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Collaboration on Unemployment Systems Creates Efficiencies, Cost Savings

Unemployment consortiums among like-minded and like-sized states join forces to modernize old-fashioned gov tech.

At all levels of government, agencies are reaching out to benefit from the collective knowledge of their peers. But beyond sharing information and hard-fought lessons learned, many jurisdictions are seeing opportunities for tangible collaboration as they look to overhaul even some of the most stalwart public-sector systems.

Driven by a desire to create efficiencies, defray modernization costs and improve results, a number of states are forming consortiums to streamline their delivery of unemployment insurance. After all, a majority of the development work is duplicative, even across state lines. But that’s not to say that the process is simple.

The typically years-long process is a deep dive, encompassing examinations of feasibility and requirements, scrutiny of existing infrastructure and code, and many conversations between lead and member states to codify relationships, timelines and funding, and eventually, to vet vendors and sign contracts.

But it’s one that agency heads, technology leaders and observers agree can be less expensive than supporting antiquated systems, yield better performance for staff and residents alike, and — like so many other government refreshes — improve workflows.

Federal unemployment insurance (UI) was born of the Social Security Act of 1935, and quickly mirrored by states and territories. But in modern times, states have been inhibited by the cost of getting off mainframe and legacy systems. Thankfully some post-Great Recession federal funding — notably, from the U.S. Department of Labor — along with a realization that any remaining COBOL-era programmers will soon be leaving the building, has kickstarted several consortiums.

These big overhaul partnerships are in various stages, but word of their current and predicted success has spread, and in some cases, officials are adapting the consortium idea to other levels of government and areas of service. 

Across State Lines

One four-state partnership is rolling out a streamlined solution directly in the cloud. ReEmployUSA, which began development in 2004 as the Mississippi Department of Employment Security (MDES)’ Access Mississippi (Access MS), is led by the state of Mississippi and architected and coded by Tata Consultancy Services (TCS). Originally known as MRM — for Mississippi and members Rhode Island and Maine — its name changed when Connecticut joined.

Access MS was funded through state funds, UI administrative monies and a $90 million grant from the U.S. Department of Labor.

Consortium-level benefits including the state of Mississippi went live on-prem in 2015 and 2016, then migrated to the cloud in August 2017, along with Mississippi’s single-state UI tax system. Consortium-level UI taxes, including Mississippi, migrated to the cloud in September.

The benefits side of Maine’s UI system migrated to the cloud in December 2017, and officials plan to deploy its tax system in the cloud in August. Rhode Island plans to migrate to the cloud in 2019, and Connecticut in 2020 for benefits and 2021 for taxes.

Operating in the cloud, as other states have noticed, has quickened scaling, testing, maintenance and patching, according to MDES Deputy Executive Director Dale Smith and Mohammed Jalaluddin, director of the MDES Office of Technology Support and Innovation.

Maine’s deployment brought a learning curve for citizens, some of whom experienced system lockouts. The state’s Government Oversight Committee is investigating the handling of the rollout and the response to claimants, but John Feeney, director of the Bureau of Unemployment Compensation at the Maine Department of Labor (MDOL), attributed early issues to residents’ difficulty creating new passwords. He described the platform as “very reliable” and said MDOL is meeting all performance metrics.

The number of weekly “high-priority support issues” in Maine has declined significantly since the deployment, and its UI tax deployment may occur even earlier than August, Smith said. Automation realized by Access MS saved thousands of work hours, a 2013 TCS case study found, including 5,111 annual hours responding to employers about claims; and roughly 2,000 hours a year spent detecting claim overpayments.

As the relatively smooth rollout continues, Smith said Mississippi is beginning to mine its new data streams to identify internal challenges and education opportunities; and to watch for fraud. Recognizing code commonalities of around 65 to 75 percent with agencies in Missouri and Wyoming, which had previously adapted Access MS, Smith said ReEmployUSA is also exploring working with the two states to leverage their support. 

Cutting Costs

In a similar partnership, the Idaho Department of Labor’s Internet Unemployment System (iUS), a two-state consortium between Idaho and Vermont, went live in Idaho in 2014 with what iUS Executive Director Mark Mayfield refers to as version 1.0, a “monolithic” solution. It reduced manual work spent by staff by more than 2,000 hours and is now being updated in a more modular format for subsequent deployment in both states. North Dakota is also looking at joining the consortium.

iUS finds its origins in 2009 when Idaho and North Dakota formed the AWIN consortium with Arizona and Wyoming, with partial federal funding. After a roughly two-year research period, Idaho officials realized they had a very urgent need to get their agency off mainframe and parted ways with AWIN. (Arizona and Wyoming, along with Colorado and North Dakota, later formed WyCAN, a UI system shared among those states.)

iUS began its build in early 2012, buoyed by $10 million in state funding, and went live in September 2014 — three months ahead of its deadline — for just $7.2 million. When scaling the tightly structured architecture to other states proved difficult, officials began to create the new framework, version “2.0,” which Mayfield said should be easier to update.

“When you do a module or microservices, you can actually upgrade that technology in smaller chunks, so you can kind of prioritize out — ‘Let’s update that one,’” he said.

Version 2.0 should be ready this summer, he said, though it may not go live in Vermont until next year, as seasonal unemployment makes winter a busy time for UI in that state.

The system is generating a roughly 75 to 80 percent savings over the state’s mainframe UI system, which Mayfield said had annual costs of more than $1 million.  

Scaling Down

Some states are taking the consortium model and using it for different or smaller-scale platforms than those massive state UI systems, finding the benefits of partnering but perhaps without the prospect of total IT transformation.

Like some of those bigger UI consortiums, Louisiana Workforce Commission’s Office of Unemployment Insurance is also taking advantage of the efficiencies realized by shared services. The state has become known for its infrastructure consolidation, from a federated structure to the Office of Technology Services under CIO Dickie Howze, but more recently in another example of teamwork has joined roughly 12 agencies over the past three years in a new cloud-based “soft phone” system consortium.

Louisiana’s Office of Unemployment Insurance is the latest member of that partnership, joining in July 2017, and achieving a significant transformation, said Renita Ward Williams, director of the Office of Unemployment Insurance Administration. The new system, which liberates roughly 150 agents from being tethered to a specific device or landline, has dramatically lowered hold times that previously averaged 30 minutes, to mere minutes or seconds in some cases — and improved the agency’s Google reviews.

On the back end, officials at the agency, which handles an average of 5,000 calls a week, can now see how long calls last; whether claimants are calling multiple times; and join calls to help agents assist customers. The new system, from Canadian software provider Enghouse Interactive, has enabled staffers to rewrite call scripts and call flows, eliminating unneeded messaging and streamlining customer options, Williams said. Her agency is expected to save $64,000 annually as a result of joining the platform, she added. 

Let’s Get Together

The benefits of partnering are many and varied — though the most commonly heard include being able to share and trade ideas among staff who previously may not have communicated, improving ideation and process, and realizing efficiencies as residents and staff migrate and become familiar with a new system. New systems can also bring improved security and compliance standards; and officials may eventually be able to leverage everything from maintenance to software support costs.

However, Patricia O’Brien, deputy director of the Bureau of Unemployment Compensation at the Maine Departmentof Labor, cautions lead and memberstates against expecting dramatic savings immediately.

“From an IT cost perspective, we were anticipating almost a flat exchange,” O’Brien said, noting that cost divisions are more likely to change once the third state, Rhode Island, becomes active in ReEmployUSA. (In planning for the end of their federal grant monies, Maine officials have discussed “front-loading” maintenance costs to establish a recurring fund for infrastructure changes.)

Another key benefit consortium members may experience — particularly those operating in the cloud — centers on disaster unemployment assistance, according to Scott Sanders, executive director of the National Association of State Workforce Agencies. This is the idea that modern, more connected UI agencies may be better positioned to help fellow agencies in states stricken by hurricanes, floods and the like.

“I’m hoping they all improve to [that] point and all operate in the cloud. It just makes it that much easier,” Sanders said.

That’s exactly what states in the South and West have done, Williams said. UI officials in Texas assisted staffers in Louisiana after flooding in 2016; so, in the wake of Hurricane Irma’s devastation last September, Louisana UI quickly scaled up its new cloud contact center to answer calls from Florida residents during the next three to four months — then de-scaled after recovery.

Growing pains and early deployment issues may come with the territory according to Sanders, but consortiums and similar partnerships hold the potential to power through and redefine agencies’ public images, erasing bad impressions formed by labyrinthine processes and long minutes lost on hold. These updates can cut both ways, serving residents more quickly but also empowering agencies to pivot staff more effectively — from taking calls, where they’re no longer needed, to handling claims, as in Louisiana.

Not surprisingly, the idea of connecting staffers thousands of miles apart whose workflows may be 80 percent common — but 20 percent unique — elicits its share of warnings and suggested first or early steps from those who have done it.

Perhaps chief among them: Ensure consortiums or partnerships are formed by like-sized and like-minded agencies and staff to avoid conflicts over mission, and service and resource allocation.

“That is very important when you form consortiums and work on consortiums, is to make sure the IT teams are aligned and agree to all infrastructure-related networking-related items. And if there are constraints, you work toward resolving them and you don’t just stand your ground and say, ‘My way or no other way,’” Jalaluddin said.

“The other thing is, in the current environment, we at this consortium do not believe that it is advisable to bring on states that are much larger than we are. Because we are a consortium of small states,” Smith said, using California as an example of a large state that might therefore be a bad fit.

Officials also recommended creating a central management office or entity to help spearhead the effort; communicating directly with all staff; planning to on-board deliberately, emphasizing training and education; avoiding going live in multiple states at once; and being very clear on which state leads and which are members.

Getting other perspectives is also key. Williams recommended polling residents for user takes on outdated systems and features that should be added — and circling in agency staffers.

“It’s having those discussions between the IT people as well as those who know the business and those who you serve to ensure that everything is covered … that you’re using that to give people the best service that you can,” she said.

Lauren Harrison is the managing editor for Government Technology magazine. She has a degree in English from the University of California, Berkeley, and more than 10 years’ experience in book and magazine publishing.
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