magazine | August 7, 2015
From Vendor to Valued Partner: The New Technology Purchasing Model.
“The days of selling generic products and services have gone by the wayside. Today, we’re talking about solutions, whether it’s social, mobile, cloud or analytics,” Boxer says. “The companies that do the best with our team are the ones that understand our business, know the competitive landscape, can articulate our strategy and then orient around those solutions that best help us advance our technology strategy and, more importantly, our business strategy.”
The relationship betweenCIOs and technology vendors has changed dramatically in recent years. In fact, atCigna, they are migrating away from the use of the word “vendor.” Boxer views the companies that sell technology solutions toCigna as “partners” in what he terms “the extended enterprise”— in every sense of the word.Cigna is working on a much more focused basis with fewer partners in the mix, and with that, the expectations have increased. Beyond just delivering a product or a service, he expects technology partners to function as thought leaders and trustedadvisors; helping to protect and enable the business as if they were sitting directly on his team.
While companies that try to sell to Cigna must be price-competitive, that’s only part of the value proposition. They must also understand what it takes to partner creatively within this new extended enterprise that requires collaboration with Cigna’s IT team, other companies and even competitors. “Because we’re not just going to buy on price, and we are in it for the long term, it’s about total value delivered,” he says.
Companies that understand that long-range vision tend to be the most successful. In leveraged application services, for example, where in the past Cigna used to work with many different partners—and chased the lowest price point—Boxer now works with fewer strategic partners and focuses on business value. “CIOs are thinking more like general managers, and they think about running IT organizations as a business more than they ever have been before:
‘How do we extend the value of IT beyond the provisioning of infrastructure and applications?’ They’re looking for their partners to step up and say, ‘How do we help you optimize the value you are delivering to the organization and how do we help you accelerate your business strategies?’ CIOs are also looking for those partners to share in the risk. If things go well, we’re willing to give them incentives. If things don’t go as well as expected, we expect them to share in the downside as well.”
Today’s CIO wears many hats. First, they need to be a business leader who drives the transformation of the business through innovation. Second, they must be a recruiter and champion of talent, responsible for motivating, retaining and attracting the best talent. Third, they are a product manager whose job is to advance the health care services and solutions Cigna offers to clients and customers. “And the last role is as a futurist and venture capitalist: How do we demonstrate and make real the innovation of our business and the art of the possible?” Boxer says. The role of CIO is made substantially less complex when there is a clear strategy and strong partnership with the business. “I am very fortunate that Cigna’s strategy and value proposition are clear and equally fortunate to have strong relationships with the global business leaders. It makes the process of selecting partners and technologies that much easier when there is universal alignment around the enterprise goals and objectives,” Boxer says.
For tech companies that want to sell to Cigna, it’s all about understanding Cigna’s challenges, its competition and how their particular solution is going to play into Cigna’s business strategy. Dr. Boxer is looking for companies that can “come and talk about how we can grow our retail capabilities, how we can create a more personalized customer experience, how we can use analytics to make people healthier, as opposed to, ‘We have this tool kit; what do you think about our tool kit?’ or, ‘We have this technology; what do you think about this technology?’”
“If they come in talking about their capabilities and their technologies in the context of how it’s going to advance our business and technology strategy, then they’ll have a much greater opportunity with us, and they’ll consistently do better with us,” Boxer says.
Greg Alexander, CEO of Sales Benchmark Index, says that Boxer’s enlightened approach to buying technology is happening all over the corporate landscape. “Understanding how your customers and potential customers make purchase decisions is priority number 1, 2 and 3 for the Chief Sales Officer of technology companies. Yet, I see many underinvest in doing this correctly, stopping at the basics such as creating buyer personas and buyer journey maps.”
Alexander continues: “Consider what Dr. Boxer expects from the sales teams calling on him. He is not interested in sales teams who understand their products. He wants sales teams who understand how their products will give him an advantage. If you are a head of sales, ask yourself if your sales team could clear this hurdle. By my estimate, less than 5 percent of technology vendors could.
“He wants technology vendor sales teams to understand who his competitors are, and help him win. Many large tech vendors have health care verticals, but how many of these sales teams understand Mark’s competitors well enough to help him win? Having consulted with many, I can tell you the answer is not many.”
“And these are just a few of the items Dr. Boxer highlights.Consider his recommendations on how to price your products to align with his interests, how to invest in pilot projects, and why he went from multiple vendors to fewer partners. CIOs are consolidating the IT spend, doing business with targeted firms. The message is, ‘Understand your buyer better than anyone else or lose,’ states Alexander.
Being a CIO requires a sophisticated skill set, particularly in the health care vertical, which has undergone dramatic changes on the regulatory, business and technology fronts.
“There are a few things that make the CIO role particularly complex, including the scope and scale of what we deal with, geographic dispersion, and rapidly changing market forces,” Boxer explains. “Accelerated change is happening within the health care vertical, and it’s a particularly complex, challenging set of market dynamics to manage.”
Dr. Boxer, who has a master’s in both Finance and Information Systems, as well as a Ph.D. in Global Public Health, knows his business inside out. He has spent his entire career working in technology, and most of that in the health care field. Before becoming Cigna’s CIO in 2011, he served as Group Vice President, Government Healthcare at Xerox Corp. and as Deputy Global Chief Information Officer, overseeing the development of all software products and information services for the company. Before that, he was part of Anthem’s executive leadership team, serving in various leadership roles including Chief Operations Officer, Chief Information Officer, President of Consumer Health Plans and Chief Strategy Officer.
This is also Boxer’s second stint at Cigna. Before Anthem, Boxer was Senior Vice President of Information Technology and eCommerce at Cigna Health Care and the Chief Information Officer at Healthsource, which was acquired by Cigna. Prior to that job, he spent 10 years with HP in consulting and outsourcing.
“I’ve been selling, providing, and buying products and services,” says Boxer. “I think that gives me a unique perspective because I’ve sat on both sides of the buying and selling table. So I understand the challenges and opportunities that those who are trying to call on CIOs face, but I also understand from the CIO perspective what it takes to be successful, connecting with CIOs and selling to CIOs.”
Given Boxer’s chock-full agenda, you’d think he might not accept a cold call or entertain pitches from smaller, unproven startups. But in the quest for continual innovation, he realizes the value that smaller companies can bring to the table. “They don’t get dismissed out of hand, or filtered out of the organization, because there’s a lot of innovation happening in smaller firms.”
Cigna has a vetting process, using the company’s connections in the venture capital world for filtering through the many hopefuls who’d like to meet with the CIO. “Many times these people are quite surprised that we invite them in,” he says. Boxer will often ask startups with innovative ideas to sponsor a pilot project before Cigna makes a longer-term commitment.
An example of a small IT vendor who had success selling its product to Dr. Boxer is MDLIVE. Based in Sunrise, Fla., they approached the global health services giant about adopting its telehealth program. Dr. Boxer went onto the company’s website and enrolled himself in the virtual service, which uses voice, video, email and mobile capabilities to connect patients with board-certified physicians for routine health issues.
“I wanted to experience it not as the Cigna CIO, but as Mark Boxer, the customer,” he says. “Do I do that for every single startup or partner we consider and evaluate? No. Did I feel there was enough opportunity in telehealth where I thought it was worthwhile? Absolutely.”
It wasn’t long before the CIO got the chance to put MDLIVE through its paces. Boxer came down with a minor illness during a business trip. Under normal circumstances he would have waited until he returned home or tried to find an urgent care clinic that could see him at the last minute. Instead, he saw this as an opportunity to test the promise of telehealth. Within less than 30 minutes, he had explained his symptoms to the doctor via a virtual office visit, who viewed his medical profile online and ordered a prescription for him from the pharmacy closest to his hotel.
“I had a fantastic experience with telehealth,” he stated, explaining why the global, Bloomfield, Connecticut-based Cigna ended up partnering with the small, five-year-old, venture-backed Florida company, to offer telehealth to its clients. “When you think about it as an alternative to standing in line at the urgent care clinic for medical concerns that are routine in nature, whether it’s the flu or an ear infection, the convenience and immediacy of telehealth makes it a viable option. Beyond the convenience factor, high-quality care is able to be delivered at a lower cost in comparison to either an emergency room or other setting. At the end of the day, it’s really about delivering the right care in the right setting at the right cost.”
Talking to hopeful startups with innovative technology approaches to improve patient care and convenience and optimize costs is all in a day’s work for Boxer, who controls a global information technology budget exceeding $1 billion a year — certainly one of the largest in the health care sector — and none too shabby for any industry. With these resources, he is able to invest in technologies that support Cigna’s global strategy of improving the health, well-being and sense of security of their customers. This includes identifying innovative solutions that help Cigna’s customers navigate the health care industry, introducing new approaches for better managing chronic conditions, and implementing new approaches for protecting two of Cigna’s most important assets — its people and its data.
“I have responsibility for the technology across all market segments and geographies,” explains Boxer. That includes everything from desktop services to architecture and infrastructure, as well as all the applications and supporting technologies. “Whether they’re developed directly by Cigna or provisioned by our partners, I have direct accountability and oversee the delivery. I take that responsibility seriously and hold our partners to a demanding standard, no matter what their size or state of maturity.”
After MDLIVE came knocking at Cigna’s door, the team at Cigna initiated an extensive due diligence process that’s used for evaluating innovation partners.
“The company did a few things right when they approached us,” Boxer says. “They approached us understanding where the solution fit and where it didn’t fit. So they talked about how their model works and where it should be applied, but they also said how it shouldn’t be applied. They understood the sweet spot for their solution.”
Secondly, says Boxer, “they had a business model that was friendly to our business model, so that it integrated seamlessly into our business processes. We in IT partnered with our product development and care delivery organization, and collectively we managed a rigorous assessment process that considered the customer experience.”
At the time the deal with Cigna was announced, in May 2013, Randy Parker, CEO of MDLIVE, said in a statement that his company and Cigna had a “closely shared vision for bringing the best technology to bear” to provide consumers with personalized and accessible service.
Also significant to Boxer is that the company has a strong management team and strong backers, including John Sculley, the former CEO of Apple.
But perhaps equally significant was the fact that MDLIVE offered to try some pilots with Cigna “to prove themselves out on their dime to demonstrate the value to us and, most importantly, the value to our customers,” Boxer explains.
As a CIO, he only sees more changes ahead for his own industry and the evolving extended enterprise — changes that all would-be partners should keep in mind as they think about knocking on a CIO’s door. “The lines are beginning to blur between business process sales and technology sales, and I think the partners that orient around that quickly are going to have a leg up — whether it’s around capabilities for customer relationship management, or around capabilities for a personalized experience — that’s going to be important.”
Understanding the importance of omni-channel solutions is also a requisite, especially for vendors that want to serve the quickly changing health care market.
“The last dimension is innovation, those companies that proactively come to us with capabilities because they understand where our business is going, and that have things to offer us that others have not offered us,” says Boxer. “They will have a leg up too.”
In Boxer’s Own Words…
Q: What’s the most challenging part of your job as CIO?
A: The absolute pace of change, the challenge for talent and the “new retail nature” of health care. The cycles times are shortening, and every single day we’ve got to think about how we add more value for our business partners, but more importantly how do we create an outstanding and relevant customer experience.
I always tell my team we need to think about ourselves, as one option among others for our business partners, and why would they choose us as their technology provider of choice. So we ourselves have to be customer-centric within our organization, and with each of our business partners.
We have to deliver solutions faster, less expensively, and we’ve go to make sure we get them right from the start — and we’ve got to proactively bring in innovation to help them advance their business strategies. Our cycle times are shortening, competitive pressures are growing, and the cost pressures are increasing. Again, if you think about the dynamics of change in health care, let alone the dynamics of change in technology, the forces are moving fast, and that means we have to step up our game and have the absolute best talent.
Q: What’s your typical day like?
A: I spend a lot of time thinking about talent and people. Really, we only have two assets as a company: 1) we have our information and 2) we have our people.
I also spend a lot of time with clients. I think it’s hard as a CIO to understand challenges unless you’re actually out there on the front lines understanding the issues our customers and our clients face every day. That also provides grist for innovation and helps us stay grounded in thinking about the right solutions.
We love to do collaborative innovation with our clients. I can think of many examples where we’ve done innovation with our clients based on dialogues I’ve had with them. For example, we created a virtual physical therapy tool, we created an early stage mobile diabetes app, we gamified health risks assessments, and we also created a fitness game for a client to help incentivize employees to be more active — the concept for that that came out of time I spent with clients and customers.
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