Solution: Maryland and the private sector have come together under a grant to leverage resources and expertise for developing technology tools
Jurisdiction: Maryland
Vendors: Mitre Corp., Lockheed Martin
Contact: Karen Blass, ITSC liaison, 301/982-1582. E-mail: kblass@aol.com By Tod Newcombe Contributing Editor For years, the U.S. Department of Labor supported the use of information technology in unemployment insurance services through its automation grant program. DOL would solicit proposals from individual state agencies and then grant money for specific projects. "The weakness of the program," recalled Wayne Zajac, chief of payment control for DOL's unemployment insurance service, "was that it was so expensive and there was no leveraging of resources." With federal funding continuing to shrink, DOL decided to drop the grant program in favor of something with a little more power to it. The federal agency solicited proposals from the states on how best to do this and ended up awarding a $4.3 million grant to Maryland for its proposed Information Technology Support Center (ITSC). The contract allows for up to four one-year extensions
Unveiled last November, the center combines state government knowledge about unemployment insurance with private sector expertise in technology
Its purpose is to disseminate information about technology for automating unemployment insurance programs. But more importantly, the center will deliver working models and prototypes of technology that can be easily replicated by other states
"Every state is trying to do something with information technology," said Tom Wendel, executive director of unemployment insurance for Maryland
"Unfortunately, a lot of the effort just ends up being duplicated around the country." With less money available to support unemployment automation, Wendel believes the center will pick up the slack by helping state insurance agencies stretch resources and provide better services. "The bottom line always comes down to cutting cost and helping customers," he said
FLUCTUATING WORKLOADS In 1994, the unemployed in the U.S. filed 19 million claims, resulting in the disbursement of $21 billion in benefits, according to DOL statistics
States employ approximately 43,000 workers to administer the day-to-day operations relating to unemployment insurance
Bringing automation to this government service has never been easy. First, unemployment insurance isn't solely a federal program, but rather a federal/state service, with DOL establishing some basic operating and performance standards and allocating money to the states to run programs
But unemployment insurance varies considerably within each state concerning eligibility requirements and the amount of benefits an individual can receive. As a result, no two state unemployment programs are alike, making it impossible to develop a base computer system that all states could copy and use for processing claims
Second, the business of unemployment insurance fluctuates, with claims and benefits rising and falling according to the economic climate. Budgets are tied to workloads, making it difficult to fund long-range projects, such as automation. Finally, what automation exists in unemployment insurance agencies tends to be in the legacy system category - great for crunching numbers, but unable to drive the kind of applications needed in today's customer-oriented environment
Maryland's Support Center Maryland's Information Technology Support Center has a unique structure and environment for leveraging resources and fostering technology transfer. The center combines the efficiencies of big business with the democratic principlesof government. On the business side, the center is run by an 11-person steering committee, which looks and acts like a corporate board of directors
Reflecting the state-oriented scope of the project, the committee has only two members from the DOL, the rest consists of high-ranking state executives from either unemployment insurance or information technology agencies. It's the steering committee's job to identify tasks that can help state unemployment insurance agencies in terms of information and technology sharing
Taking another cue from the business sector, Maryland has contracted with Mitre Corp. and Lockheed Martin to handle the management and technical research for the project. Craig Ellerbrook, director and general manager of Lockheed Martin's Commercial Information System Division, said his firm can deliver results to the states "quickly through the use of demonstration models and working prototypes of solutions." He described his three facilities, where much of the project's evaluation and testing of technology will take place, as "enterprise solution centers," rather than as laboratories. "Our work is in the applied technology environment," he emphasized, "not in writing white papers." All the results and solutions developed by the project will be shared among the 50 states. "There's a lot of leverage taking place with this project," said Ellerbrook
And according to Tom Wendel, executive director for unemployment insurance for Maryland, the project's integrity and quality is also maintained by the fact that not one but two private sector firms have been contracted to provide technical expertise. "We didn't want to have just one company in there saying they were experts in everything," he said
TASKS TO PERFORM Government and private sector officials have been quick to praise the structure and organization of the Information Technology Support Center
But as Wendel said, "the proof in the pudding" will be in how well Maryland and its partners succeed in satisfying the other state unemployment agencies as customers
By early June of this year, the center already had begun work on several key tasks, including a toll-free hot line that's designed to answer general questions about the project and to direct more detailed questions to two subject matter experts - one for information technology, the other for unemployment insurance
A second vehicle for communication has been set up using an electronic bulletin board that can be accessed by any state via the Internet. The board contains everything from specific Requests for Proposals from state agencies to general information on technology trends and product evaluations. It has also served as a way for different state agencies to stay in touch with each other. "States are very interested in knowing how other states are organized around their unemployment insurance programs," said Ellerbrook. "As a result, the bulletin board has become a who's who directory for the industry." According to Ellerbrook, the key issues the agencies face in terms of technology are improving data integrity, resolving human interface problems and upgrading legacy systems. One solution that cuts across all three issues and is under examination by the center is remote filing of claims
By allowing the unemployed to file their claims by phone, the service could improve the accuracy of the data collected (voice response systems can reduce human errors) and minimize the need for travel by the unemployed (especially helpful in rural areas). Already, several states - including Maryland - are testing the practicality of remote claims filing
imaging Another technology that can help the unemployment insurance industry is document imaging. Employers must file paper forms relating to insurance and compensation. Imaging and workflow systems can convert the paper documents into images and editable text for faster processing of unemployment information
Workflow software sees to it that tasks are performed more efficiently and - with the push of a button - can reconfigure workloads so that more workers can process more documents as demand rises. Given the unemployment industry's fluctuating business, workflow could prove useful in smoothing out the peaks and valleys in claims processing
Electronic data interchange, which circumvents the paper process entirely through computer-to-computer transactions, is another technology under investigation by the center. Also on the table for study and possible demonstration projects are ways to reengineer legacy systems, strategic planning and client-server computing
HIGH PARTICIPATION Within six months of the center's creation, more than 31 states had signed up to participate in some form of technology partnership, according to Ellerbrook. He said that the emphasis on rapid development of ideas into working solutions has galvanized the state agencies into participating
The Department of Labor has also been impressed by how quickly the project has moved forward. According to Zajac, the center's use of partnerships has enabled the states to "obtain considerable expertise in the area of information technology and telecommunications." Public-private partnerships are not new. Virtually every state has practiced them to some extent. What is new with the Information Technology Support Center is the scale at which the partnerships are taking place, affecting every state and territory in the U.S. with an unemployment insurance agency
Ellerbrook, who has worked on public-sector projects in the past, knows the difficulty of running partnership projects. But this one is different. "The thing I'm excited about is the model for setting a state up to take the lead on an issue with federal funding and then to leverage that as a focal point for all 50 states," he said. "That's what is phenomenal." Maryland recently signed a contract with DOL, extending the center for another year
SIDEBAR: UNEMPLOYMENT INSURANCE: BENEFITS PAID 1980-1992 1980: $13.8 billion 1984: $12.6 1985: $14.0 1986: $15.4 1987: $14.2 1988: $13.2 1989: $14.3 1990: $18.1 1991: $25.4 1992: $25.2 Caption: As the amount of unemployment compensation benefits fluctuates, so does an agency's budget and workload. Automating under these circumstances has been difficult
Source: U.S. Employment and Training Administration
