S+B: Given how much of your efforts are currently consumed by the reform agenda, what do you think are the key capabilities you need to put in place to compete?
McCARTHY: At the highest level, we need to interact with consumers in a very different way. The health insurance industry has been pretty much a B2B industry. Most of the large companies have some individual business, but for the most part, the interaction with our members is through their employers. And as we look ahead in the context of 2014, and the exchanges that will be put in place to offer individual insurance coverage, we will need more product flexibility, product transparency, and the ability to understand our consumers in a way that we haven’t understood them before. So we need a business-to-consumer set of capabilities that we haven’t had in the past.
S+B: Do you expect IT road maps to give you a better handle on your investments for a more diverse business and to help you think about what things are shared and what things are unique to some of the businesses that you’re getting into?
McCARTHY: Absolutely. Our architecture team does a great job of assessing the capabilities that all the businesses are looking for, and the common capabilities. As you know, a number of years ago we implemented a service-oriented architecture here, and we have become very good at looking at how we can build new assets and then reuse them. Having a blueprint and capability approach allows us to reuse both those assets and the processes that surround them. And we track the extent to which we reuse those assets, so we can measure how well we’re doing in terms of the benefits that we’re driving back into the businesses.
S+B: Do you also measure the success of road maps and the progress you’ve made?
McCARTHY: Yes, we do. Each year, as we go through our strategic planning process, one of the inputs is the business’s road map. As part of the process, we update that road map with whatever new thinking the business is bringing forward into its strategy, and whatever new thinking we’re bringing into the conversation from the meetings that we’re having with our technology partners and other technology-related activities that we’re aware of.
S+B: All this sounds like a great deal of work. Who does it all?
McCARTHY: We have mutual accountability here. We have a rigorous governance process that starts at the top. We have an investment committee chaired by the CEO. Our executive committee sits on that investment committee, as do the business leaders who are responsible for the operating units. The investment committee is responsible for the investment decisions and for decisions associated with the blueprints and road maps that we focus on each year, and those again are tied directly to the strategic plan and to the work that we want to accomplish over the coming planning period.
This is then driven down into the organization through our management processes. The governance of the portfolio of work that we do, week in and week out, year in and year out, is overseen by the CIO and our IT team in conjunction with our business leaders, and every project has a business owner and an IT owner. We track the status of everything that’s done — scope, schedule, cost — as well as the work that we’re doing to continue to maintain the integrity of, and advance, the architecture. So we’ve got a pretty robust governance process, managed by both the business and IT, and we keep refining it.