HBF’s full-scale, whole-of-business transformation program will be given a late-stage boost through the adoption of a ‘dark launch’ capability, enabling the health insurer’s tech team to safely launch new digital assets in a production environment without the “stress of customers interfacing” with them.

Speaking at FST Media’s Future of Insurance 2023 conference, HBF’s chief information and transformation officer Sanjeev Gupta noted that the health insurer’s planned late-2023 deployment of a ‘dark launch’ capability – part of the company’s multi-year, wholesale, and scaled agile-backed tech transformation program – will provide its team with a “full dress rehearsal” for software production assets in a live launch environment.

“It gives you a runway for teams to get used to those assets and get those ceremonies, [using] a scaled agile model to work with those assets before you go live,” Gupta, who was appointed HBF’s CIO/CTO last year, said during his featured keynote.

As part of developing the dark launch capability, Gupta added, HBF’s development team was also able to “decouple” core elements of the production agenda from the wholesale transformation program. For instance, the health insurer early last year opted to separate its lagging claims systems overhaul from the rest of its transformation agenda, enabling the wider program to still progress “at pace”.

“People get some wins on the board, rather than moving everything at the slowest of the links in your chain,” Gupta said.

“This is more of a risk-based approach we’ve taken… to minimise potential disruption”.

The dark launch strategy was unveiled mid-way through the health insurer’s “ground-up” technology transformation program, which is now in the final stages of deployment after the first phase of the rollout in early 2020.

At the front-end, this program included the launch of a new MyHBF app, website and member portal (rolled out in early 2020, and each backed by Sitecore), a CRM or “staff console” platform (dubbed ‘Eve’ and leveraging Salesforce CRM system replacing  Oracle’s Siebel), a marketing automation platform (backed by Salesforce), and a core insurance platform (largely backed by software developer Civica, with an additional fraud detection capability from Hibis) – which, Gupta confirmed, connects the insurer’s policy and claims management processes “across our member, provider and employee journeys”.

The overhaul of the core insurance platform resulted in additional headaches for the tech team, Gupta noted. The initial chosen solution, built by an overseas provider and requiring localisation for the Australian market, was halted due to the onset of Covid lockdowns.

With significant time and resources already invested, the decision to scrap the first chosen core insurance platform “wasn’t taken lightly”, Gupta said. However, by mid-2021, the team had made the difficult call to “pivot and change our entire strategy”.

At the back-end, HBF adopted an entirely new data management platform (utilising AWS and Snowflake technologies, and deployed in late 2021) and data lake, as well as delivering wholesale migration of assets and native builds in AWS public cloud (delivered in early 2021).

According to Gupta, the WA-based health insurer, Australia’s fifth largest, hopes to complete “all layers” of its transformation program by the end of 2023.

A rocket from the ‘back of the peloton’

HBF’s decision in mid-2019 to go ‘all in’ on a wholesale technology transformation program – which at the same time included a business-wide adoption of a scaled agile – was made in recognition of its lagging technology capability, particularly compared to its competitors.

“Five years ago, we recognised we’d fallen off the back of the peloton. When you’re at the back, you have no choice – you have to put the pedal to the metal and keep turning.”

Many of HBF’s pre-transformation systems were “close to 20 years old [and] mainframe-based”, according to Gupta, with COBOL programmers effectively upholding the legacy stack.

“We realised that trying to catch up meant introducing a whole lot of capabilities, mostly technology-led within the organisation, in order to get back into the peloton and level the playing field.”

“Every element of the technology layer – the customer-facing layer, the middle layer, the whole core insurance platform itself and support services – [we decided to] change and put the whole lot in public cloud.”

The “spaghettified” make-up of HBF’s existing technology stack presented a foreboding challenge for the tech team, built up largely as a consequence of it historically being concentrated in its home market of WA. This spurred the company’s decision to pursue its tech transformation wholesale rather than a less resource-intensive piecemeal approach.

“Till about 10 years ago, we had 80 per cent of the market share in Western Australia [HBF’s home base],” Gupta said.

“When you have such dominant market share in such a concentrated geography, you start customising to smaller and smaller cohorts, almost to an audience of one.”

“What that does is it creates complexity in processes and systems, and it makes it so hard to untangle. When you try to innovate or launch new products, all that spaghetti becomes really complex.”

“We had to make a decision to unravel all of that and transform.”

The ‘engine’ of continuous improvement

The agile methodology, like for many tech-forward FSIs today, was core to HBF’s transformation program. HBF, however, was conscious to ensure agile thinking would extend beyond the initial remit of the tech transformation program, moving to bake this framework into the operations of the business as a whole.

Beyond the adoption of the tried-and-tested asset-based ‘squads’ model for its tech teams – split across Digital, CRM, Core systems, Integration and Cloud squads – Gupta’s team actively pursued a “full-blown” (that is, organisation-wide) scaled agile operating framework.

The challenge, according to Gupta, was to embed this way of working as a “natural BAU” (business as usual) evolution of technology and corporate teams, ensuring consistent, business-wide improvements in systems and processes once all “enabling technologies” (achieved through the 2020-23 transformation) were in place.

HBF assembled its squads into three main tribes designed to drive the core priorities of the transformation program – a Digital Tribe, a Member Connect, and a Product and Claims Tribe.

An additional ‘Inception’ squad serves to determine the feasibility of blue-sky initiatives, and, if viable, delegate these initiatives to a specific tribe to develop.

Each of these squads is overseen by a Value Orchestration Office, effectively a “transformation program office” designed to translate board and strategy team objectives into tangible outcomes.

Crucially, these squads are “semi-sticky”, Gupta said, meaning they can quickly adapt to changing business or technology priorities.

“That allows us to easily shift resources. For example, for one quarter we may decide we want to focus on claims automation. In the next quarter, we may decide that acquisition is where we want to focus.

“We can move people around within those chapters to allocate resources where possible and really deliver on those objectives and key results [OKRs] that are linked to the organisation strategy.”

Lessons from the front-line

For Gupta, the choice to commit to wholesale transformation is not one to be taken lightly.

“Often people say they want transformation, but is that really the case? [Transformation] requires an immense amount of alignment and resilience to stay the course for such a long period of time.

“And that’s especially so if you’re including core transformation for three-and-a-half years and running hard at it.”

Gupta concluded by offering six key lessons and challenges learned from HBF’s own transformation journey.

1. Ambition and scope: Gupta hinted that HBF’s tech team may have, at least in the early stages of transformation, “bitten off more than it could chew”.

“We’re doing four transformations in one – front-end, the customer-facing assets, a core platforms transformation, and putting all that in public cloud, a journey we’re taking to understand and mature our own capability in public cloud.

“And if that wasn’t enough, we’re changing our ways of working as well.” This, he stressed, requires a significant commitment and buy-in from decision-makers across the business.

2. Timeframes and budgets: Costs will unexpectedly spiral, and core priorities can get derailed at any time, Gupta warned.

“It takes twice as long and costs twice as much as you think”.

3. Agile ways of working should not mean ‘no planning’: “We are working in those quarters, but we’re also keeping an eye on the ultimate outcome and working backwards from there. There is always a plan.”

4. Who to work with: Utilising various SaaS platforms and cloud storage services from upwards of 20 service providers, HBF maintains an intricate patchwork of vendor relationships.

“When choosing partners, you need to make sure the relationship between the partners and between the organisation is well defined and you have the mechanisms to work through that.”

5. It’s ok to call time out: Alluding to the HBF’s decision to revise its core insurance platform, as well as the move to decouple sluggish claims system overhaul from the rest of the transformation agenda, Gupta said: “We made a couple of bold decisions. When you are halfway through your journey and need to rip out everything you’ve built and replace it.

“That decision was not taken lightly and is not for the faint-hearted.”

6. Agile ways of working is difficult: Agile programs can often struggle to take flight due to issues around strategic, cross-business alignment, the understanding of accountabilities, and delivery ownership, Gupta said.

He warned not to let perfection be the enemy of the good, with the temptation of those on the business end unacquainted with transformation to “always seek perfection”.

“Knowing that transformation is not a world of perfection, you need to make compromises. Working in that environment, everyone finding religion, and having that belief that it’s hard work from a change perspective and from an adoption perspective.

“If there’s one thing you must focus on, make it this!”