Vendor management has emerged as a main issue.
The state’s Department of Natural Resources (DNR) had hoped to launch digital licenses and an app about a year ago but the work continues, thanks to problems identified by a recent legislative audit. Paper licenses will remain, but the new option “will get us into the 21st century,” a DNR official said earlier in the project.
Officials and the participating vendor say work is now on track, with a “phased launch” of the system set for later this year, according to DNR.
Even so, the problems identified by the audit show the hurdles involved in such projects and could provide positive guidance for other agencies determined to deploy their own digital licensing tools. Permitting, licensing and recreation management stand as some of the most active areas of government technology.
The audit, whose research predates the report by up to four months, has seven main areas of “concern” that cover such areas as launch preparation, contracts, statutory changes and the DNR legacy system.
Among them:
- DNR and Minnesota IT Services had not “finalized” a service-level agreement with PayIt, the digital license technology vendor.
- The “phased implementation” of digital licensing might not reflect “statutory changes” attached to the project.
- The “initial” launch of digital licensing will not eliminate related “legacy systems and their associated risks.”
Auditors have kept their eyes on this project for a couple of years, sparked by complaints, said Joe Sass, the IT audit director for the state’s Office of the Legislative Auditor.
He emphasized that auditors aren’t trying to “blame the vendor,” but that the recent report does offer a clear throughline that applies to gov tech suppliers and agencies that hire them.
“The lesson to be learned is vendor management,” Sass said. “You have to keep on top of vendors. No project will be perfect. There will always be bumps in the road, and if it gets extremely bumpy, what do you do then?”
Selling licenses involves more than just selling licenses, according to DNR Fish and Wildlife Division Director Kelly Straka, who said she has no significant disagreements with the audit report. Personal information must be checked and protected, payments processed, and other tasks completed before one can receive official state permission to hunt or fish.
In fact, a proposal for the new DNR licensing technology issued in 2022 included 245 functional system requirements and nearly 100 nonfunction requirements, according to the audit, highlighting the project’s complexities — sobering figures for other agencies determined to launch their own electronic licensing systems for recreation.
“Not many companies can provide digital licenses,” Straka said, “and we, state and wildlife agencies, are asking a lot. I’m not blaming PayIt. It’s much more the nature of the beast. I am not sure a single vendor can handle all the requirements.”
PayIt reportedly has received at least $300,000 from DNR, with the Missouri company set to receive 75 cents per license, and $1.24 for other transactions. The state expects to spend just more than $5 million on the upgrades.
Those costs could increase as the project faces delays, according to the audit.
DNR takes in some $90 million in license revenue each year, with the department also handling event management and snowmobile licenses, among other work, much of which will become part of the new digital licensing system, according to plans.
The ongoing licensing project in Minnesota puts the spotlight on PayIt, known for tech that helps public agencies register vehicles, process tax payments and perform other digital services.
Almost exactly three years ago the company made its first acquisition: Tennessee-based Sovereign Sportsman Solutions, or S3, whose platform focuses on licensing and permitting for hunting, fishing, RVs, boats and event management.
In an email statement to Government Technology, PayIt President and COO Tom Nieto said the planned upgrades in Minnesota will create “a modern system offering benefits like mobile license purchases and reporting and tools to expand participation in the outdoors.”
In response to the audit, the company said it “welcomed the report’s recommendations as constructive and aligned with best practices,” but also pointed out that the audit report “reflects a point-in-time completion of 7.5 percent against all requested features and does not reflect current completion of critical-for-launch functionality.”
As of mid-April, according to PayIt, “32 items of feedback” remain, issues that don’t generally concern what the company called “core system deficiencies.”
The company highlighted the scope of the project and the difficulties involved, saying that moving to a cloud-based platform is different than a “traditional software implementation,” especially a project that must cover “millions of transactions, spans a wide network of partner integrations and must faithfully reflect the nuances of state statute.”
It’s not just complexity but the potential for change in such a project that offers another lesson for agencies and gov tech suppliers. PayIt put it this way: “Criteria have evolved alongside changes in scope and priorities, requiring ongoing alignment across teams to ensure consistent interpretation and shared visibility into progress.”
As all those moving parts presumably come together, the state’s DNR struck an optimistic tone about a part of Minnesota government dear to so many residents, with Gail Nosek, a spokesperson for the agency, telling Government Technology that most of the audit’s concerns have been addressed.
“Minnesotans can expect a phased launch of the new system to start later this year,” Nosek said.
