Express Scripts CIO Gary Wimberly talks about his approach to vendor management and having a few large vendors as trusted strategic partners.
By Peter High
Gary Wimberly is the CIO of Express Scripts, one of the largest pharmacy benefit management organizations in the U.S. As dramatically as the company has grown, Wimberly has found that selecting better vendors and driving them to become trusted advisors has been a path toward better throughput and innovation. It also has allowed him to populate his own team with a higher concentration of subject matter experts and to lower the cost of IT across the board.
WHO: Gary Wimberly, CIO, Express Scripts
WHAT: Detailing his approach to vendor management and the value he has derived from a more robust vendor management process
WHERE: St. Louis, Missouri
Gary Wimberly has managed IT at Express Scripts through an astonishing era of growth. The company has gone from a $40 billion company to a nearly $100 billion company in just a few years. He has led major activities through the merger with Medco, and ensured that the cost structure of IT has decreased while its capacity to innovate has increased. One of the key weapons in his arsenal has been a better vendor management process than most other companies have. In this interview with CIO Insight contributor Peter High, Wimberly explains how he and his team have accomplished all of these feats.
CIO Insight: Your organization was among the earliest to establish a vendor management office. Clearly, your team has thought about the management of vendor partners. First, I would to know what has driven your use of external partners.
Express Scripts has gone through a period of extraordinary growth. When I joined the company our revenues were one-fifth of what they are now, as we close in on $100 billion in revenues. We operate in an ever-changing environment as well, as health care is as dynamic an industry as you can find. As we have expanded, IT’s responsibilities have grown accordingly. We need to do the traditional technical jobs that IT departments have done for years—the so-called “keeping the lights on.” In this category of work, we are expected to reduce costs to operate base functions each year. Frankly, it’s a constant struggle to do more for the same budget or less.
The bigger challenge and opportunity is that we are increasingly a part of the innovation puzzle at Express Scripts. So much of what we do, from an innovation perspective, has IT at its core, whether it is with our virtual pharmacy or data analytics teams. In order for us to meet these demands while we grow exponentially, vendor partners need to be a big part of the story. Vendors provide critical flexibility to scale our workforce in the face of client and regulatory demands.
How has your relationship with vendors evolved over that time?
Several years ago, our IT team resembled many others. It was comprised of leaders, subject matter experts and execution teams. We realized we could not meet the growing expectations because to an increasing extent, we were the bottlenecks. If the company came to me in the fourth quarter and asked me if we could spend $50 million more on new IT capabilities, frankly, we would not have been able to do so. Instead of adding more employees, I developed a resource strategy that augmented our employee base with outside resources.
At the outset, we created deeper relationships with three tier-one service partners who together helped us change our organizational model. We rely on them for 80 percent of our external labor. As a result, our cost per employee went up because we have a greater concentration of leaders and subject matter experts but with a lower cost per contractor, the overall FTE cost declined.
This article was originally published on 05-17-2013