But what about getting your entire leadership team to buy into wide-scale transformation? That's another matter entirely.
That buy-in requires a convincing business case - something many change agents have not been able to pull off. At Oracle MBX and MCX 2019, Amerell told me how his team did it.
Health care insurers - facing the cost control and wellness challenge
I don't envy health care insurance leaders. Health care costs are spiraling. Containing those costs without passing them along to your constituents is a tough mandate - one that eludes my own health care provider. On the flip side, however, advances in wearables add powerful tools to the push for wellness - something a savvy health insurance provider can harness. I asked Amerell - where does Blue Cross Blue Shield of Michigan stand on all this?
Amerell told me he's a big advocate of wellness programs. In his view, wellness and cost control go hand in hand. He brings out another point I didn't. It's about enhancing an entire health supply chain:
Yeah, we've got some of those significant healthcare incentive programs - wellness programs that are really looking to drive efficiencies, and help people with their cost containment. We've also got programs with hospitals and providers, looking for ways for them to be more efficient, more effective. We're constantly looking at the full picture, not just one piece. I call it the value chain - we're looking at the whole value chain.
For Amerell, a non-profit like Blue Cross Blue Shield of Michigan has a big advantage over for-profit health insurers:
That's a conflict of interest. When you're a [for-profit-insurer], you're trying to make money for your shareholders, but you're also trying to keep costs down, in theory, for your policy holders. That's a struggle.
Amerell is on a different mission:
I work for a not-for-profit mutual company now, and one of our missions is thin margins - make enough money to pay our bills. We're not looking to make ten percent margin. I think our average margin over the last ten years has been half a percent.
That's a purpose you can get behind:
We've got an obligation to pay people's claims - people rely on us. We've got to be good stewards with their money.
The transformation imperative - and the legacy systems in the way
But when you're running on legacy systems, bogged down in manual processes, it's hard to be a good steward. And that's where Amerell's transformation imperative comes in. It's not a small project; Blue Cross Blue Shield is the largest health insurer in Michigan. With more than $30 billion in annual revenue, "BCBSM" supports a network of 152 hospitals, 33,000 doctors and more than six million members. When Amerell joined BCBSM, he saw the conflict between the mission and the technology right away:
I joined this health company a little over four years ago. One of the early observations was we were very inefficient... Right now, we operate on four different ERP systems, four different general ledgers. We've got thousands of manual journal entries every month. We spend hundreds of hours every month reconciling data and using spreadsheets.
That's not the way forward:
It's the 21st century - there's a whole different way of doing things.
But if you expect this to be a straightforward "pick a cloud application" story, you'd be wrong. From the beginning, Amerell viewed this as a people/process push, with training and skills development at the center:
We're on a big journey right now to change our people, process and technologies. We're putting in one new ERP system, a cloud-based ERP system across the enterprise. It's touching hundreds of people. As part of that, we're teaching people new skills. Teaching them how to use this new system, plus teaching them new skills with new technology like RPA, robotics, and blockchain.
Yes, it's change management, but it's more.
We're trying to introduce them to different ways of doing things, helping them realize that we have to do things differently. We have to be leaders in helping the organization change, to be more efficient and more effective - and operate at a lower price point.
Choosing new tech - and building new processes
How did Amerell and team settle on the Oracle Enterprise Resource Planning Cloud? Blue Cross Blue Shield of Michigan already had a good relationship with Oracle, so turning to Oracle made sense:
We knew Oracle had a very good product. We spent our time and energy really thinking about how extensively can we change within the finance organization, and the IT organization? Finance, procurement, and ultimately HR will be on one enterprise ERP system.
And how important was the cloud aspect of Oracle Applications?
We're moving more and more to the [cloud model]. What I like about it is: it's just like with your cell phone. You're constantly getting system upgrades - you don't have to do anything... Same thing with the cloud product. I'm going to continually get better and better products based on feedback that Oracle's getting from their vendors.
Avoiding that IT burden allows a focus on transformation:
It's not just about finances; it's about all the parts of the organization. We spend time and energy thinking about our new operating model, our new operating structure as opposed to thinking about the different cloud products that were available.
I told Amerell: his finance dilemmas sound like the classic legacy pitfall. When you spend so much time organizing and compiling data, you have very little time to analyze it.
You're spot on. Why is revenue different that we had planned for? Well, we sold more contracts; more sold more policies. That was the extent of our insight.
Amerell is determined to change that:
Tomorrow, we'll have one repository for all of our data. We'll be able to drill down if the number looks different and unusual. We'll be able to drill down back into the source of the information and get a true perspective on what is driving change. We don't have that today.
The wrap - from business case to go-live
Amerell and his team are buckling up for a big year. They are targeting a go-live of spring 2020 for Oracle ERP Cloud, with Oracle HCM Cloud on deck. Choosing an implementation and change management partner was rigorous. Amerell put out RFPs for both, before finally selecting KPMG for implementation and PwC for change management.
For change agents looking for tips on building a cloud business case, Amerell advises: stay the course. His business case wasn't approved the first time around, but he kept at it. In fact, Amerell bet his job on it, and that passion was persuasive. Amerell preached change early and often:
We built the case that we couldn't continue to operate the way we were. We were spending too much time, too much energy, too much cost. One on maintaining those old systems, two on cobbling together information on a monthly basis to present as our results.
Amerell says getting users into sandbox environments with new tools pays off - even freeware versions. But he also advises: embrace a broader vision of change, beyond the power users.
The change management that we talk about - it's not just about the staff that are using the tools. It's about collective knowledge around change, collective acceptance around change.
That's the business case in a nutshell:
- Convince your leadership there is an imperative to change.
- Convince them you have a good plan and process in place for doing it.
Whenever you talk about automating the mundane, there is the fear of job loss. If you don't present an inspiring and truthful vision, users will push back. It's really about freeing up your talent to do what they do best. Example: employees don't appreciate being told they are moving from "low value" tasks ("Wait - my current job doesn't have value?") But automating-the-mundane and freeing up time for things that matter - that's a message employees can rally around. Over time, Amerell honed his message, and users responded.
Sounds like the buy-in is there - on all levels. I look forward to reporting back on the results.