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William K. Wray is not exactly technology-averse. Since becoming CIO at Blue Cross Blue Shield of Rhode Island...
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(BCBSRI) in 2009, he has wrestled a $200 million overhaul of the company's core insurance processing systems into shape. "It was the technology equivalent of a heart, lung, liver, stomach, brain transplant," he jokes.
But Wray's approach to innovation definitely errs on the side of people when it comes to enabling the business with technology. How so? Well, he dispatched IT folks to sit side by side with BCBSRI's frontline employees and diagnose how IT tools -- the cheaper the better -- can improve the customer service process. (In one case, the software solution cost $25.) He also is big on something he calls operational excellence, and it's the business yardstick he uses for all his IT projects.
At BCBSRI, the Stanford- and West Point-educated Wray oversees all departments responsible for technology, operations and customer service. Before moving into health care, he served in a variety of capacities at Citizens Financial Group, and capped his 16-year stint there in the position of vice chairman and CIO. He will be among a panel of health care experts speaking at the MIT Sloan CIO Symposium May 18.
Bill, before we talk about your approach to innovation, I have to ask, what is a financial IT guy like you doing in the health care industry?
William Wray: I basically solve problems for money. It doesn't matter to me whether they are technology problems or operations problems or service problems. And what I found is, the things that work in financial services for the most part work in health care, with a few interesting wrinkles. In fact, the health care industry can learn a lot from what other industries have had to do in the way of problem-solving and operational excellence.
Describe what you found when you got to BCBSRI in 2009.
Wray: My major challenge was [that] the company had committed to a massive core [insurance] systems replacement project. I had a lot of experience with major projects in my prior life. My first job was to make sure that the significant investment in effort we were putting into that was appropriately aligned with what we needed to do as a business and as a company.
The project for the most part -- and this is a typical mistake many companies make -- was viewed as a big IT project and once we just installed this gigantic piece of software everything would be wonderful. The program management discipline around it had been outsourced too much to an outside vendor. So, I had to do the basic Project Management 101 stuff of making sure we had the right governance and the right approach and expectations, and all the other things needed to make an investment of that size work. And it has been quite an effort.
But the good news is we are under way. We're beginning to roll this into production, and things are in reasonably good shape, although with any big project you're always on the edge of a cliff. So, we have continued to be very cautious and disciplined as we move forward.
You said companies often make the mistake of looking at software as the solution to the problem. Why is that a mistake, and what is your approach to innovation?
Wray: It is a mistake because software doesn't solve problems. People solve problems. My approach is to say, "Let's define the problem first." You don't define a problem as saying, "I need a new database."
What is operational excellence?
Wray: I define operational excellence as meaning you've got good numbers -- on the cost side if that is what you're dealing with, or the revenue side; that the people who work in the business are happy and that the people who are their customers are happy; and then finally that you're managing risk well. So, those are the three dimensions: finance, satisfaction and risk. If you think about any business issue in those three dimensions, it really focuses you on what you need to do to solve them.
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What kind of projects are you involved in now?
Wray: The interesting IT projects to me right now are the ones where we can go right to the frontlines, whether it is a call center agent or someone doing enrollment in Medicare, and make that process faster, better and cheaper, so that not only the customer is happier with it, but the person doing the work also is happy.
How do you know which projects need help?
Wray: It is wherever people are whining and complaining. It's pretty easy, not much more systematic than that. You go to where the problems are. You talk to the people out there every day -- and that is the call center agents. No one knows more about what is actually going on than people who answer phones for a company with people who need stuff fixed. You talk to enough call center agents, you get the Pareto 80/20 chart of things that must be fixed pretty quickly.
Now, the classic IT response was "Oh, we need a new call center system, let's go find $50 million and give it to Siebel or Oracle or Pegasystems." By the way, those are all perfectly nice companies with good call center stuff. Or you can say, "Let's actually sit with the call center agent while they are answering calls, let's watch what they do, and let's see if we can actually give them some shortcuts using interesting tools that one of the main virtues of [is that] they are really cheap."
So, a call center agent may be looking something up on a Pega database, and they may also have to look something up on a mainframe. Well, you can use tools like Attachmate, which might cost like $25, and you might be able to take 30 seconds out of that call center agent's lookup time, because they are not having to type things multiple times and they are not making mistakes -- and they are really happy. And the customer is really happy.
The projects that interest me, then, are these iterative, incremental, just-make-people's-lives-better at work and on the phone. When you begin to get the aggregate of these projects, you start to get those operational excellence numbers: Your unit costs go down, your service levels go up, people are happier and you're managing risk more effectively.
With something like your call center project, your approach to innovation requires IT people to be cultural anthropologists.
And as far as I know, a lot of IT people are not trained to do this. How did you pull that off?
Wray: My preference is to take a couple of gifted people who understand technology but also understand people, have them sit literally side by side with the person doing the Medicare enrollment, for example, watch what they do, and say:
"You know, it's taking you 20 minutes and I know what two minutes of it is because you have got to enter it in this system and then you've got to enter it the same way in [another] system. And then the next day, if those two system entries don't match up, the thing kicks back and you have to do it again. What if I use some sort of a tool so you only have to enter it once? The tool scrapes screens, and it types things out, and I just took two minutes out of your 20-minute process. And by the way, I also reduced your error rate from maybe 10% down 10 basis points. What difference does that make?"
And the answer is, it makes a big difference. You're taking time out of a process. You're taking errors out of a process. And also, you're making that frontline clerk really, really happy, because their job is simpler. And the point is, the classic approach is where you collect all of these problems, you write them up, [and] you look for one big panacea software to solve it, instead of knocking them out one at a time.
The aggregate effect of these little solutions was to take this 20-minute [Medicare] process down to a five-minute process, and to take the error rates well below 1%, from the 8% to 10% where they were before. We did this at a cost of almost literally zero, because the types of tools you need have a very low unit cost and it was really just the cost of our internal programmer-slash-therapist, who was able to understand what was going on. And everyone is happier -- we're faster, we're better, we're cheaper. Our customers are happier. On every dimension we got a win-win-win in the way I look at operational excellence.
How do you keep yourself from getting mired in the status quo?
Wray: Some of it is temperament. I'm just sort of a natural change agent myself. I don't like to get bogged down in anything, intellectually or physically or in terms of career role. But I do constantly try to keep from getting into a rut. So, probably the best way to do that -- the people who are on my team who work for me, I pick ones who are insolent in appropriate ways.
The people I really trust and work with -- both peers and people who work for me -- are good-natured, but they are fearless about letting me know if I am being a jerk about something or if I am not thinking clearly. And the other thing is I don't make a lot of decisions myself. The only things I think about with respect to decisions are, are the conditions right for a smart decision to be made: that is, the right people, the right attitude, the right ethical climate. If I know that's in place, I don't really care how people came out on the decision.
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