Partnersmith A Partnersmith Case Study The Challenge: Managing and maintaining a collaborative relationship to realize the full value of a complex outsourcing arrangement The Solution: Partnersmith Outsourcing Manager, from Vantage Technologies, Inc. give some 200 BCBSRI and Perot Systems employees key governance tools such as: Issue Management and Escalation Tool Performance Management Tool Contract Amendment Tracker Additional Resource Charge Authorization Process Managing a Critical Outsourcing Partnership The ability to manage a partnership effectively is one of the indispensable core competencies of an organization that wants to realize the full potential of an outsourcing relationship. A critical outsourcing partnership by nature poses a series of major challenges to both parties as they seek to make sure the partnership fulfills its strategic goals. BCBSRI is the largest health plan in the state of Rhode Island and therefore a leading player in the regional market. In 2004 BCBSRI had 600,000 members and processed $1.7 billion in claims. It handled 900,000 customer inquiries, and its automated response system answered 880,000 calls. In 2003, after a careful process of evaluating their options, the BCBSRI leadership decided to outsource the back office functions of all BCBSRI s IT infrastructure, application development, claims processing, and membership services to Perot Systems. BCBSRI shifted six hundred employees to Perot Systems, and honoring its commitment to the community, arranged for them to stay in the Providence area with comparable salaries and benefits. The strategic goal was to reduce costs, tap into Perot Systems deep expertise in these areas, and improve service levels for customers. CEO James E. Purcell explained BCBSRI s outsourcing strategy like this: The rationale behind the outsourcing decision was more than cost. It was a strategic decision that would allow us to concentrate on our core competency providing health and wellness products and services to our membership. The decision to outsource was a fundamental foundation to the company s transformation from processing claims for its members to being a health and wellness partner. In support of that strategy, BCBSRI engaged the outsourcing advisory firm EquaTerra to assist with developing the project s governance team and collaborative structures, and called on Vantage Technologies for Partnersmith, a set of software tools designed to enable partnerships to achieve their full potential by facilitating more effective collaborations between organizations. Complex Challenges The partnership between BCBSRI and Perot Systems presents all the complex challenges that go with transitioning a large number of employees and outsourcing an entire ensemble of IT functions, including the crucial function of claims processing, and the associated suite of large-scale enterprise-wide software applications. A large number of transitioned employees have to take on new roles. New processes have to be put in place and fine tuned.
The project governance team has to take on responsibility for managing an intricate and always evolving contract. A complex partnership like this depends for its success on an ongoing process of negotiation, dealing with difficult issues effectively and transparently, and managing scope changes to the satisfaction of both partners. Success depends on achieving consistency in the way projects are approved and managed, and evaluating performance based on shared data that can be the basis for objective conversations. The overarching task has been managing and maintaining the mutually beneficial collaborative relationship between BCBSRI and Perot Systems. Outsourcing advisory firm EquaTerra has contributed its expertise in designing governance processes to give effective structure to the relationship. Partnersmith software is being used by about 200 people working to manage the BCBSRI-Perot Systems partnership. The key concerns are performance management, financial oversight, contract administration and amendment, and issue management and dispute resolution, and Partnersmith was designed with these tasks explicitly in mind. BCBSRI Profile: BCBSRI is the largest health plan in the state of Rhode Island and therefore a leading player in the regional market. In 2004 BCBSRI had 600,000 members and processed $1.7 billion in claims. It handled 900,000 customer inquiries, and its automated response system answered 880,000 calls. The Issue Management and Escalation tool has worked out well for us. It is easy to use, and lets us focus in on problem areas quickly so we can come up with solutions that work for both sides and keep the project on course. Kathy Wiggins, Service Level Manager - BCBSRI Bringing the Contract to Life and Keeping It Alive No complex outsourcing partnership can work successfully as a static arrangement. It is necessary for the partners to engage in an ongoing process of negotiating and adjustment. Vantage Partners has a long and rich experience in facilitating complex negotiations and crafting productive outcomes, and Partnersmith embodies this experience in a software platform that supports all facets of this process. Partnersmith provides a convenient mechanism for adding and modifying contract amendments, and submitting them for approval. This makes the process of managing contract changes fully transparent to stakeholders on both sides. Outsourcing contracts are living documents that embody the changes that occur in the relationship over time, so the Partnersmith Contract Amendment Tracker supports structured version management and amendment archiving, to manage multiple contract iterations and the institutional memory of the interests behind them. Partnersmith creates a searchable archive of amendments to the basic contract which have been proposed, are in progress, or have been adopted. This provides complete visibility into the history of the evolution of the contract. A successful outsourcing partnership always requires a mechanism to deal smoothly and
efficiently with requests for adjustments to the original contract charges based on volume changes and other factors. For this Partnersmith provides an easy-to-use system for making requests and issuing approvals for additional or reduced charges. The party requesting the change enters all the relevant parameters, along with descriptions of the additional resources needed, and the associated charges are automatically calculated. Partnersmith s workflow engine routes the request to the right stakeholders depending on the towers affected and the amounts involved, for their comments and decisions. Partnersmith Tools: Issue Management and Escalation Tool Allows team members to specify issues that need to be escalated, to assign each issue an owner, to prioritize issues, and to track progress in resolving issues that have been raised. Alerts can be sent out to a targeted group of people for issues that need immediate attention. Performance Management Tool Collect in one place all relevant information on service level defaults, associated penalties, and root cause analyses Managing the Evolving Partnership A healthy partnership requires smooth, transparent, and effective mechanisms for raising and addressing the difficult issues that inevitably arise along the way. Partnersmith provides a software infrastructure that enables issues to be surfaced in timely fashion and conflicts to be faced squarely and productively resolved. For example, Partnersmith includes an Issue Management and Escalation tool, which allows team members at BCBSRI and Perot Systems to specify issues that need to be escalated, to assign each issue an owner, to prioritize issues, and to track progress in resolving issues that have been raised. Alerts can be sent out to a targeted group of people for issues that need immediate attention. Partnersmith maintains an archive of issues that can be searched by topic, status, and priority, and by the people assigned to own the issues and the associated action plans. Partnersmith provides opportunities for ongoing process improvements by means of reports on the timeliness of issue escalation, patterns of recurring issue types and solutions previously tried. Contract Amendment Tracker Tool Add, modify and search contract amendments, and submit them for approval. The tool supports structured version management and amendment archiving, to manage multiple contract iterations. Additional Resource Charge Authorizations Manage the process of creating ARC/RRCs, calculating charges, vetting requests and documenting approvals
Kathy Wiggins, Service Level Manager for BCBSRI, comments: The Issue Management and Escalation tool has worked out well for us. It is easy to use, and lets us focus in on problem areas quickly so we can come up with solutions that work for both sides and keep the project on course. Managing Performance Performance management is another essential requirement for a mutually beneficial outsourcing partnership. BCBSRI and Perot Systems have agreed to more than eighty service level objectives. Partnersmith gives a synoptic view of service level objectives, the definitions and metrics they use, their definitions and assumptions, any amendments made, and the agreed upon reporting methods. The Partnersmith Performance Management tool allows Perot Systems to collect in one place all relevant information on service level defaults, associated penalties, and root cause analyses. Lance Kirk, Vice President Northeast for EquaTerra, and for a time, acting CIO for BCBSRI, observes: Partnersmith supports a real collaborative management approach to performance; it s not just a question of what today s performance is, but why we are measuring what we re measuring, what the history of this particular metric is, and what it s helping us learn about how to get better business results. With Partnersmith we get full visibility into all aspects of initiative management, including all the vital quantitative measures we need to track. With this ready visibility, we can maintain a consistency and discipline in all our processes that otherwise would be very difficult to achieve. Outsourcing Management: Outsourcing Management automation provides organizations with more than just efficiency gains. By capturing information about how issues are resolved and what change orders are negotiated over time, for example, BCBSRI and Perot Systems are creating audit trails, developing an institutional memory that facilitates learning from their experience, and helping new personnel get up to speed on the history of the relationship. Similarly, the reports they can generate about ongoing and past projects can inform future planning, budgeting, and identify opportunities for process improvements. Kristine Klinger, Assistant Vice President of Initiatives Management Office - BCBSRI Managing Projects and Tracking Progress Partnersmith provides BCBSRI s Initiative Management Office (IMO) with a comprehensive project management capability that gives immediate access to an overall summary of a project, its workflow, and its milestones. Authorized team members can see a Summary Report that shows the project timeline, the budget, any change requests, how far along the project is toward completion, and how much of the project budget has been used so far. The Project Management tool can issue alerts to colleagues and their counterparts on issues that require urgent attention. The IMO relies on Partnersmith to track projects through all stages, from the original business case, through the various spending authorizations and funding phases, to the deliverables, to the project evaluation. They can check the project plan, see weekly status reports, and track changes to the project in terms of timeline and budget. Team members can make new documents accessible to both teams by simply uploading them to the project database, and all the relevant documents for each phase of the project are just a click away.
BCBSRI s Kristine Klinger, Assistant Vice President of Initiatives Management Office, says: With Partnersmith we get full visibility into all aspects of initiative management, including all the vital quantitative measures we need to track. With this ready visibility, we can maintain a consistency and discipline in all our processes that otherwise would be very difficult to achieve. A Living Partnership To succeed, a complex partnership must incorporate an ongoing process of negotiation that manages changes in scope and solves problems as they arise. Partnersmith is a software platform designed to support and facilitate a continuous process of negotiated change and mutual accommodation. Easy Deployment: Partnersmith s Outsourcing Manager can be deployed on your network or as is the case at BCBSRI as a Vantage-hosted solution. Either way, access is always secure and encrypted through https protocols. Partnersmith can enable collaborating partners to avoid confusion, avoid redundant discussions and wasted time, and be clear about their interests and goals. It supports transparency, clarifies roles and responsibilities, and supports repeatable processes, efficient communications, and effective decision making. As further needs become manifest, Vantage is ready to enable additional Partnership features that put negotiation and relationship management best practices at the users fingertips, with special tools for negotiation preparation, meeting planning, collaborative problem solving, and relationship health checks. A critical outsourcing partnership is and must be a living entity, a dynamic relationship that adjusts and adapts to changing realities. Both sides share an interest in building and maintaining a healthy, flexible partnership that will deliver the expected value. Vantage s Partnersmith functions as an enabling tool, a technical infrastructure that supports a healthy partnership that meets the needs of both sides. VANTAGETechnologies Brighton Landing West 10 Guest Street Boston, MA 02135 Attn: Danny Ertel T 617 254 6712 F 617 354 4685 www.vantagetechnologies.com