Nov 18, 2014

Implementing Change Amid a “Perfect Storm” of Changes

Posted by Jeannette Cabanis-Brewin in Culture & Change Management, Project & Program Management, Performance Measurement, Project Management Office (PMO), Strategy Execution | 2 Comments

"They had 1200 project managers … we had 20. I thought: “We’re dead.”

In 2012, WellPoint, one of the nation’s largest health benefits companies, serving 67 million people, stood at the center of a “perfect storm” of changes in their markets. A global recession, an aging population of Baby Boomers, and the advent of the Affordable Care Act (Obamacare) presented the company with what could have been an unmanageable deluge of new Medicaid and Medicare beneficiaries in the government contracts portion of their business.

In the midst of all this change, they added one more: they acquired Amerigroup Corporation. With the complexity that M&A projects add to corporate life, you might think that this move would add to, rather than solve, their problems. But Amerigroup had something that Wellpoint really needed.

The Implementation Management Office (IMO) … this year’s PMO of the Year.

We interviewed the IMO’s leader, Staff VP, Business Solutions Sarina Arcari, PMP by phone about the history and accomplishments of the IMO.

Q: How long have you personally been associated with the PMO?

I’ve been with the PMO since before there was an IMO. The period covered by our award application is May 2010 thru 2013, but the Amerigroup story actually started in 2007. At that time, our COO forbid the term “PMO” because some years before they had invested millions in a project management software application, without having the process maturity to really use it effectively. So they hired me, and asked me to put the processes in place first. We eased into the IMO gradually. We began to focus on strategic execution. To do that, we moved things like IT “keep the lights on” projects out of the portfolio.

Amerigroup was a 100% government health insurer. We contracted with state and federal governments to manage Medicaid and Medicare. Then, along came the economic downturn in 2008: more people lost their jobs and began applying for Medicaid and at the same time, because of the downturn and the high unemployment, state tax revenues dropped. So, there was more work for us, but of the same flavor as what we were well versed in.

But then … Obamacare became law, which was a cataclysmic change.  Any healthcare insurer who did not prepare for the new law by improving their project management processes would have been buried by the avalanche.

We had to take the processes that we were used to using and throw them out the window. States were scrambling to implement stuff that had never been done before. There was a very labor intensive design phase, so we added more skill sets around the front end. You can’t bake the cake until you have the recipe. Fortunately for me, I am a PM junkie. I always joke that I was born a project manager. And I have a good team around me who like to solve problems. We were able to take all this newfangled work and mix it up, implementing ways to work on the fly, but always relying on basic, standard PM processes.

I heard people talking about the recession and job loss but honestly I couldn’t relate because I was busier than I had ever been in my life.

Then, we were acquired by WellPoint.

Q: Your application said that WellPoint was No. 47 on the Fortune 500 list. But when I looked it up last week, they had moved up to No. 38, and Fortune cited the acquisition of Amerigroup as a primary reason. It’s not always a wonderful experience for the smaller company when it is acquired by a larger one, though. How did that go?

WellPoint had an enterprise PMO with 1200 project managers … we had 20. I thought: “We’re dead.”

I told my staff, just be excellent, and you’ll land where you’re supposed to land. Thankfully, they allowed us to influence and shape the rest of the organization. Two years later, they are looking at us for a model for a new Enterprise PMO.

The government space has a 1%-3% profit margin, so you can’t afford not to have excellent management of new contracts and initiatives. WellPoint bought us for our expertise in that area.

Q: Are there any PMO staff members or other WellPoint employees or stakeholders you’d particularly like to showcase or thank?

We put a very strong emphasis on “team” in our work so it would be very difficult to single out particular individuals.  In our model, it truly does involve a “village” of collaborators.  As far as folks to thank for our success and for enabling and supporting us to achieve becoming a finalist for this award, I would have to point to the former executive leadership team from Amerigroup who had the fortitude and willingness to invest in building the PMO structure and process.  There were lean start up years when it would have been very easy to cut the overhead of the PMO but our leadership team stuck with us and invested significantly in what has evolved into an industry leading strategic execution core competency for our company.

Q: If you could pinpoint one area of the PMO’s work that you think is a best practice for other PMOs, particularly in healthcare, what would that be?

This is a tough question to answer, selecting just one.  I would say that a key component to the success we have achieved is the combination of using senior IMO program management talent during the initiation and planning phase to ensure solid requirements gathering, schedule development and risk management along with deep subject matter experts embedded within the functional departments who are fully dedicated to our portfolio execution.  This combination helped us develop what has evolved into a truly scalable, repeatable core competency for our company.  It goes back to the robust executive support we had from the beginning that allowed us to make such a significant investment in PMO excellence.

The PMO of the Year, founded by PM Solutions in 2006, is now part of the Project Management Institute’s prestigious awards program. Learn more about this year's finalists and the history of the award and follow the PM Network coverage, beginning with the Dec. 2014 issue. Stay tuned! Tomorrow and Thursday, we'll interview the leaders of the finalist PMOs, Central Bank of the Dominican Republic and DTE Energy.


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2 Comments on Interview:  2014 PMO of the Year: WellPoint Government Business Division Implementation Management

Kevin Cooke PMP says:

Excellent insights and timing ! Always a challenge to align & excel in the perfect storm of ACA changes. Thank you PM Solutions & Congratulations to the PMO Wellpoint Winners !

Posted on November 19, 2014 at 3:50 pm

Sean Thronton says:

Interesting article i also enjoy reading this blog on project management tips and events.

Posted on February 20, 2015 at 11:45 am

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