When I joined Pacific Blue Cross in 2003 as VP of IT, the CEO and I agreed on two foundational principles: 1. Technology has no value by itself, and 2. Technology management must switch its focus from operational to business enabler. These principles may seem self-evident, but the truth is, when there’s a flurry of projects, all of them important to some aspect of the business, technology management can all too easily get swept away in putting out fires. This seemed to be what was happening at Pacific Blue Cross when I arrived. With nearly 2 million members covered, Pacific Blue Cross is the market leader in providing health-care and dental coverage to residents of British Columbia. Our subsidiary, Blue Cross Life, also offers life insurance and disability income protection.
While I understood my mission—turning the IT department into an enabler of business—the journey has been far from straightforward. It’s been a long road with many bends and even a few dead-ends. Even so, there’s no doubt we’re making progress. How did we do it?
Project Management to the Rescue
First and foremost, we began to align every project to Pacific Blue Cross’s Balanced Scorecard. The Scorecard shows and measures the organization’s performance from six perspectives: qualitative, quantitative, infrastructure, clients, people and community-related goals. Every project is now justified in terms of how it supports the goals described in the Scorecard. That keeps the company’s goals clearly in sight for all and shows how technology relates to and enables the business.
After assembling a list of all the projects we were working on, I introduced the project management office (PMO) function. This office oversees all projects of more than one month’s effort—from the business case to a post-implementation review. We fashioned this as a corporatewide PMO, because all projects require disciplined management and almost all projects at Pacific Blue Cross have a technology component.
The business welcomed the PMO, since it gave it an overall view of all projects (in the planning, execution or close-out stages) as well as monthly updates on their status.
To ensure the success of this new process, the PMO (a manager, three project managers and two to five contract project managers, depending on the project mix) conducted three half-day workshops for personnel who would be managing or sponsoring projects. These sessions helped to obtain buy-in. But as theory is nothing without practice, the workshops were followed by individual coaching sessions for the project managers. Finally, we put all the project management–related processes online so that everyone has a shared knowledge base.
The PMO regularly reports project status to IT management, the executive committee and the board of directors through the aptly named Traffic Light Report. This report lists each project along with a short description, its schedule, the stage it is at and a status comment. Next to the project is a red, yellow or green symbol that quickly identifies whether the project is on time, on budget and on scope. The report is also posted on our intranet so that all employees can follow a particular project’s progress. The Traffic Light Report has become a critical tool for demonstrating technology’s value to the business.
Gate 1, Gate 2, Gate 3…
In my second year at PBC, I introduced IT governance—in the form of a gating process. Why wait until the second year? Because past experience has taught me that too much change, introduced too quickly, does more harm than good. Circuit overload may cause pushback!
Now, before a project can even get to the doorstep of the approval process, it has to be sponsored by a vice president. Only then is it ready for gate 1—or what we call the “thumbs up/down” gate. Here, the executive sponsor presents the idea to the executive committee, and the members give it a thumbs up or thumbs down. If the project is approved, the proposal continues to the next level (gate 2).
For gate 2, the sponsor presents a detailed cost-benefit analysis, because no matter how wonderful the idea, if the cost is too high for the projected benefits, that’s it. If it passes gate 2 and is more than $500,000, a gate 3 or detailed business case is prepared. Gate 4 is only for projects that have to be reviewed at the executive level because they cost more than $1 million or are very complex. Gate 5 is the post-implementation review.
Last year, for example, our senior VP of client development presented a gate 1 concept of adding dental and extended health usage information to our member portal. The executive committee gave his idea the “thumbs up.” The PMO then helped him to develop a gate 2 high-level business case, which was also approved. As a result, our members can now obtain information online about their coverage usage, thus reducing the number of calls to our call center.
Through our “gating governance,” everyone can see how projects are prioritized and approved. We’re able to plan and measure benefits of projects and assess how they enable our business initiatives.
Even though projects of more than a month’s effort are now overseen by the PMO, projects of smaller effort also need to be kept aligned with business needs. To do that, we established the change review board. Headed by a manager from the business area, this board reviews all change requests, assigning priorities based on how the change will enable the business. Three years ago, IT was swamped with more than 700 change requests and there was not much hope we’d get to all of them. So we asked all owners of change requests to resubmit any requests that were over a year old. With the change review board prioritizing the requests, we’re now able to see which are the most pressing, which ones overlap and which will be superseded by some that are more encompassing.
In three years we’ve come a long way, and these new initiatives would not have succeeded without the active involvement of senior management and the IT team’s hard work. But we still face a number of challenges.
For instance, we still need to do a better job of conducting regular postmortems of larger projects to gather lessons learned. And even when we do gather lessons learned on an ad hoc basis, we still aren’t disseminating them to the appropriate personnel so they can learn from previous experiences. Some of the new technology we are implementing—portals, document management and knowledge management—should help with this.
The road to Rome wasn’t built in a day. But there’s one thing we’re confident of: The framework we’ve put in place not only ensures that IT is already more focused on business, but that focus is advancing our business goals. In short, IT is enabling all the employees of Pacific Blue Cross to serve our members better.