Transcript No Slide Title

.…a health and consumer services company making people’s lives better
Systems & IT Outsourcing
Bary Bailey
EVP, Chief Strategic Officer
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PacifiCare’s Future State
• PacifiCare’s Future State is a measured, programmatic
set of business and technology projects that enable our
competitive product leadership strategy
• The company requires business and technology change
and investment
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.…a health and consumer services company making people’s lives better
This is what our business users want...
Key Requirements
• Customer and member product flexibility
and choice
Objectives
• Rapid
product
deployment
• Increased
operating
efficiency
• Flexible and
scalable
systems
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• On-time, one-time and, eventually, real-time
claims processing
• Robust medical management
• Consistent and complete customer
interaction
• Information managed and used as a
strategic business asset
• Standard business practices
.…a health and consumer services company making people’s lives better
But our historical perspective made it hard to deliver...
• Multiple systems
Ancillary
Ancillary
Ancillary
EDI
Internet Site #3
Internet Site #1
VRU
Ancillary
Ancillary
EDI
Ancillary
Ancillary
Internet Site #2
Internet Sites
Ancillary
Ancillary
Ancillary
Ancillary
Database
Database
Ancillary
Database
– Duplicative support and investment
requirements
– Limit business process
transformation opportunities
Ancillary
User
Interface
User
Interface
User
Interface
Ancillary
Core
Legacy
#1
Enrollment
Billing
Capitation
Claims
Authorizations
Referrals
Core
Legacy
#2
Core
Legacy
#3
Enrollment
Billing
A/R
Claims
Authorizations
Referrals
Enrollment
Billing
A/R
Capitation
Claims
Authorizations
Referrals
DATA
WAREHOUSE
• Old “2nd tier” technology limits:
DATA
WAREHOUSE
ENTERPRISE WIDE SHARED
IT RESOURCES
Regulatory
Reporting
Applications
Technologies
Regulatory
Reporting
– E-business transformation
opportunities
– Ability to rapidly deploy new
products
– Deployment of vendor-supported
applications
• Consumes scarce IT resources
on activities that do little to
advance business strategies
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.…a health and consumer services company making people’s lives better
So we created some rules for change...
– Information management and
use
– Consistency will prevail over
variation
• Process
• Mission-critical
• Systems
• Corporate asset
– Commercially available software
– No desire to be bleeding edge
• Core business - proven
technologies and stable vendors
– Access strategy driven by
business
• Efficient solutions to meet
customer demands (e.g.,
Internet, telephone, EDI, IVR)
• Non-core business - lower cost
and acceptable levels of
performance
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.…a health and consumer services company making people’s lives better
And we set a direction towards the Future State…
• The Future State is a set of
business and IT transformation
projects that will:
ENTERPRISE
ACCESS
Internet
Intranet
Consumers
Employees
Providers
Members
Access to PHS
Employers
– Consolidate - eliminate the
Business
Business Logic/Functions
Logic/Functions
VRU
Brokers
EDI
ENTERPRISE
INFORMATION
MANAGEMENT
ENTERPRISE
ACCESS
Paper/EDE
PBHI
RxSol
PDV
Data
Mart
Partner
Connectivity
Rx
Connect
Health
Plan
Data
Mart
TBD
Enterprise
Information
Repository
Data
Warehouse
ENTERPRISE APPLICATION INTEGRATION
deployment of redundant
applications and technologies
Data
Warehouse
– Rationalize - migrate to
common applications supported
by standardized business
processes
TECHNOLOGY INFRASTRUCTURE
– Innovate – identify and deploy
applications and technologies that
promote business transformation
– Organize – provide
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a
framework for future business and
IT investments
.…a health and consumer services company making people’s lives better
We established a plan of attack…...
Future State
Activity
2001
Q2
Q3
2002
Q4
Q1
Q2
Q3
2003
Q4
Q1
Q2
Q3
2004
Q4
Q1
Q2
Q3
2005
Q4
Q1
Q2
Q3
2006
Q4
Q1
Q2
Q3
Q4
Outsourcing
Process Improvement
Core Systems
Implementation
System Selection
Core Legacy Migrations
Rating & Underwriting
Accounting
Consolidation
Key Business Driver
Financial Planning
Future State
Milestones
Integrated Financial
System
Service Center
Consolidation
Customer Service
Solution
Information
Management
Enterprise Access
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.…a health and consumer services company making people’s lives better
And we have made good progress thus far...
• Outsourcing contract finalized and transition is well underway
• Currently implementing several Future State projects
• Final decision on Core Systems and Financial Systems to be
made in near term
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.…a health and consumer services company making people’s lives better
Outsourcing will bring benefits to the business…
• Facilitate the delivery of Future State
• Reduce/control operating expenses
• Improved performance and speed of delivery
• Access to “world class” capabilities
• Increased funding through efficiency improvement
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.…a health and consumer services company making people’s lives better
And independent experts concur...
Low
Typical
PacifiCare
(Pre-Outsourcing)
Software Engineering Institute Capability Maturity Model (SEI-CMM)
1.8
Medium
With Outsourcing
(After 12 months)
3.0
High
Exceptional
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.…a health and consumer services company making people’s lives better
We maintain control, but have developed strategic
partnerships…
• CGE&Y - Future State Strategic Planning
• Keane, Inc - Application Maintenance and Enhancements
• IBM - IT Infrastructure
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.…a health and consumer services company making people’s lives better
And we have aligned our structure to support Future State
– Future State
• Combined business and IT organization
• Retained resources and control of strategy, architecture
and investment decisions
– Ongoing IT Operations
• Outsourcing supplier management
• Systems oversight
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.…a health and consumer services company making people’s lives better
Questions & Comments