your IT infrastructure is built to serve
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How Should Your IT Division Respond?
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Ask Five Questions
• What is everyone doing?• Who are they doing it for?• What are the doing it on?• How does it support the future business direction?• How can they do it better?
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What Is Everyone Doing?
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Who Are They Doing For?
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What Are The Doing It On?
Claims
Owner
Capability
Applicationand Data
Services
Technology
Claims
Claims Intake
Pre-Adjudication
ProcessingPost-
Adjudication
Clearing-house
STAROnline
PegaSystems
Burgess
Pricing Formatting Security Reconcile Payment
IBM Z90/SYSA-12
EDW
USB VIntel xyzWindows
EMCDev1
ClaimsHistory
BCBSMN PROPRIETARY AND CONFIDENTIALNOT FOR DISTRIBUTION WITHOUT EXPRESS WRITTEN CONSENT
How Does It Support The Future Business Direction? • Build a unified IT strategic and annual plan that addresses all operational aspects of the division•Clear line of sight to corporate goals•Make it quantitative and measurable
•Create and communicate IT management initiatives to achieve stated goals•Enterprise Architecture•Portfolio and project management•Unified work intake and governance•Labor transformation•IT Service Management
BCBSMN PROPRIETARY AND CONFIDENTIALNOT FOR DISTRIBUTION WITHOUT EXPRESS WRITTEN CONSENT
How Does It Support The Future Business Direction?
• Business relevant view of IT financials (show back)• Steady state support and maintenance
• Incidents
• Maintenance
• Small/Medium Enhancements
• IT Foundational
• Invest to divest
• Strategic Projects • Create and communicate clear operational efficiency
targets
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BCBSMN PROPRIETARY AND CONFIDENTIALNOT FOR DISTRIBUTION WITHOUT EXPRESS WRITTEN CONSENT
How Does It Support The Future Business Direction?
• Simplify • Develop, communicate and measure against a unified multi year technology decommission and rationalization plan
• Explicit and deliberate focus on • Emerging technologies• New delivery methodologies
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How Does It Support The Future Business Direction?
Event DescriptionBusiness Area Relea
se 1 (Jan 2011)
Release 2 (April 2011)
Release 3 (July 2011)
Release 4 (Sept 2011)
Release 5 (Nov 2011)
Release 6 (Dec 2011)
1099 Preview Finance X X1099 Reporting Finance X Medicare Part D Creditable
Coverage - submitted ISR requests for ad hoc mailing listsmember mailing lists for fully insured large group, small group and individual for members 55+ or 64+self insured community large group employer mailing list6 separate reports for group specific member mailing lists for members 55+ or 64+
Product Management X
Individual renewal: request a mailing list for all of our active Individual members so that we can send them their renewal letter
Product Management X
Portability and Conversion Renewal:request a mailing list of all Portability and Conversion members so we can mail out their renewal letters
Product Management X
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How Can We Do It Better?
CIO
VP Delivery & Infrastructure
VP Strategy & Planning
CISO
Architecture &Requirements
Steady State Projects
InfrastructureIT/PMO &
Intake
VPEnterprisePrograms
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How Can We Do It Better?
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5. Develop a Collaborative Relationship
with External Partners
4. Ensure that IT Partners within the
Department and with the Business
3. Field an Effective Project
Development & Portf. Mgmt Process
2. Build and Maintain a Robust
IT Infrastructure
1. Recruit, Train, and Retain
World Class IT Employees
Enables IT to…
Creates ability to…
Provides IT credibility to…
If all of these five principles are addressed , it is easier to…
Fosters an understanding about which non-strategic IT
aspects can be addressed by third
parties to…
Sustainable IT Excellence
IT & Business Partnerships
External Partnerships
People
Infrastructure
Project & Portfolio Mgt.
How can they do it better?
How Can We Do It Better?
BCBSMN PROPRIETARY AND CONFIDENTIALNOT FOR DISTRIBUTION WITHOUT EXPRESS WRITTEN CONSENT
How Can We Do It Better?
• Tied all Directors and VPs in the IT division to the same comp metrics• Employee Engagement• Business relevant SLAs• Major projects• Internal IT quality program
2626
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Results To Date
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Server & Storage Management Data Management Contract Management
Information Management Other - IT
Infr
astr
uct
ure
Information Technology & Management
Corporate Administration
Sales & Marketing Provider Network Management
Customer Service
Su
pp
ort
Sys
tem
sC
ore
Pay
er S
yste
ms
Cu
sto
mer
Fac
ing
Medical Management
Claim Processing
Client & Benefit ManagementMember Management
* Based upon our current understanding of how the Business uses IT applications. The Incident Matrix may change to reflect our improved understanding.
SLA Performance
This chart maps the affect of IT incidents across the organization by comparing our performance against defined SLA thresholds for monitored applications*
BCBSMN PROPRIETARY AND CONFIDENTIALNOT FOR DISTRIBUTION WITHOUT EXPRESS WRITTEN CONSENT 30
Business Critical Applications – SLA
Goal Threshold Target Superior
Business critical applications average availability SLA 98.4% 98.9% 99.4%
BCBSMN PROPRIETARY AND CONFIDENTIALNOT FOR DISTRIBUTION WITHOUT EXPRESS WRITTEN CONSENT 31
Major Incidents Impacting Business Applications
Major Incidents
68 70 71
4339
50
44 42
53
43
58
50
14
October,2010
November,2010
December,2010
January,2011
February,2011
March, 2011 April, 2011 May, 2011 June, 2011 July, 2011 August, 2011 September,2011
October,2011
Snapshot Date: October 14, 2011 08:36
Major Incidents Previous Year Average Trend Line (Major Incidents)
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Core Labor Distribution
* Core Resources:BlueCross employees in the CIO workgroupIBM steady-state hourly resourcesCognizant fixed bid resourcesSwat Solutions fixed bid resources
Actual Core* Working Hours
Support & Maintenance
60%
Strategic Projects & Mandates
40%
Actual Hours vs. Plan Hours
40%
60%
25%
75%
Strategic Projects & Mandates Support & Maintenance
Actual Hours Plan Hours
BCBSMN PROPRIETARY AND CONFIDENTIALNOT FOR DISTRIBUTION WITHOUT EXPRESS WRITTEN CONSENT 33
Recurring Service Requests
Active Events R1 Jan R2 April R3 July R4 SeptR5ab
Nov/Dec TotalTotal Required 28 24 30 17 50 149In Process 0 0 0 4 29 33Complete - Met Business Due Dt 21 15 20 6 3 65Complete - Did Not Meet Business Due Dt 0 0 0 0 0 0Received Not Started 0 0 0 0 0 0Not Required 1 3 3 3 3 13New Event Begin Tracking 2012 6 6 7 4 0 23
0 0 0 0 0 0 0Events R1 Jan R2 April R3 July R4 Sept R5 Nov/DecTotalAdded 10 12 15 9 24 70Removed 11 6 4 4 22 47
2011 Recurring Service Requests Summary
0 5 10 15 20 25 30 35 40
R1 Jan
R2 April
R3 July
R4 Sept
R5ab Nov/Dec
In Process Complete - Met Business Due Dt
Complete - Did Not Meet Business Due Dt Received Not Started
Not Required New Event Begin Tracking 2012
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Example DataExample Data
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IT Discipline Is Required For Large Scale Change
• Ask Five Questions• Centralize Portfolio and Resource Management• Create Single Service Request and PMO intake models• Use Enterprise Architecture• Organize around the business model• Reset social contract• Align leadership incentives
BCBSMN PROPRIETARY AND CONFIDENTIALNOT FOR DISTRIBUTION WITHOUT EXPRESS WRITTEN CONSENT 36
Closing thoughts
• Large-scale transformations take time• Perpetual optimism is a force multiplier• Get everyone on the team on the same page quickly• You have to work to reset the relationship with the
