Vision Service Plan MIS 279 Acid Test February 24, 2006

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Vision Service PlanMIS 279 Acid TestFebruary
24, 2006
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About VSP

• Founded in 1955 in Oakland, CA
• A Not-For-Profit Company
• Headquartered in Rancho Cordova, CA
• 25 Regional Offices
• 1,900 employees
• 2.2 billion gross revenue in 2005
• J.D. Power and Associates Highest in Overall
  Member Satisfaction Among National Vision Plans
  for 2005 and 2006
• Fortune Magazines 100 Best Companies to Work
  For seven consecutive years - ranked 7 for 2006
• Sight for Students provides free exams and
  glasses to 50,000 low-income, uninsured children
  each year

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Products and Services

• VSP provides eye care benefits to over 44
  million people across the United States and
  Puerto Rico. Those benefits are delivered by a
  network of 23,000 optometrists and
  ophthalmologists. Insurance products are sold to
  commercial companies, government entities and
  labor organizations. Traditionally, most of the
  companys revenue has comes from large business
  and governmental organizations. For the last
  several years, the small business marketplace has
  been expanding. Another relatively recent trend
  is the expansion of Flex or cafeteria style
  plans. With a Flex plan, the consumer makes a
  choice of whether to purchase vision insurance
  rather than simply getting it as part of their
  insurance coverage.
• The consumer typically pays for most or all of
  the benefit under this plan. Most of VSPs new
  business is now sold under a Flex arrangement.
• VSP provides the best claims processing and
  customer service available in the industry. The
  Call Center has won several national and
  international awards for superior service. Online
  self-service is offered to all of VSPs publics.
  Well over 95 of the claims are submitted
  electronically and directly priced by the
  automated systems.
• VSP also owns a eyewear frame company (Altair)
  and operates two optical laboratories. VSP
  network doctors may choose to use frames from
  Altair or any other frame company. The doctors
  may also choose to use VSPs labs or one of the
  independent labs in the VSP network to fit those
  frames with lenses.
• Eyefinity, a wholly owned subsidiary of VSP,
  provides electronic claims submission, material
  purchasing and educational services to both VSP
  network doctors and non-VSP doctors.

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Our Publics
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Marketing Strategy

• VSP's marketing strategy consists of
• Developing and delivering the highest-value
  products and services to our clients, members and
  doctors.
• Executing programs that build awareness of the
  importance of eye health for everyone and VSP as
  having the highest service and customer value
  through the best eye care delivery channels.
• In addition, VSP continues to work on
  technological enhancements to continuously
  streamline processes for all of our customers.

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Competitive Environment

• The mission of VSP is to support private
  practice eye care. This business model propelled
  double digit growth for VSP during the 80s and
  90s. VSP remains the market leader in the vision
  care industry, routinely winning more business
  than all of its competitors.
• In the last several years, growth has slowed to
  single digits. This is primarily due to two
  factors. The first relates to the maturing of the
  vision care market. Vision care is routinely
  provided by most, particularly large, companies
  today. Growth opportunities are more likely to be
  found in middle to small businesses.
• The second factor relates to the rise of retail
  chains. VSP is facing more challenges from retail
  establishments such as Lenscrafters and Wal-Mart
  than was the case in the past. VSP offers the
  highest quality service and product, but not the
  least costly. Retail chains have made some
  in-roads in the marketplace by offering lower
  cost options. Some of VSPs competitors have also
  been able to offer their customers the choice of
  private practice or retail. VSP only offers
  private practice, the highest quality delivery
  model.

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VSP Organization Chart
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Information Technology Division

• Mission Statement
• Creating Business Solutions Through Productive
  Partnerships
• Division Goals
• FOCUS
• Ensure that VSP only invests in technology that
  drives clear, competitive impact, strengthens
  our strategic goals and lowers delivered costs of
  our program
• PARTNERSHIP
• Maintain strong working relationships within IT
  and with all of our Business Partners
• CONTRIBUTION
• Deliver solutions that meet our Business
  Partner needs in a way that is cost effective and
  timely
• IMPROVEMENT
• Improve our processes, tools, and skills to
  maximize efficiency and provide a high level of
  service to our Business Partners

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IT Organization Chart
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Information Technology

• Applications - Focused on providing the
  technology to our publics that will promote the
  greatest use of self-service tools.
• Architecture - Dedicated to achieving future
  technology investments.
• Technology Services and Support - Focused on the
  complex infrastructure to not only keep it
  running, but to make it run more efficiently.
  This department must stay in tune with
  significant business initiatives to ensure the
  infrastructure is ready to support new
  functionality and increased capacity.
• Quality, Support and Improvement - Dedicated to
  improvement, improvement of management skills,
  staff skills, and business partner relationships.

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Information Technology Objectives12-18 Months

• Begin the transition to Services Oriented
  Architecture.
• Complete implementation of CRM system for Sales
  and Client Services (Siebel).
• Re-engineer Product supporting systems to
  increase flexibility, simplify product
  communications to our publics, reduce cost of
  maintenance and bring products to market faster.
• Build or buy a new Product Rating Engine to
  replace the labor intensive systems now in use.
• Implement a new Requirements Methodology
  including a tool to store requirements and
  support their reuse.
• Implement a new quality assurance process
  including a test automation tool.
• Develop and implement a Configuration Management
  capability for hardware and software.
• Upgrade desktops and laptops to Windows XP.
• Move to an enterprise-wide voice infrastructure,
  including speech recognition and integrated voice
  mail.
• Complete implementation of a roles-based security
  administration model using LDAP.
• Improve our business intelligence capability by
  re-architecting our information management
  structures and implementing an OLAP tool.
• Establish an enterprise-wide Data Dictionary.
• Re-design customer service desktop software to
  eliminate all green screens and use the new
  architecture.
• Pilot an automated Business Process Management
  system.
• Upgrade our Document Management capability.

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Critical Business Processes Supported

• Process Claims
• Manage Reimbursements
• Maintain Providers
• Maintain Labs
• Maintain Clients
• Prospect Clients
• Maintain Membership
• Financial Management
• Maintain Product
• Reporting
• Service Customers

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IT Application Development Deployment
Methodology

• We deploy a formal SDLC methodology and Project
  Management Methodology.
• The Requirements Methodology has recently been
  updated to include use cases and a tool
  (Caliber) has been obtained to store requirements
  information for reuse.
• We have recently begun experimenting with an
  agile project approach (Scrum), a team-based
  effort that requires deliverables every 30 days.
  So far, results have been promising.

IT Technology Hardware/Software Architecture

• VSPs legacy systems were developed in COBOL and
  CICS and run on a large IBM Mainframe.
• The newer applications are developed in JAVA and
  run primarily on Wintel servers, some run on Sun
  servers.
• The desktop environment is predominately
  Microsoft based.
• The standard DBMS is DB2. SQL Server, Oracle and
  Access are also deployed.
• Cisco is the standard network vendor.
• Our new systems are being developed in JAVA using
  an IBM platform.

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Information Technology Division Challenges

• Change management is a particular challenge. The
  move to the new architecture requires
  re-tooling the IT staff with new skills.
• The architecture will need to be put in place
  without disrupting business support being
  provided by our current legacy systems.
• The architecture program is an ambitious
  undertaking expected to take 5 -7 years to
  complete. It is predicated on developing more
  efficient deployment and implementation
  strategies.
• Consultants are supplementing the IT staff. They
  will not be kept on to maintain the developed
  systems.
• The size of the IT staff is expecting to decline
  by 20 - 30 by the time the new architecture is
  in place.