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WellPoint Strikes Gold with PeopleSoft HRMS Collaborative Applications

July 22, 2001
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H    ealthcare companies constantly balance quality of serviceagainst tremendous pressure to reduce costs as they strive for a better bottomline. As Fortune Magazine's Most Admired Healthcare Company for threeyears in a row, WellPoint is no exception. A PeopleSoft HRMS customer since1998, WellPoint recently began to look for ways to increase the cost-effectivenessof its HR department. "Our administrative costs go up because of inflation,rising wages, and rising energy prices," says Chuck Moore, vice presidentof HRIS and administration at WellPoint. "But we in HR were given a flatbudget this year. That means we actually have to work smarter if we're goingto maintain our effectiveness."

    In an effort to work smarter, WellPoint has successfullyupgraded to PeopleSoft 8 HRMS, including the new self-service collaborativeapplications. "The goal is to virtually eliminate our paper trail,"says Moore. "First and foremost, we'll be reducing costs. But we'll alsofree up our HR staff to spend more time on strategic activities such as reducingturnover and improving professional development."

Collaborative Applications Drive Savings
    With the help of PeopleSoft Consulting, WellPoint'sPeopleSoft 8 upgrade took about five months. WellPoint had initially installedPeopleSoft 7 in 1998, but soon upgraded to PeopleSoft 7.5 and installed a callcenter.

    Using PeopleSoft 8 collaborative applications, WellPointwill achieve hard-dollar savings by web-enabling the open enrollment processfor associates. "We outsourced web enrollment this year. But next year,everyone will do it on the web through PeopleSoft eBenefits, saving us $300,000."Moore says. "Even after you adjust for taxes, inflation, and discounts,we'll be saving about $800,000 over the next five years for open enrollmentalone."

    Pay stubs are another area in which WellPoint anticipatesa quick return on investment. "We're spending $225,000 a year on checkstub printing and distribution," says Moore. "With PeopleSoft ePay,we can make that information available to everyone online at virtually no cost."

    Moore admits it's difficult to calculate hard-dollarsavings for some self-service transactions. "But the big selling pointsfor self-service are timeliness, data accuracy, and empowering people to makedecisions," he says. "With web self-service, processing changes willbe immediate, with no delays or paperwork."

Focusing on Strategy
    With a lighter administrative workload, WellPoint'sHR department is focusing on more strategic activities. One of WellPoint's majorinitiatives is to reduce turnover in a tight labor market, a task Moore believeswill be much easier with PeopleSoft. "PeopleSoft enables us to slice anddice information by supervisors and departments, and to provide all kinds ofreports to management," says Moore. "We can produce the details onwho quit, who went from one department to another, and why things changed fromquarter to quarter. We've already reduced turnover from 22 percent to 15 percentusing PeopleSoft 7.5. We expect the trend to continue with PeopleSoft 8."

    A key part of WellPoint's retention strategy is itsall-out emphasis on developing and promoting associates. WellPoint requiresthat a certain percentage of positions in each department be filled from within,and believes that self-service delivered through PeopleSoft eDevelopment willallow the organization to improve upon its ability to manage and develop associates."The self-service functionality delivered through PeopleSoft eDevelopmentwill allow us to better manage the associate skill sets we have, and the skillswe'll need people to develop in the future," says J. Thomas Van Berkem,senior vice president of HR at WellPoint.

The New Gold Standard
    Van Berkem sees PeopleSoft 8 as a tool that will empowerhis department. "It's critical that HR dedicate its resources toward contributingto WellPoint's growth and reinforcing the department's strategic partnershipwith company leaders," he says. "To accomplish this, we must minimizethe resources spent on transactional activities. We'll use PeopleSoft's self-servicecapabilities to allocate our resources appropriately."

    The improvements in allocating resources have alreadybegun. "When we selected PeopleSoft in 1997, we had 72 HR field staff for9,000 associates," says Van Berkem. "Today we have 42 field stafffor 11,500 associates. With our latest merger, we're adding another 3,500 associates,and it's critical that we utilize the efficiencies of PeopleSoft 8."

    How would Moore summarize the difference PeopleSofthas made at WellPoint? "PeopleSoft HRMS feeds our phone system directory,email systems, financial systems, executive information system, and org charts,"says Moore. "When an associate changes an address or phone number in thePeopleSoft database, it gets changed everywhere. PeopleSoft feeds so many systemsfor us that we've made it our gold standard for employee data."


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    lead@peoplesoft.com

The Customer
    WellPoint is one of America's largest publicly tradedhealthcare companies, serving the needs of 9.7 million medical members and 40million specialty members nationwide. With headquarters in Thousand Oaks, California,the WellPoint family of companies employs approximately 15,000 associates. WellPointserves customers through Blue Cross of California, Blue Cross Blue Shield ofGeorgia, and UNICARE.

PeopleSoft Products:

  • Human Resources
  • Benefits Administration
  • Payroll for North America
  • eBenefits
  • eDevelopment
  • eProfile
  • eProfile Manager Desktop
  • eCompensation
  • eCompensation ManagerDesktop
  • ePay
  • eRecruit

Computing Environment:

  • Hardware: HP
  • Database: Sybase

Implementation Services:

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