The business-enabling transformation of Southern Cross

The Southern Cross Health Society is New Zealand’s largest non-public funder of elective healthcare services, with a 61 percent share of New Zealand’s private health insurance market.

The not-for-profit Friendly Society is operated solely for the benefit of its 815,000 members. In the 2014 financial year, Southern Cross processed 2.9 million claims, paying $695 million for elective healthcare services. This included more than 155,000 surgical operations, 370,000 specialist consultations and 784,000 GP visits.

The Challenge

Healthcare is a complex sector facing multiple pressures, such as an ageing population, new and expensive technologies and growing expectations around quality, service and treatment options.

Southern Cross is aware that to keep pace with the amount of strategic change constantly required, their infrastructure and software portfolio must also remain streamlined, efficient and compatible.

Business changes over past decades had left Southern Cross with a complex mix of IT environments. Modification was required and, with that, a strong outsourcing partner that could provide infrastructure surety, synergies for a shared service model and the ability to provide a cohesive delivery service.

The Solution

Plans for such a comprehensive IT group consolidation meant that Southern Cross looked for an experienced partner to operate IT services under defined, flexible Service Level Agreements (SLAs), with a clear focus on business and service outcomes.

After a rigorous selection process in 2003, Datacom was selected for its breadth and depth in IT and infrastructure services, and for its flexibility and cultural alignment. With contract and commercial finalisations still underway, Datacom showed its pedigree and commitment to Southern Cross by having its team present by early 2004.

While technology was viewed as a strategic enabler in the transformation cycle, the real key to success was establishing systems so the business could focus on better member outcomes. This 10-year tenure has seen Datacom cement its relationship with Southern Cross through a significant track record of service delivery of complex programs.

Time has not stood still as the society’s business has continued to evolve successfully with new business initiatives creating further opportunities for Datacom to show its worth as a trusted strategic partner.

“We work in a constant cycle of change and over the decade there has developed a close fit between our organisations, culturally we are really closely aligned. Datacom are proactive in ensuring that we have an IT environment that makes us proud.”

April Walker - Head of Information Systems and Business Change, Southern Cross Health Society

The Results

  • A 2012 formal audit on ITIL best practices and industry standards on the Datacom outsourcing agreement had zero audit comments
  • An effective 25% reduction in PC and 34% reduction in server costs over the past five years due to economies of scale offered by Datacom and the accepted support volumes
  • The formal benchmarking of the then eight-year-old outsourcing engagement revealed an overall 6% price benefit on the lowest benchmark, while highlighting a strong and positive relationship
  • Unsurpassed stability in our Southern Cross facing delivery team, with a median staff retention rate of 5.5 years and Gallup staff satisfaction scores well above four (on a scale of 1-5)

The Partnership

By building a long-term relationship with Datacom, Southern Cross Health Society has been able to focus on delivering business-enabling transformation. With a highly open and collaborative engagement, Datacom has maintained a consistent team, which is focused on delivering services to Southern Cross.