- Research & Insights
- About Us
- Become a client
Global health services company Cigna is setting the pace for automation use at a strategic scale—accelerating value realization from $2 million to more than $100 million within a year.
To achieve this kind of traction with automation requires much more than simply signing a deal for new technology. When Andy Fanning arrived at Cigna to take up the post of Managing Director of the Office for Intelligent Automation and Business Transformation, he brought a distinct point of view about automation and work.
“The first thing you need is for everyone to realize that we are in the middle of the Fourth Industrial Revolution, and that means the way that work gets done is fundamentally changing,” said Fanning, whose former lives include stints at Genpact, Cognizant, and Wipro. By “everyone,” Fanning means from the top, down and the bottom, up.
And—in close alignment with the HFS OneOffice mindset in Exhibit 1—Fanning set out a broad and inclusive definition of the automation he seeks to scale:
“Automation: A holistic solution for digital business transformation, based on a suite of tools that includes workflow to orchestrate users, tasks, systems, and robots with a goal of reducing human effort and errors while improving customer and employee experience.”
Source: HFS Research, 2021
Automation means you can deliver reduced costs AND an improved experience. For example, automation can mean transactions get faster at a lower cost—improving the speed at which members get approvals. That AND moment changes the mindset, observed Fanning.
Research by HFS identified improving health consumer experience as the primary objective of healthcare transformation; we reported this in our POV Drive Healthcare Customer Experience with a OneOffice Mindset, published May 2021.
The second big change to contend with is the shift from a world in which work done by humans and work done by computers are separate processes.
“We are moving to a hybrid workforce—with learning machines that optimize, helping people make better decisions,” Fanning added.
Automation is now part of the workforce, and its arrival means we must think differently about everything we do, he explained.
Businesses have traditionally based hierarchies and rewards on how many people you manage. But a glance at the revenue per employee of companies such as Google reveals how much that tradition is changing. Does managing one bot that does the work of 50 people make the manager less valuable? Egos can be easily bruised—just one of the challenges of managing the organizational change required.
These are big conceptual changes to wrestle with. So, what tactical tools did Cigna deploy to transition from an organization where automation was a series of experiments into one in which automation is rapidly becoming native—and recognized as a strategic asset?
Cigna had already created an automation center of excellence (CoE) within the IT department with a remit of governance rather than activation. That led to multiple projects with multiple consultants executing automation in any way that the individual business units chose.
Fanning identified that if the CoE took on all the automation contracts, the enterprise could benefit from reduced fragmentation. With a focus on proving value to the board each quarter to release the next batch of investment, he selected the projects that would have the greatest impact.
Once Fanning selected projects, there was no pause for further approvals or access to budgets, significantly cutting time-to-value.
Cigna’s next challenge was to fuel the project pipeline. To make sure it was making the best choices in business process redesign, it needed more options.
“That’s when we began conducting a series of workshops with internal and external consulting partners,” says Fanning. The workshops started with willing participants.
“You can’t force this change at the beginning; you have to find and convince people this is the right way to go. You have to teach people about automation and remove the threat. Then you can generate a bunch of ideas,” he adds.
Cigna deployed its priority, to begin moving ideas into execution and build enterprise competency, to important effect – with the support of external experts. The team assessed for business value and viability and, crucially, because the CoE had centralized control of resources, it could build the winning ideas almost immediately.
Working with a premier consulting firm offered useful perspectives in goal setting, creating a playbook, and developing an efficiency maturity model.
Fanning’s team involved the finance controller from the start and at major milestones, ensuring a value framework that demonstrated the full impact of automation across the enterprise. The model has given confidence to business unit leaders with initial minimum viable business cases returning a simple but guaranteed 1:1 ROI.
The calculation sets a unit price on a piece of work and builds in that value as and when the project scales. So, when the project beats its 1:1 ROI and continues to deliver year after year, the realization of value is clear to all parties and for all time.
An important element of the Cigna value framework is the categorization of value drivers.
“You should write down the value drivers you associate with automation and rank them for importance in your enterprise,” says Fanning. The gold, silver, and bronze rankings his team applies helped it look beyond Opex for prioritization and expand the penetration of automation across Cigna.
Using the value framework, the company identified $87 million of gold and silver value (hard value for the enterprise) in a year, with more than $80 million in savings identified in the total cost of care for customer companies—those whose internal health plans Cigna administers.
Fanning says while Cigna now recognizes automation as a strategic imperative, the journey has some distance still to travel.
Competitors in the same industry are targeting as much as 50% in cost reductions from automation by 2024. Just over 31% of health plans said they were implementing process automation across the enterprise at scale in the HFS Pulse Survey in June 2021 (which engaged 801 global enterprises, 162 of which are from the healthcare industry).
Fanning recognizes his next leap is to go from $100 million of realized value to $1 billion. And that’s before unleashing the possibilities of value creation that macro-processes running across business units may offer.
Cigna has taken an important step toward connecting business and IT in critical transformation areas. Digital, data, and automation all now have a leader on the IT side and a leader on the business side working together on everything in a “two-in-the-box” model.
Once Cigna deploys technology to deliver automation, it remains a local business unit decision. Cigna uses Blue Prism mainly in the back office. It often deploys Pega for workflow and Robotic Desktop Automation (RDA), and it widely uses Automation Anywhere, too. Fanning says there is an increasing focus on low-code solutions to support citizen development.
Cigna’s approach to automation demonstrates there is a core structure and support required for successful scaling, demanding that: