A Health Insurance Company Creates a Digital Factory to Propel Its Transformation

HealthCo* had plenty of motivation to embrace digitalization, including competitors’ adoption and customer demand, but the company’s previous efforts had been hampered by several factors.

• Its dedicated IT-service provider lacked the requisite amount of highly skilled workers, including developers, designers, Scrum masters, project managers and others.
• Few employees felt empowered to act as product owners, directing projects and developing customer-centric digital services.
• Politics within the leadership team led to a lack of focus and unnecessary delays.

We proposed the creation of a digital factory, our proven framework for digital transformations. A digital factory acts as a catalyst for implementation; at its core is a learn/build/scale approach that provides a standard development process and the robust training and resource allocation that turn ideas into successfully completed projects.

We worked collaboratively with HealthCo to systematically develop a digital factory, based on the following pillars.

• Extract best practices from other industries. While some of the challenges HealthCo faced were specific to its industry, other industries offered valuable lessons. We connected HealthCo leaders with peers at financial services companies who had worked on successful digital transformations. Banking proved particularly relevant, given its complex client scenarios, high levels of security and regulation, and other factors. These conversations gave HealthCo leaders a clearer look at the path ahead and confidence in the process, having seen what Bain has done with other companies.
• Standardize the development process. A digital transformation is like building a house: Some components serve specific purposes (in this case, managing client needs or providing an interface for clinicians to interact with the insurer), but, at the same time, everything must work together as one cohesive structure. We achieve this by standardizing the development process on four stages: idea, learn, build, scale. This systematic approach not only ensured that HealthCo’s development process had the requisite uniformity and compatibility but also allowed the team to limit development time for each phase to three months.
  
• Implement a digital factory. The most critical component of the engagement—namely, the creation of the digital factory—solved the talent shortage dilemma as well as many of the other obstacles that had prevented HealthCo’s previous efforts to implement digital at scale. A pilot effort involving about 30 employees validated the effectiveness of this approach, allowing HealthCo to scale its digital factory to more than 200 employees, working in a specially designed office space and capable of addressing 15 projects simultaneously.
  One important element of our approach is to immerse employees in Agile development methodologies. This enabled HealthCo to revamp its decision-making processes and helped leaders who may have been reluctant to give up ownership of certain processes understand the advantages of collaborating with the digital factory.
• Scale to support ongoing projects. The digital factory is structured so that a single point of contact deploys resources where they are most needed and ensures that the factory has the talent it needs to support ongoing projects. This reduces duplication of effort and resources, inefficient deployment of workers, and inefficient evaluation of talent needs because these issues are evaluated and addressed centrally rather than through siloed departments. Projects can be launched as soon as the talent is assigned to them.

Results