Windsor Group’s strategic sourcing approach met stringent state regulations and positioned our client for competitive renewal.
For over 75 years, our client has been a pillar in the U.S. healthcare insurance industry, serving millions of Americans. These decades of service had led to a tangled web of legacy systems and complex processes, creating a heavy burden of technical debt.
Facing intense pressure to reduce waste and modernize, this industry leader needed to transform its IT operations without sacrificing the quality that defined them. They turned to Windsor Group to find a solution that would cut costs dramatically while meeting unique regulatory hurdles and preparing them for future growth.
The Challenge
On the surface, the IT function was a success. Customer satisfaction scores were consistently high, a clear sign of the team’s dedication to supporting a large and complex portfolio of IT platforms. However, leadership issued a formidable mandate: reduce operational costs by 20% or more while maintaining those high service levels.
The path to achieving this was full of challenges. Strict state and federal regulations, particularly those tied to the Affordable Care Act (PPACA), demanded constant updates and refreshes to their legacy IT systems. The biggest pressure point was looming on the calendar: the state’s healthcare insurance contract was going out for renewal. To compete and protect their position as the state’s largest provider, the company needed more than just lower costs; they needed a more agile, usage-based IT model that could adapt to changing demands and demonstrate superior efficiency to the state.
Engagement
Windsor Group partnered with the client’s leadership to conduct a thorough baseline assessment of their entire IT infrastructure, including their mainframes, servers, and help desk and desktop support. Our analysis revealed a refined picture. Their core operational costs were actually competitive with the external market. The high costs were linked to something else: a significant investment in project support services. These extra resources were the reason for their stellar customer satisfaction scores, but also a major driver of their budget.
We moved beyond a simple cost-cutting exercise. We helped the client evaluate targeted, alternative sourcing options for specific service areas where changes could yield savings. Initial models fell short, so we pivoted to a more comprehensive approach. We strategized collaboratively to find a solution that addressed the complete picture: the 20% cost reduction, the rigid regulatory constraints, and the urgent need for flexibility for the state contract renewal.
The Result
The outcome was a transformative solution tailored to the client’s unique political and operational needs. We facilitated a deal-based acquisition of their data center, including a full transfer of assets and technology.
This was a strategic partnership designed for their future. The solution kept critical IT resources and jobs within the state, satisfying regulatory and political concerns. It bundled ownership, management, and support for virtually everything—mainframes, servers, networks, security, and telephony—into a single, streamlined contract.
This move was a clear success, yielding a 20% reduction in operational expenses, a major enhancement to their disaster recovery preparedness, and a transition to a flexible, usage-based IT service delivery model. This positioned them perfectly to compete on the state contract renewal from a position of strength, efficiency, and modernized capability.
Insights
Modernizing IT is a common struggle for health insurers, where complex regulations can make transformation feel too risky. This shift cut costs, brought in new expertise, and updated their infrastructure for full compliance. They built a foundation that is ready to adapt and compete for the long term. To learn how Windsor Group can help your organization transform its IT operations, connect with us today at windzr.com/contact-us.