When Jeffrey H. Margolis was a student at the University of Illinois in the early 1980s, he looked into the future and did something about it.
He saw that while information technology was considered a science-the domain of engineers and technicians-"it was obvious to me that, logically, as businesses became more sophisticated, information technology would be a major contributing part of business strategy, if not the component of business strategy that would separate one company from another," he says.
Mr. Margolis, 31, got his business administration degree specializing in business information systems in 1984. He is now corporate vice president of information services and chief information officer for Fountain Valley, Calif.-based FHP International, the nation's fifth-largest HMO, with about 1.8 million enrollees.
"I'm responsible for bringing him into the managed-care industry," said Eric D. Sipf, senior vice president for FHP's Eastern division. "I think he's one of those people who can not only see the future but can also operationalize it as well."
In 1989, Mr. Sipf was president of CompreCare in Denver, which was Colorado's largest IPA model HMO before its merger with TakeCare. Meanwhile, Mr. Margolis had been working with various industries at Andersen Consulting in Denver and "got hooked into healthcare about my second year with Andersen. I realized right off the bat that this was an extraordinarily complex industry. Everybody was familiar with the hospital side, the acute side, but this managed-care thing was just starting to evolve at high speed," Mr. Margolis said.
He saw opportunity because "the managed-care companies were essentially paper factories who were looking for ways to differentiate themselves in the marketplace." He knew that information technology would be the key to that differentiation.
Mr. Sipf said he became aware of Mr. Margolis' work when Mr. Margolis managed "a major information systems project" that Andersen undertook for CompreCare.
"I was very impressed with Jeff from the very early days, when he was still with Andersen. During that first year on the job, I had several conversations with him. On the first-year anniversary of that project, he made the move and became our director of information services," Mr. Sipf said.
Subsequently, in 1990 Mr. Margolis became CompreCare's CIO, a role and function created for him.
Mr. Margolis spent four years at CompreCare. When it was acquired by TakeCare in September 1993, he became CIO, and when FHP acquired TakeCare last July, he was tapped for his current position.
"My main story is I've survived two major mergers," he said.
Both times, it was CEOs' awareness of the importance of information technology to their business that ensured Mr. Margolis' survival and success. "Two major things mark how you measure success in information systems," Mr. Margolis said. "One is being able to build cost-effective systems that work and deliver excellent customer service. The other piece is being a key player with top management in the company and developing decision processes and mechanisms to ensure that information resources are being spent wisely," he said.
When FHP bought TakeCare, the CIO role was upgraded to report directly to the CEO, and Mr. Margolis was appointed over the incumbent. That battle was "waged very positively," Mr. Margolis said. "Everyone recognized that FHP needed a new direction in how it approached (information systems)."
His department has a staff of 550 people and an annual budget of approximately $90 million.
Mr. Margolis lives in a 6,000-square-foot house on an acre of land in Denver with his wife, Deborah, and their two daughters.
"Matching that up in California would take the national debt," he said. Yet they are pulling up roots and moving to corporate headquarters in Fountain Valley.
"It kind of shows my excitement level about this job," he said.
