A Balance Between Internal and Outsourced Functions

Several years ago, Blue Cross Blue Shield of North Carolina outsourced most of its technology services. By leveraging newer technologies, Jo Abernathy is giving more control back to the company and offering a more rewarding environment to employees.

Jo Abernathy may have one of the most challenging healthcare jobs in the state. Healthcare providers and insurers are going through a significant period of transition (because of the Affordable Care Act and the move to population health management). Abernathy, chief information officer at Blue Cross Blue Shield of North Carolina (BCBSNC), also has to cope with the incredibly rapid change in technology and simultaneous assessments of which new developments are appropriate for the company and its business objectives. Additionally, Abernathy has to address staff recruitment and retention issues in North Carolina’s highly competitive Research Triangle area. She also has to pay special attention to the skills required to maintain legacy systems and take advantage of the benefits provided by the emerging technologies.

Most recently, Abernathy has been leading an initiative to establish a more balanced approach to controlling internal platforms, processes, and the many functions that were previously outsourced to third parties. “Moving services and responsibilities to outside vendors was a good decision at the time, but the world has changed,” she explains. “We need to blend new developments like public cloud and colocation facilities with internal functions, so that we can better control objectives, processes, and outcomes.”

Speed to market is one of the priorities of this new approach. In a world that has become accustomed to on-demand responsiveness, Abernathy indicates that internal customers expect faster, more flexible project execution and cost-effective pricing. One of the options being explored is the use of open-source technologies that offer prepackaged, automated, and standardized pods that include CPU, storage, and networking that can be quickly scaled horizontally. These require fewer administrators to manage, and they also reduce costs and shrink provisioning from months to minutes.

Abernathy’s department is also investigating open-source solutions for data management and analytics. BCBSNC has implemented Hadoop to provide an alternative approach to processing data through much higher priced data warehouses. It’s expected to cost only pennies on the dollar by comparison. The company has engaged Accenture as a partner to accelerate information capabilities that leverage Hadoop and other key technologies.

“If proof of concept assessments for alternatives like Hadoop are successful, we could see 80 percent savings in areas where they’re appropriate to apply, like consumer engagement and certain other marketing applications,” Abernathy says.

Technologies are not the only factors that are changing. Abernathy has been focusing on changing BCBSNC’s technology environment. To assess new capabilities and solutions, the IT department goes beyond traditional research and consultations with outside experts. Emerging technology vendors are often invited to provide hands-on demonstrations on-site or to join local technology meet-ups hosted by BCBSNC. Negotiating deals that provide flexibility to accommodate new, unexpected developments and competitive advantages that may appear in the near future has also become a priority.

To help the entire department keep pace with what she describes as the “nearly vertical technological change curve,” Abernathy implemented the Applied Learning Alliance. This cooperative initiative, which was suggested by a BCBSNC employee, rolls out ten topics, such as Hadoop and Amazon cloud services, annually. Employees choose at least one and then follow up with a related class, video, and topic-related book. Even if the choice is outside an individual’s current area of responsibility, the topics are selected because they are expected to have significant impact on all areas of technology in the near future.

A New “Culture Club”

To address the competition for tech talent, Abernathy pays special attention to creating an engaging and rewarding atmosphere. In addition to having been ranked by Computerworld as one of its Top 100 Places to Work in IT, she has instituted a number of new programs to support her efforts.

The CIO Culture Club is a group of volunteer employees who act as facilitators and change agents. They are often the first group to vet proposed initiatives and departmental communications. Their input has sparked much larger scale initiatives, such as the company’s annual internal technology conference. Open to approximately 450 employees plus BCBSNC HR partners and key vendor partners, the event provides opportunities for communicating IT strategies, individual professional development, and acquiring practical skills that can be applied directly to developing solutions for ongoing business issues. Recent conferences have included speakers such as FBI agents discussing security, as well as experts on cloud solutions and the Internet of Things.

Abernathy has helped nurture two particularly innovative programs to foster both employee appreciation and new ways to work. The Pitch-IT program encourages employees to submit ideas for approaching various ongoing issues. If selected, an executive sponsor and small budget are provided with the expectation that a prototype version of the idea will be created. One such suggestion was for a “data buffet” that would eliminate the need to send individual data extracts to outside vendors. Instead, a consolidated data repository would be created with presentation and security layers to control vendors’ access to the needed information.

“We got twenty ideas in the first round of Pitch-IT, which is a lot when you consider people had to make time to develop ideas during work weeks that are typically very full already,” Abernathy says. “It demonstrates engagement, empowerment, and trust from employees that they can initiate change.”

Abernathy has also launched BCBSNC’s Innovation Garage. The four-person unit has expertise and experience in a wide range of disciplines and industries and is devoted to working in a lab setting without the highly structured, tightly controlled protocols usually applied to technology projects. In one instance, the Garage addressed a mobile app requested by the marketing department. In addition to needing only a fraction of the normal time to fulfill the request and provide the standard data services needed, the Garage team was also able to add “bonus” security features and payment options.

“The Innovation Garage was able to go from ‘cool idea’ to production very quickly,” Abernathy explains. “It’s not the right setting for every project, but I hope that the idea of ‘build it, kick the tires, see what sticks’ will help change our business models.”

This kind of environment will also help blend the capabilities and expectations of a mixed-generation workforce. “Younger people may not yet have extensive experience, but senior people need to be more willing to experiment, move fast, and perhaps fail fast,” Abernathy says. “So, in essence, we’re trying to create a playground with a fence around it that helps define the boundaries for everybody.”

The technology landscape has evolved beyond what she imagined she would have to navigate in terms of complexity, volume, and the value she challenges herself to provide the company. But despite this, Abernathy still finds the opportunities thrilling: “There’s never been a more exciting time to be in IT.”