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Blue Cross Finds the Perfect Prescription E-mail
Written by Jeff Reeder   
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Blue Cross Finds the Perfect Prescription
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MSP/VMS combo brings order to a complex organization who spend thirty-nine million dollars in IT contracts.

Picture the scene; more than 20 IT categories with complex responsibilities and 26 job families; all sorts of paperwork; a vendor-on-premise program that had turned cumbersome and non-competitive; ancillary groups setting up other ways of getting contractors internally; contractor churn from poor processes. In short, a management headache.

Healthcare insurer Blue Cross Blue Shield of South Carolina needed a prescription.

With 13,000 employees, multiple Federal contracts and an award-winning IT infrastructure, Blue Cross Blue Shield of South Carolina relies on nearly 400 IT contractors to support its internal IT professionals. This is about 25 percent of Blue Cross’ IT workforce.

That number hasn’t changed significantly since 2003, but the process certainly has. And with the implementation of a new system built around two partnerships, Blue Cross has found aspirin for its contingent process woes.

Blue Cross has saved money, but that is only one benefit of the change. Time-to-fill has been greatly reduced, retention has been boosted, the managers are happy and, even better, “We haven’t lost a bit of control,” says Lonnie Emard, director of staff resource management. “We are in the driver’s seat.”

Until a few years ago, Blue Cross worked with an onsite master vendor that either supplied contract workers itself or subcontracted for them. This vendor-on-premise service had worked well in the past but Emard said that relying on one firm to manage and supply contract staff had its limitations, including capturing key metrics of quality and timeliness.

“It was becoming evident that the VOP wasn’t capturing every [job] and so managers were setting up other ways internally,” Emard says. In addition, with the company requiring IT contractors across so many job categories, the insurer was finding that quality and speed were often lacking.

In 2003, Blue Cross decided to make a change.The company, with the help of a consultant, decided to redesign its contingent labor management processes to utilize one process for contingent IT workers of all skill sets, use its staff more efficiently, and maximize the department’s financial performance.

To streamline the process, Blue Cross chose managed services firm and vendor management system.

Here’s how it works: 140 IT managers use the VMS software services to send requests for talent to Managed services firm, which then uses VMS software to evaluate electronic bids from multiple staffing firms. Managed services firm has two people on site and Emard speaks with the account manager once a week.

For 2005, this workflow added up to nearly $39 million for contract help across 20 different job categories, including application development, desktop support, network management, telecommunications and Web application development.

Emard says that Managed services firm and VMS were selected for their industry-leading reputations and technologies and because they are “vendor neutral.” Emard believes it is important to use separate vendors for managing services and supplying contractors, something he learned from previous experience relying on one VOP.

In choosing Managed services firm, Emard partnered with a company that manages dozens of national and local tech staffing firms, and chooses contractors based on agreed-upon metrics with Blue Cross, including prices and skills. With vendors that only manage services and new, consistent processes for the procurement of contingent labor, the results are in and the metrics are impressive.   

Under its new system, Blue Cross has reduced average rates in targeted job classifications by 6 percent, resulting in savings of $750,000 in 2004 and $850,000 in 2005.

But perhaps more important given that this is IT, the new plan and process reduced time-to-fill from an average placement timing of 39.3 days in 2004 to an average of 22.3 days; and a customer review indicates a high level of satisfaction with the quality of service.

These last measurements are worth noting, because IT depends on program management and the strength of the project team. With shorter time-to-fill, projects can get started on time and don’t stall, and this obviously makes managers happy. 


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