Project Turnaround Produces Modernized Unemployment Insurance System

Successful integration of Tax, Benefits, and Appeals at launch for the State of Indiana's unemployment insurance system

Across the country, agencies tasked with delivering services pertaining to unemployment insurance, such as Indiana’s Department of Workforce Development (DWD), were relying on large, outdated legacy mainframe systems. Operating on aging technology, these systems were quickly running out of support.

The antiquated systems, which were hard to maintain and required significant investments of time and resources from technology staff, became a hindrance. In a world that requires on-demand information, the systems showed their age as their ability to serve citizens and employers began to wane.

Indiana wanted to be one of the first states to ensure its citizens and employers were receiving the resources they needed in a timely manner. Modernizing one of its core applications was the first big step for DWD to meet this need.

So begun the State of Indiana’s efforts to modernize its unemployment insurance system.

Project Turnaround

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Indiana Department of Workforce Development

The Indiana Department of Workforce Development is charged with delivering services to citizens and employers alike, including unemployment benefits for job seekers, tax collection and maintenance for Indiana Employers, and an Appeals process that provides recourse for both parties.

The Problem

With technology that was holding back the potential of the Indiana Department of Workforce Development, the State of Indiana was ready to modernize its operations.

The right legislation to provide the necessary funding was passed, and Indiana deemed it time to replace the legacy mainframe system, which had been implemented in the 1980s.

The State of Indiana, one of the first to attempt to refresh its unemployment insurance (UI) system, developed the following goals:

  • Modernize UI systems and replace the outdated technology;
  • Provide new online self-service offerings to employers and citizens; and
  • Create a comprehensive UI system that centralizes each business function into a singular application.

Federal Bills Enacted

The Reed Act and House Enrollment Act was passed by the Federal Government in order to allocate funds to state workforce departments around the country to modernize core unemployment insurance applications, later referred to as Unemployment Insurance Modernization (UIM).

The Roadblock

With clear priorities established, DWD engaged a vendor to begin the UIM project in 2003. Shortly thereafter, complications arose that led to contract termination. After a three-year delay in the UIM project, DWD engaged a second vendor in 2006. The project was initially off to a good start with some “quick win” release deployments, but five years passed and DWD had yet to transition off the mainframe legacy system in 2011. Struggling with transparency into project status and trajectory, DWD hired KSM Consulting (KSMC) to perform Independent Verification and Validation (IV&V) services over the development.

The KSMC team established four guiding goals:

  • Accurately report project status to provide transparency and a better understanding of “where we are;”
  • Improve interactions between state and vendor project resources to repair project culture;
  • Develop recommendations for improving project processes and approaches in key areas of the software development lifecycle; and
  • Provide key metrics to understand if the existing project plan was achievable and realistic.

KSMC to the Rescue

Facing major gaps in transparency of the current status of the project, DWD executives sought to understand where the project stood, where it was going, and when they would bring the project to successful completion.

In order to ensure success, the KSMC team understood that several steps needed to be taken.  First, the team developed dashboards and established metrics that accurately depicted the status of project efforts as well as provided insight into the effort left to cross the finish line. By centering the team around these dashboards, all parties were aligned on project status in relation to successful implementation. To achieve success, KSMC had to gain buy-in from several parties including state executives, project team members, and business resources, as well as contractor project management and technical resources.

Despite KSMC providing transparency to the project team as a whole and several recommendations to the contractor project resources, the state-contractor relationship continued to deteriorate. As the pace of the project continued to flag, DWD decided it was once again time to end things with its current contractor team. In late 2012, DWD asked KSMC to take over management of the project and be accountable for its successful delivery.

Steps to a Successful Launch


Steady State
launch
Officially tasked with the successful launch of the UIM system, the KSMC team immediately jumped into action and began interviewing DWD resources to analyze project team members’ knowledge, skills, and abilities. Once determined, reorganization of the team went into effect, placing highly capable individuals in the most important technical roles.

With the right team in place, the project shifted gears to refine the processes needed to successfully support a team of this size. Processes touching the entire software development life cycle were updated to ensure efficient and accurate quality of work. In addition, a detailed communication plan was developed for continued alignment among key stakeholder groups.

Efforts then went into identifying the scope of work for a minimally viable product (MVP) the team would strive towards. The MVP represented the basic functionality required by the business to take the system live while maintaining its core day-to-day business processes. To accomplish this, stakeholders were aligned to the long-term vision for the product – understanding that the base system would be built up and enhanced in the years to come.

At a time when tolerance for failure was low, a concise project plan with clearly defined benchmarks was put into place, including 30-day milestones to track progress. By establishing and meeting the milestones, the team began walking the long road to rebuilding the executive leadership’s confidence in project success. Later, this became vital in making the decision to take the system live.

Launch

The team maintained a steady track record of success in completing milestones for the next several months. Nearly ten years from the project’s original initiation, and only one year after KSMC took ownership of the project team, the agency’s modernized Unemployment Insurance System, UpLink, was successfully launched on January 19th, 2014.

Impact

Over the last several years, many states and state consortiums all across the country have attempted to modernize their unemployment insurance systems to integrate Tax, Benefits, and Appeals into a single cohesive system. Indiana’s experience proved the complexity involved. Even with millions of dollars invested to launch the integrated systems, to date, success nationwide has been limited at best.

Working with KSMC, the State of Indiana was the first state to successfully modernize a system that integrated Tax, Benefits, and Appeals at launch.

With the launch of UpLink, the unsupported technology that had presented significant risk to the agency was eliminated. Instead, the new system was developed to meet the current and future business needs of DWD. UpLink was designed to be modified in response to changes in agency UI policy as well as federal and state laws to support the system into the foreseeable future.

Working with KSMC, the State of Indiana was the first state to successfully modernize a system that integrated Tax, Benefits, and Appeals at launch.

Additionally, the launch allowed DWD to realize a wide range of benefits for claimants, employers, and the internal DWD staff utilizing the system.

  • Claimants now enjoy 24/7 online access as well as increased accuracy and timeliness in regards to benefits.
  • Employers have access to tax and liability information 24 hours a day and benefit from near real-time transactions, eliminating processes that took multiple days to complete.
  • Internal staff have an increased ability to detect fraud, successfully complete collections, and stop improper payments.

The project has moved into a steady state phase of defect and change management to continually support DWD. In a nutshell, KSMC took one year to turnaround a project that had stalled for 10 years and was ready to be written off as a failure into a project that was successfully launched and continues to be an asset for DWD, citizens, and employers.

Future Outlook

Due to the strong relationships established between KSMC and DWD, DWD continues to retain KSMC’s project management expertise to oversee the successful support, maintenance, and enhancement of UpLink. Focused on three pillars including fraud prevention, reducing improper payments, and the effective collection of liabilities, the team strives to continue delivering value to DWD’s internal business users as well as Indiana’s claimants and employers.