Case Study: The Regence Group and Onyx Software

Blake Rohrbacher

Updated · May 10, 2002


The Regence Group is a company composed of four different health plans in four different states: Regence BlueCross BlueShield of Oregon, Regence BlueShield in Washington, Regence BlueCross BlueShield of Utah, and Regence BlueShield of Idaho. Regence has about three million members, served by over 6,000 employees in all four states, with combined revenue of more than $5.6 billion.

As can be imagined, the four plans have different ways of doing business, and one major hindrance to putting together a seamless business built around the customer is inconsistent processes. Each plan had separate customer databases and unique sales processes. One important task was enabling everyone to work together.


As with the rest of the healthcare industry, Regence was faced with a question: How could it use technology to improve business without losing the experience and trust inherent in proven systems and techniques? Knowing that the earlier it faced the question the better, Regence began an evaluation process of CRM vendors in mid-1999.

It would be fair to say that, at first, Regence wanted a solution but didn't know the precise problem. They knew they needed to start somewhere, but not exactly where. Meetings with numbers of CRM vendors helped open their eyes to the CRM universe and the multitude of possibilities.

Regence knew they needed an ecommerce strategy. They also wanted to deepen their understanding of their customer relationships and, by improving those relationships, increase their ability to serve customers.

As the evaluation moved forward, in early 2000, the first phase of the process took shape: sales force automation. Regence has a large sales force, but no single data source by which to manage and quantify the sales process. Sales operated with a mixture of number of stand-alone rating and proposals systems together with paper files and tracking systems. Since these processes and systems were not integrated, it was impossible to obtain a holistic view of any one sale without manually digging through a file folder stuffed with Post-Its. One estimate was that sales managers spent 20-30% of their time compiling reports due to the lack of an integrated sales information system. The initial phase of the CRM solution was to put in place a single sales system across all four Regence states to streamline sales process management.


By June of 2000, Regence had decided to choose Onyx as its vendor. There were several reasons for the choice. Onyx would be able to customize its solution to Regence's needs, rather than arrive with a set system and force client change. Onyx also practiced what it sold. They used their own product effectively, meeting with and identifying key decision makers in the various states and getting the right information to the right people. When key Regence players had questions, they were answered promptly, sometimes receiving responses within 10 minutes of sending Onyx an email.

Just as important was the effort displayed by Onyx's willingness to assist Regence with understanding the core issues and possible solutions. “We knew we needed something, but didn't know what, and Onyx helped us clarify that,” said Barry Schwartz, a marketing VP at Regence BlueCross BlueShield of Oregon. Onyx spent the time to understand Regence's business and provided key input, identifying issues plan by plan and “holding their hands” through each step.


The contract with Onyx was signed in September 2000, and implementation began in November. The solution was implemented in all four states. With only a few minor hitches, the software implementation proceeded apace and was up in July 2001 in all states. Regence chose a server-based application so that as the solution was rolled out to outside brokers and agents, implementation would be smooth.

Although the technological portion of the implementation was relatively problem free, the human side was much more troublesome. Regence had four health plans in four states with four different methods of approaching customers, understanding the sales cycle, managing the sales process, and reporting. The new system would be a change for everyone, both because of the move from a manual to an automated system and because it impacted internal sales process management.

Regence created a cross-functional group to develop a single process, keeping best practices from each state where possible, but working towards an ideal system. Once this team agreed upon the crucial steps in the sales process, it had to decide which data were necessary and which to collect.

After the system was in place, training began. “The initial training was the easiest phase,” according to Schwartz. Training started with 800 employees receiving two days of in-house training each. “This was the first giant step,” said Scott DeNies, project manager of the Onyx implementation.

After training, adoption became the biggest hurdle. Initial perceptions of the new system as being additional work hurt adoption, as did reluctance to let go of old paper methods. The continued existence of old systems did not force employees to make a change. Senior-level buy-in helped give credence to the system, but the hands-on employees had the greatest trouble abandoning tried-and-true paper processes. Also, a typical Catch-22 situation arose: the greatest benefits of the system will come through consistent use, but employees don't use it consistently until they see the benefits of the system.

Methods used to increase adoption included training employees to also be trainers, utilizing those who use the system to show others how to use it; putting skeptics in the role of evangelists; and creating new adoption strategies from the testing of current adoption strategies. Still, amidst the struggle, DeNies sees the positive, saying, “I always thought it would take a year to get good adoption.”


True quantitative results are still in the offing. Success has been characterized as “bright spots here and there” and a positive feeling about “what it can bring us.” The implementation has been up for nine months, and adoption is beginning to reach higher levels. Consistent use is still an issue, according to DeNies, “The sales folks who use it all the time are getting the value; those who don't, don't.”

What has shown as far as results is hard to put in a spreadsheet, but much more powerful and lasting. First, the CRM system has forced all four plans to come to a single unified sales process and has resulted in a common customer database with internal employee access. The power of consistent effort and shared information will shave years off the process of consolidating the four states under common goals.

Just as important for Regence has been the crucial learning about how to create a customer-centric system and the necessary focus on key customer touchpoints. Hindsight being 20/20, Regence could have planned better from the outset with a clearer vision of how customer needs intersect with technology, but regardless, Regence has come to realizations that many companies never do. Through the CRM system, Regence “backed into” a deeper knowledge of customer needs and customer relationships. While the cost savings will come eventually, the knowledge gained is the kind that changes companies forever.


One key lesson is that results are too important to be confined to the quantitative. Even if Regence's CRM system never eventuates in numeric benefits, the knowledge and insight gained into customer needs can sustain better business methods forever.

Regence made the choice in this first phase of CRM implementation to bear the learning costs internally. The thinking was to “do it to ourselves first, so we'll know what we face when we go to the customers,” says DeNies. This approach puts the customer first by putting them second. Rather than forcing customers to bear the brunt of the growing pains, Regence used the experience as an opportunity to learn and prepare for better customer service later.

One surprising fact during the implementation process was the resistance to change. It is typical and tempting to focus on the cost of the application, but “the biggest cost is really getting the buy-in and changing the culture; you can spend a whole lot of money on that part,” says Schwartz. Companies must plan diligently for “change management,” according to DeNies, “Don't expect a CRM system to change things overnight. It will take two to three years to get where you need to be. If you don't have the stomach for that kind of pain, don't do it.” It is easy for people on the back end to change systems, as they are accustomed to dealing with systems and adjust easily to new ones. Sales people and marketers, people who deal less with systems and more with variability always have the hardest time. Don't underestimate the resistance to change hidden in your organization. The perception of additional work and the work required to see initial rewards will act as high hurdles for adoption. Anticipate this. Schwartz suggests that vendors focus on adoption in their proposals. “That would be the real killer app,” he says.

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