Publications
Publications
- December 2024
- HBS Case Collection
Blue Cross Blue Shield of Michigan (BCBSM): The AI Journey
By: Shikhar Ghosh
Abstract
In early 2024, Bill Fandrich, Executive VP and CIO of Blue Cross Blue Shield of Michigan (BCBSM), faced a critical decision about AI adoption within the organization. Fandrich had championed AI implementation at BCBSM. After successfully developing three AI applications, BCBSM had formed an industry consortium with other BCBS affiliates and developed a comprehensive strategy focused on transforming work processes. When research indicated that AI could automate 80% of the work done by 45 analysts in the government healthcare group, Fandrich proposed eliminating half of these positions—a proposal that met significant resistance.
The situation highlighted fundamental questions about AI implementation in large organizations: How fast should companies move to adopt AI capabilities? Who should drive the pace of implementation—business units responsible for results or technology leaders pushing innovation? While Fandrich viewed AI as a strategic necessity that would transform the business, others saw it as a tactical tool to be deployed gradually. As BCBSM expanded its AI initiatives across the $36 billion organization serving over 5 million members, Fandrich had to decide whether to push ahead or accept a more measured approach to change.
The situation highlighted fundamental questions about AI implementation in large organizations: How fast should companies move to adopt AI capabilities? Who should drive the pace of implementation—business units responsible for results or technology leaders pushing innovation? While Fandrich viewed AI as a strategic necessity that would transform the business, others saw it as a tactical tool to be deployed gradually. As BCBSM expanded its AI initiatives across the $36 billion organization serving over 5 million members, Fandrich had to decide whether to push ahead or accept a more measured approach to change.
Keywords
Blue Cross; Automation; Generative Ai; Health Insurance; Insurance Companies; Innovation; IT Strategy; Organizational Transformations; Technology; Non-profit; AI and Machine Learning; Health; Digital Strategy; Digital Transformation; Leadership; Technology Adoption; Job Cuts and Outsourcing; Innovation Strategy; Health Industry; Insurance Industry; Michigan
Citation
Ghosh, Shikhar. "Blue Cross Blue Shield of Michigan (BCBSM): The AI Journey." Harvard Business School Case 825-082, December 2024.