Outsourcing for Best Performance | Article

One Company’s Search for Stable, Yet Flexible IT Services

actorBlue Cross Blue Shield of Michigan (BCBSM) knows the value of Shakespeare’s admonition to measure twice, cut once. When a previous relationship with an IT outsourcing provider ended abruptly, the company wasn’t ready to give up on the concept.

“I learned a lot of lessons, especially about the most important questions to ask when looking for an IT provider,” said David Doney, Director, IS Customer Service at the Michigan Blues.

In 2000, the organization was looking at how to manage costs while addressing how to provide resources for its help desk and desk-side support for 8,600 users and its locations throughout Michigan. After a thorough analysis of service providers responding to an RFP, BCBSM made a final decision to arrange for the services from Compaq (now HP). In fact, BCBSM decided to broaden the prior scope of services to those provided by HP to include asset management, IT shipping/receiving and warehousing, desktop and portable computer configuration and hardware refresh.

Check and Double-check

During the search for a solution, Doney handled calls from numerous companies. After narrowing the field, Doney and four team members traveled to the potential providers’ sites. “We didn’t want to rely on the best salesperson’s presentation,” he states. “We wanted to talk to their managers, observe how they actually performed the work, see evidence of sound financial management and executive commitment.”

Doney states they wanted a partner big enough to handle whatever needs would arise from a financial and physical resource standpoint. The partner would tell BCBSM not what it wanted to hear but, rather, what needed to be done to gain efficiency and control costs, without negative impact to BCBSM’s business goals.

But that’s not all.

Resilient Services

For their PC refresh function, BCBSM required a partner that would assist in that effort, even if the health benefits company chose another vendor’s hardware. As it turned out, HP’s equipment met BCBSM’s need from an engineering standpoint; and the provider leveraged other aspects of the relationship, including financing through HP Financial Services, which made a deal that was hard for BCBSM to turn down.

Due to a robust call volume during normal business hours, BCBSM required a dedicated help desk, but after-hours volume was low. HP met the need, providing dedicated support staff from 7:00 AM to 6:00 PM, Monday-Friday, from its Colorado Springs Operations Management Center, while utilizing a shared support model for nights, weekends and holidays in order to reduce costs.

The healthcare benefits company also required its provider to use a particular vendor’s software for problem tickets. HP had not used the software extensively, so it hired an expert from the vendor as liaison for the BCBSM relationship. “If you want it, that’s how we’ll do it;” Doney recalls HP’s commitment. “We’ll help you make it work.”

The BCBSM RFP further required a warehousing facility and process for staging IT equipment. HP’s innovative solution, now known as “BluesParC,” is a service, warehouse and parts depot in Madison Heights, Michigan. Leased by HP and paid for by BCBSM within the monthly per-seat charges, it serves as the central receiving point for all the insurance company’s new IT equipment. Staffers verify shipping and billing information and deploy the equipment as required throughout BCBSM. It’s also the site where information is removed from old machines for security purposes before they are returned, scrapped or donated. “We weren’t sure how it would look when done, but it couldn’t have turned out any better,” Doney says.

Hand-in-Hand

Transition of the work to HP went smoothly. Many of the technicians from a prior outsourcing arrangement voluntarily arrived at BCBSM to keep its desk-side environment up and running during the six-month period of seeking a new arrangement. HP hired most of the technicians when it took over the process.

To ensure it would meet the BCBSM requirement for no downslide on the performance level at the go-live date, HP staffers temporarily moved from Colorado to a Detroit hotel for more than two months while they shadowed the BCBSM help desk crew.

On a monthly basis, they continue to ensure their mutual success. First-and second-level end user help desk calls go to HP’s global service desk center; second-level server management, network and voice calls are handled internally at BCBSM. “Every quarter we send one of our help desk people out there to work with them, or one of their people comes here,” explains Doney. “That’s flexibility – they want to make sure they keep their people up to speed and adaptable to what we want to do.”

Pleased with the flexibility of their new partner, Doney relates an instance where HP went out of its way to ensure BCBSM needs were met. Although their contract called for a certain level of annual IMAC activity over a five-year period, it turned out that the company needed more IMACs the first year than had been anticipated. “HP was flexible enough to offer to take some from the back end of the contract and front load those in the first year or so,” he says. “According to the contractual terms, we have to pay more money when we go over the contracted amount. But HP didn’t want to see us get penalized and pay more money. They cooperate and help us in every way.”

In addition, BCBSM and HP have implemented a very well-defined change management process. There have been 50 change requests since the inception of the contract. “As our business needs changed over the last two years,” Doney states, “our trusted advisor was there to work with us collaboratively to enhance and improve service levels.”

The definition of success is a low “noise level” – no user complaints at BCBSM, says Doney. But the ultimate indication, perhaps, is their “togetherness” spirit. Both BCBSM and HP employees get together socially a few times a year outside the office environment to break down barriers and get to know each other on a more personal level.

“Partnership is all about people and teamwork. It is in HP’s DNA.” states Doney. “That’s how you build success.”

Lessons from the Outsourcing Journal:

  • For a stable relationship, buyers should check for evidence of sound financial management and executive commitment during provider due diligence and evaluation.
  • When a buyer states all its requirements and desired outcomes up front in the request for proposal, providers have the information they need to craft innovative, highly effective outsourcing solutions that meet the buyer’s needs.
  • Both parties’ willingness to demonstrate a cooperative partner approach and reward teamwork is as important to long-term success as leveraging the provider’s resources and expertise.


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