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International Social Security Association ISSA Meeting of Directors of Social Security Afric Organizations in Asia and the Pacific Seoul, Republic of Korea, 9-11 November 2005
Implementing social security information and communication technology (ICT) databases
Brian Lee-Archer Executive Consultant - Pensions IBM Global Social Segment Asia Pacific Australia ISSA/ASIAPACIFIC/DM/SEOUL-4(b)
Implementing social security information and communication technology (ICT) databases Brian Lee-Archer Executive Consultant – Pensions IBM Global Social Segment Asia Pacific Australia Introduction Comprehensive client databases have always been important in social security administration. Even in the early years of many schemes, significant investments were made in the available technologies to manage, record and process large volumes of data relating to membership, contributions and earnings, claimants and their dependants and claims and benefits. Good records have always been a prerequisite for effective collection of contributions, to ensure timeliness of service and for compliance and fraud control. Until recently, the basic nature of the benefits provided by social security organizations remained relatively stable even as the volume of transactions generated by growing coverage increased substantially. The increases in volume alone and the accumulation of data over the lifetime of many citizens, mean that techniques that worked in the past will not support the basic but vital operations of many organizations in the years ahead. In addition, more modern social security concepts and needs are placing new demands for integrated and more proactive approaches. Policymakers also need to understand complex trends in the nature of work and the incidence and duration of claiming. They need to assess the impact of social and demographic changes and to make more informed judgments of costs and social outcomes. The widespread adoption of defined contribution (including notional) schemes for social insurance demands more specific and voluminous record keeping over a person’s entire working life. More powerful computers and new software applications are required to meet modern demands. This paper will assist decision makers assess some of the trends in business application development approaches. It is business applications that automate the business processes that in turn populate and use databases of information. New business applications offer great potential for improving the quality of service, for doing more with less, for preventing fraud and for ensuring that the spending on social benefits achieves the outcomes intended. Some of the trends will not be as relevant as others; some will prove
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more costly than at first appears and others may prove far more complex than the marketing hype suggests. However, when carefully selected and applied, technology advances can enable faster and more exciting business progress on an affordable basis: technology used in the right can transform business vision into concrete outcomes. Achieving the vision will require more than new hardware and more sophisticated software architectures. Careful planning, design and implementation of databases along with the business processes that collect the data are more important than any architecture, package, product or computer. Scrupulous analysis and design was always important but somewhere along the way the promise of design-free excellence tempted some organizations to assume that costly tools and new architectures could somehow compensate for incomplete and inaccurate data. Many social security organizations have rediscovered, at great cost and after long delays, that database design, together with accurate processes for recording and maintaining data are the primary building blocks of successful administration. Selecting the right business application development approach can dramatically assist in getting these primary foundations properly designed, implemented and exploited, with less risk and at less cost, than under traditional methods. The paper discusses how rising business complexity, increasing costs and new types of risk are encouraging social security organizations to look for new ways to ensure that their investments in information and communication technology (ICT) deliver the required business efficiencies and advantages for stakeholders. There are a variety of tools and techniques available that can ensure that all components of a good and modern system are designed in harmony and in step with each other. These tools and techniques increase the likelihood of success in business, technical and financial terms. Selecting good tools is essential, but the best and most powerful tools in the hands of undisciplined workers are dangerous. Therefore, senior managers should understand, at a high level, the principles of ICT project management. The report of the ISSA Technical Commission on Information and Communications Technology released at the General Assembly in Beijing 2004, Information and Communications Technology Social Security Project Management, is an ideal place for a busy executive to begin to understand the modern challenges in ICT. 1 The ISSA report covers ten key features of ICT project management which are :
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Project definition Stakeholder involvement
Training (including managers) ICT project and risk management Project control and monitoring . Project Manager (selection and skills needed) Communication strategy
1 The full report can be found at URL http://www.issa.int/pdf/IT/2IBM.pdf
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• • •
Planning and managing human resources Technology (matching technology to needs) Assessing project progress
This paper focuses on one of the most important decisions in the project management cycle when making an ICT investment for the automation of business processes. This decision is the sourcing method and development approach for software to automate social security business processes, also known as business applications.2 Four distinct approaches are in active use around the world. All have their advantages and disadvantages and there are many factors that influence the decision on what is the right approach for a particular situation. These trends in social security business application development reflect the general trends observed in the software development industry at large. The four approaches are:
• Custom development – the most traditional and widespread approach. Software is developed from scratch and is specific to the business requirements of the organization. It is a one of a kind application, unique to the organization it was developed for.
• Transfer - where a custom built application is ‘transferred’ to another organization where the business requirements are considered to be similar. The original system is then modified so that it effectively becomes another custom-built application. This approach is more commonly seen at a state level in the United States.
• Packages or Commercial Off the Shelf (COTS) – pre-defined business software that follow some configuration to meet specific business requirements. Packages are premised on the concept that many business processes can be standardized and the organization achieves savings and efficiencies by adopting the pre-built processes that are supported by the package. Packages first emerged to support finance and human resource business processes.
• Industry Frameworks – are an extension of the package approach that provide more flexibility. Frameworks comprise pre-built components that can be configured, extended, modified and even added to. They may have a reference application that can be used as a starting point for a new business application.
Finally, the paper introduces the concept of component based analysis method that can assist in the selection of the most appropriate development approach for new and enhanced business applications.
2 Questions that senior managers should ask about every project are suggested in the ISSA publication referred above and are reproduced as an Annex to this paper for ease of reference.
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ICT in social security Where we are at today Public and private sector organizations have all faced profound change in the last 30 years in the way they do business and in the tools available to support new business models. Competition between private and public sectors is becoming more evident in many administrative areas but seems to be particularly strong in the social security arena with debates about privatization of pensions and other benefits being fuelled by concerns about the Ageing Crisis3 and other affordability issues and growing emphasis on rehabilitation, training and prevention as supplements and even as alternatives to income support. Social security organizations the world over face broadly similar challenges: • They support large numbers of citizens, sometime almost the entire population in
some way or another.
• They have a legislative directive to be correct in what they do.
• They provide benefits and services that are complex and more and more likely to change.
• They may process millions upon millions of transactions (manually or automatically).
• Typically, they rely on ICT to deliver benefits and services to achieve efficiency and effectiveness targets.
These challenges have shaped how ICT has evolved within social security organizations. Following is a brief summary of the issues facing ICT in social security. Changing business pressures There are many parallels between commercial organizations and social security organizations and this has enabled many of the advances in ICT, developed for the commercial environment to be transferred to the social security environment. However, there are also fundamental differences. A commercial organization may decide that it will shed 2 per cent or 5 per cent (or more) of its existing customer base so that it can gain a bigger slice of a more profitable market segment. This is rarely a valid option for social security organizations that must reach out to all citizens including the most vulnerable and bring them into the fold through better access to services. There are other differences, for example a commercial insurer can take a more pragmatic view on fraud risks whereas social security rules are enshrined in law and often require more rigorous application.
3 The World Bank Averting the old age crisis: policies to protect the old and promote growth, Oxford University Press, New York, Sept 1994 - The World Bank reports that systems providing financial security are under strain throughout the world due to rapid demographic transitions caused by rising life expectancy and declining fertility. The World Bank says that traditional safety nets are weakening under the weight of this growing burden and that government-backed pensions, have proven to be both unstable and difficult to reform, and are in peril. The result, as reported by the World Bank, is an impending old age crisis that threatens not only the old but also their children and grandchildren.
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Typically, public sector agencies respond less quickly to innovative change. They have to adapt at a pace that reflects the needs and abilities of their citizens. They have to take long term views of the effects of changes and often they have to anticipate social, economic and demographic change. Saving money, doing more with less and other efficiencies have to be balanced by the need to ensure that critical public services remain accessible to all sectors of society.4 Future proofing is still required but development cycles are shrinking Social security organizations need to design systems that will stand the test of time. Organizations are under pressure to design, deliver and implement, sometimes within months, business systems and processes that might then remain in use for ten or more years. However, they also face many uncertainties about budgets for ICT development where projects span several years. In addition, government priorities may change if ICT projects do not deliver early on investment. Historical factors The social security sector was one of the early adopters of information technology beginning with the Social Security Administration (SSA) of the United States as far back as 1936.5 Many countries made significant progress in the 1960s and 1970s. The use of ICT in the social security sector has come a long way in the last 30 years. However, organizations that were early leaders in the use of ICT in their own countries are finding it increasingly difficult to deploy newer technologies and new processes. There are a number of reasons for this phenomenon, for example: • Business or transaction volumes have grown. • In many cases the schemes are more complex. •
Society itself has evolved; for example, there are distinct trends towards smaller families with the consequences that social security may have to undertake wider roles. Some countries report a greater willingness by citizens to claim benefits. Fraudulent claims are also on the rise in some countries. Citizens are less tolerant of delays. Increasing international mobility creates new challenges.
However, changing society, growing populations and more informed citizens are not the only factors that make change difficult. Some technological factors can be seen also:
4 As social security organizations modernize, they need to continue supporting existing services and old ways of doing things while they bring in new services and new ways of doing things. Their clients may consist of young and old, those who are educated and those who have had little opportunity for education, rural and urban dwellers, those who are financially secure and those who are not. No matter how sophisticated a system becomes at meeting these varied needs, organizations must continue to support the most vulnerable individuals in ways that they can understand and manage. 5 Adler, Michael, Computerisation and E-Government in Social Security: A Comparative International Study. IBM Institute of Business Value, New York, 2005.
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The public sector is now faced with greater competition for ICT experts at the same time as the workforce that built many of the systems in use today, is ageing and approaching retirement.
Previous costly ICT failures make new projects difficult to justify in terms of the risk versus the potential benefits. Over many years, business processes were automated and supported by IT based business applications, that were developed from the ground up with little need to consider re-use across different social programs or different organizational boundaries.
Organizations used relatively few products and tools to develop their systems. Core skills were often concentrated on writing very large systems in COBOL (or equivalent programming languages) and later using transaction processing software that was highly generic. The skills developed were quite capable of supporting benefit program, contribution collection, payroll and the myriad of other business needs. However, the processes often lacked the sophistication now offered by highly specialized packages.
Traditional, or legacy, systems built some years ago may require vast effort just to keep pace dealing with products no longer supported by the vendor and the latest versions of databases and other software products without giving any visible, or immediate business benefits from the end-user and citizen perspective.
By contrast, typical packages comprise many different components and have to continually adapt to reflect improvements in underlying database technologies, operating systems, telecommunications techniques and development methods. Driven by the demands of many users, the developers of packages can respond quite quickly to innovation and upgrades in other technologies and packages.
Some database designs still reflect the hardware constraints of 20 or 30 years ago A further technical inhibitor to modernization relates to design decisions made many years ago solely to optimize hardware performance. Many databases were initially designed to minimize keystrokes, network traffic, disk access etc and very clever approaches evolved based around static perceptions of business processes and policy needs. Accordingly, there are many instances of large legacy databases that have worked extremely efficiently for decades in processing contributions and payments but which cannot be easily migrated to modern designs required to support citizen centered services. Associated with the database design issue are other factors. Citizens, claimants, employers and officials are all liable to make minor errors in reporting and recording facts and data. ICT systems themselves can cause and contribute to these errors through hardware and software related faults. Many trivial errors, data integrity problems in ICT speak, may not have a major day-to-day impact but they can accumulate over decades within large databases and then severely complicate the migration effort to a new system. Such errors may have had little effect when schemes were relatively simple, when workers changed jobs less frequently and indeed when a smaller percentage of people survived to claim pensions etc. Where errors came to light in the past it was often possible to have the problems solved quickly by the employer, particularly where the employer was very large and if workers had remained on the payroll over many years.
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Developing social security systems for the future A case for change has emerged Social security organizations planning new ICT strategies are faced with inflexible databases, a high probability of passive data integrity problems,6 shortages of modern ICT skills, complex legacy hardware and operating system environments and few proven upgrade and migration options. In other words, in addition to having to evaluate a raft of new technologies and new business models, social security organizations face difficult choices in how and when they will modernize their services because they have many constraints arising from decisions made many years ago. It is not surprising that relatively few have rushed to implement general-purpose packages, designed for banking or industry that forced technical migrations but gave few practical benefits to mainstream operations. A better understanding of the business benefits offered by new technology is only part of the problem. Vitally important is a roadmap that will allow social security organizations plan a path, at an affordable cost and with visible financial and other returns, from where they are today to new systems that will prove more flexible and adaptable. Some pointers in this regard are offered in the following sections of this report. As policy and business rules changed, ICT systems were modified to reflect the new position. Very often, changes were ‘hard-coded’ into programmes that were initially designed at a time when changes were much less frequent or extensive. Over time, the accumulative effect of the generations of change left many social organizations with “legacy systems”, typically designed for yesterday’s business, on ageing and near obsolete technology platforms. There are many reports of legacy systems reaching a point where routine legislative updates to existing programmes can not be performed without significant cost, lengthy development cycles and unacceptable risk to existing operations. It is not surprising therefore that efforts to incorporate entirely new programmes and business models sometimes failed or took longer than expected to implement. In severe cases, some systems became very expensive to maintain and almost impossible to change because hardware or software components become obsolete and there no longer any staff available that understood the inner workings of the system.7 In addition some systems faced risks of failures that could cause severe business disruption and possibly hardship to large numbers of citizens. Many organizations around the world are now looking to replace or significantly upgrade many of their legacy ICT systems.
6 That is to say errors in data on the database when migrated to a new environment could cause problems when used to support new processes. 7 Excessive maintenance costs can result when organizations are locked into long terms contracts for hardware and software products that become obsolete during the life of the contract.
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In general, this is being done to: •
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Deliver faster services online - by making services available to users online or via assisted channels such as telephone call centers, the decision turnaround time by the organization can be reduced. It becomes the responsibility of the client (or the call center agent) to enter data correctly (in comparison to completing forms and submitting a postal application), freeing up administrative staff time to determine eligibility assessments instead of performing data entry tasks.8
Improve accuracy and speed of paper-based systems – in transforming existing business processes from manual, paper based systems to automated electronic systems, significant business improvements can be made. Processes that involve human interaction and decision-making processes (perhaps through calculator or spreadsheet methods) can be streamlined. This ensures enhanced consistency, improved traceability and greater accuracy of decisions.
Initiate rapid application development – delivering applications quickly can be of strategic importance, for example, when a new benefit needs to be implemented almost immediately. Responding to natural (and terrorism-related) disasters can present immediate challenges to a social security organization that can only be supported adequately through ICT.
Adopt a client-centered approach to provide better services and reduce fraud – by adopting a single client repository across all programmes, it is possible to provide a more holistic approach to integrated case management. Clients can be treated as clients across programs (e.g. it is possible for caseworkers to view details of all client cases) and in addition, integrated cases (e.g. for other family members) can be viewed together, enabling more appropriate decisions to be taken.9
Enable faster implementation and predictive modeling of legislative changes – traditionally, changes in legislation have been lengthy and costly to implement, making it difficult for organizations to deliver a timely service to citizens. This has often resulted in months of delay, following announcement of legislative changes. With new solutions, changes can be made more readily and the effect of likely future changes can also be modeled – allowing organizations to assess the financial impact of a given change.
Adopt open standards and open source for reduced costs and not being locked in by proprietary products – the relative decline of closed proprietary operating systems, databases, application integration approaches and hardware means that
8 It is noted that many people can not can interact with online technology because of age, education, health, means or location. Online systems will be more difficult to develop in some less developed regions where broadband penetration is still at an early stage. Telephone call enters, as a primary service channel, are now very prevalent in many countries. For many countries, simply changing business processes to take advantage of telephone based processing and other telephone based technology such as SMS (short messaging service) is a more viable and practical approach within reach of a much larger proportion of the population.
9 As well as enhanced service delivery, fraudulent use of the social system can be minimized through implementation of a client-centric approach.
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organizations are increasingly able to shop around and “plug and play” ICT components from multiple vendors without incurring excessive integration costs. The open source software movement, typified by Linux and the open source browser Mozilla can provide organizations with enterprise-strength non-proprietary operating systems.
Business application development approaches for social security Four broad approaches In designing and building new applications or modernizing legacy systems, decisions are required to select the appropriate development approach. Business application development for ICT can be classified under four broad approaches: • • • •
custom development; reuse of an existing system, a transfer system; commercial off the shelf (COTS) packages; or industry specific framework.
Each approach has its advantages and disadvantages with each carrying varying levels of risk and flexibility (illustrated in Figure 1 below). These approaches are not mutually exclusive and there is usually some overlap. For example a custom build approach may contain elements of re-usable components sourced from a framework. The degree of flexibility and the level of risk translate into development and maintenance cost. There is no absolute right or wrong choice, each situation needs to assessed with an open mind. A brief overview of the different approaches is outlined overleaf together with some advantages and potential disadvantages listed for each case. This is not an exhaustive list of disadvantages or disadvantages and it must be appreciated that there are many additional factors to be considered before deciding on the appropriate approach for any given situation. Figure 1: ICT business application development approach versus risk and flexibility
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Custom development Custom development offers the best or most precise fit with unique customer requirements but may also carry the highest risk of failure as a result of long delivery times and high implementation costs if the project is large and complex. Advantages • •
• •
•
•
Designed for specific requirements – the business can get exactly what it asks for Where needs are well known, not too complex and expected to remain stable, costs can be minimized.
Disadvantages
High initial costs may not be balanced by maintenance savings.10 For complex needs, requirements definition can take a long time and there is risk that the system can be partially out of date at an early stage in the development cycle.
Transfer system A transfer system is a derivative of the custom build and package approaches, where a generic, non industry specific package or a purpose built system developed for one organization has been customized for one organization and then offered to other organizations with similar business requirements. At present, transfer systems are most typically encountered in the US where a state government decides to take advantage of custom development in another state. However, initial experience is showing that they may still take a long time to implement. Similarly there are some clusters of countries where cultures, laws and societies share many common factors and where there are strong similarities in social security concepts.11 These and other clusters might also consider transfer options. Features and advantages
Where the agencies have very similar needs, rules and cultures there is a reasonable prospect that an acceptable fit can be achieved. However, any subsequent customization by any of the agencies can gradually lead to difficulties in maintenance.
If the requirements are a good fit, you can speed up development time.
10 In fact ongoing maintenance could be quite high if the application is based on many components from many vendors due to the need to continually manage upgrades in the component set. 11 Such clusters may be in East Africa, Latin America and perhaps in the Caribbean. With many eastern European countries undergoing similar transitions from the Soviet era there may be some scope for transfer solutions in that broad region also.
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Disadvantages •
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If the substantial research and development investment necessary to enable efficient transferability was not part of the original design (and why would the first organization pay for that!), transfer systems can be inflexible and end up being more expensive to build and maintain than a custom-built system.
They can be based on point-in-time technologies and depending on design may not be able to easily changed in line with technology changes.
Package system – COTS There are, however, several excellent generic (i.e. non-industry specific) packages for customer relationship management (CRM) and Enterprise Resource Planning (ERP) that can be adapted successfully to meet standard needs that arise in many sectors.12 The degree of compromise depends largely on the scale of adoption and the difference in functional fit. Packages rarely, if ever, completely meet an organization’s functional requirements. A package system may offer shorter delivery time and lower implementation cost at reduced risk but without the 100 per cent functionality fit that custom and transfer systems can offer. Traditional packages may seem a good fit when they are initially procured but because they are not designed and tooled to provide long-term flexibility, the total cost of ownership can escalate if requirements change. Packages tend to assume a steady state business model. When major changes occur in an organization (e.g. consolidation of business areas, taking on new responsibilities, merging with another organization, or substantial legislative change to business rules) packages may need extensive re-customization with further compromising on the business functionality and business model. Non-standard extensions may be required to meet additional functions and over time, these could dilute the architecture of the package and contribute to increased maintenance costs or make migration to new generations of the package virtually impossible. Features and advantages
If the requirement fits, they can usually be installed quickly – at low cost and with low risk.13
Externally supported product with new features and functionality available through regular software upgrades.
12 Enterprise resource planning software – CRM and ERP solutions break down barriers between departments by using a single database for the storage of all customer, citizen and corporate information and by streamlining the flow of information. Examples include SAP, Oracle, Siebel, PeopleSoft, Baan, JD Edwards, Lawson etc. 13After successful implementation there are still some risks that the core product will diverge further from the organizations preferred style of doing business. Enhancements and upgrades to the core package by the software vendor are not driven by specific industry requirements but by generic business needs that are common across multiple industries. A social security organization may find that it has to respond to other pressures and that over time the extent of customization grows beyond the original acceptable level.
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Disadvantages •
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Often based on an assumption that processes are transferable across industries and business and the business is forced to adopt the package business processes that may not be optimal.
Total cost of ownership has elements of uncertainty associated with the long-term commitment of the product suppliers development plans and on-going suitability of changing business requirements to the solution.
Industry specific framework An industry framework is designed and tooled to be modified in line with changes in the business requirements at low cost and risk. A framework-based application is implemented with the full knowledge and expectation that requirements will change rapidly. An industry application framework can offer substantial end-user functionality built on a robust, state-of-the-art infrastructure designed to support rapid customization to a specific customer’s needs. Application frameworks specific to the social security sector are now available in the open market. In some cases, products that were originally designed as packages are being transformed into a more flexible framework approach with an emphasis on specific social security components. They have been designed specifically for the business of social security, on the premise that although all social security organizations are unique, there are in fact many common elements that can be reused.14
A framework has a reference model that incorporates a package-like proposition with ready-built screens, business processes, administration functions, case processing and workflow. The ‘package’ or out-of the box functionality within a framework is the starting point for a new, unique social security application. An organisation then extends and modifies the reference application, at the same time leveraging the technical and business infrastructure the framework provides, such as an externalized business rules engine, auditing functions, workflow and security. Features and advantages • Offers the precise “fit” promised by custom development as the underlying
philosophy is that the base reference application has the flexibility to be customized and extended.
Built-in business processes and infrastructure that have been proven to work together.
14 For example, all social security organizations are about registering people and their families, recording needs, assessment of eligibility for various social programmes, case management, service provision and payments.
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Disadvantages • Relatively new in the social security sector and there is risk that the flexibility they
offer can result in many of long term high costs associated with custom development. The more an organization accepts the standardized package like components, the lower the risk and cost of implementation and maintenance.
• May be expensive up front – very large research and development underpin the
better frameworks.15 In keeping with developments in other sectors, public administration generally is looking to packages and frameworks to reduce their ICT costs, to shorten project schedules and to reduce risks of failure.16 The transfer concept is a viable alternative especially with solutions that were originally developed on the principles of component-based design found in packages and frameworks. Transfer solutions may be viewed as a restricted version of the package and framework approach that is appropriate where there is a large enough cluster of organizations with similar business needs and cultures. As packages and frameworks adopt more open standards, thereby facilitating the integration of re-usable components that are either purchased off the shelf or are custom built, the traditional custom build approach will begin to disappear. However custom build remains the most prevalent approach in use today. Business-driven technology decisions A component view of the business While there are new approaches to business application development emerging in the social security sector, what has not changed is the need to ensure that business strategy drives technology-based decisions. Experiences in the development of ICT in social security organizations consistently demonstrate that the introduction of ICT should be an integral part of a strategic business plan. Different partners and different types of experts, including internal users and end-users (clients), have to work together and receive appropriate and well-defined training to undertake and implement ICT projects. The organization’s senior management must show strong leadership so that staff at all levels and from different backgrounds will adhere to and support ICT development projects. Without this environment, there is little assurance that success will be achieved. Information and communications technology (ICT) social security project management – Ten issues on ICT management in social security organizations – ISSA and IBM, Geneva 2004
15 One leading company reports that it is spending in excess of US$10 million a year on research and development. 16 Historically, government human services agencies have had to custom-build their mission-critical applications. Technologies available today offer a potentially faster and lower-risk approach to new, more-effective solutions. New Solutions for Government Human Services : Research Note : Gartner Research, Sept 2003.
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The challenge for social security organizations is to ensure that business drives technology- based decisions and is unconstrained by previous technology decisions and development approaches. One approach is to adopt a component based view of the business through a Component Business Model. With a component-based approach, a social security administration can identify the unique, stand-alone building blocks that compose their organization. Viewing business activities as autonomously managed components helps decision-makers cut through the historical boundaries that build up along organizational, programme, delivery channel, customer, geographical and informational lines. Through a component view, executives can pull back from granular process analysis to see business activities holistically, finding similarities and grouping like with like. This can help them see through the complexity and redundancies that often go unnoticed with a process-centric analysis. For social security administration, starting with a generic component map along the lines presented in Figure 2 is recommended. Components are clearly bounded groups of tightly linked business activities. The defining attribute of a component is the service it provides rather than the position it occupies along a fixed sequence of steps. Instead of stages in a process, think of components as discrete nodes in a configurable value network. The horizontal axis lists the general competencies most social security organizations will have. These competencies are: strategy, oversight and delivery. The vertical axis shows three areas of accountability that all organizations must address across each competency. This type of component model helps the definition of a clear path towards IT-based solutions. Naturally, there are more complex models and different organizations may want to show additional competencies and areas of accountability. Hopefully, this simple model will serve to illustrate the concept. Using this type of model requires a good insight into the available tools as well as into the business issues of social security. It is not a magic wand but rather a method for structured systematic analysis in a manner that corresponds to the ways that software components are developed and marketed.
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Figure 2 : Generic component map for social security
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© IBM Corp. 2005
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Policyand
StrategicPlanning
Oversightand
Accountability
Service Delivery
Policy Analysis
CustomerSegmentation
Community Engagement
Strategy
Reporting
PerformanceManagement
Outcome Evaluation
LegislationSupport andManagement
Policy Interpretation
Program Planning
ProductDesign
Product Administration
ProductImplementation
CampaignPlanning
CampaignAdministration
ProspectIdentification
Marketing andAdvertising
External CampaignExecution
Account Management
Provider/Client/Employer
Registration
Intake
Screening
Change of Circumstance
Notifications
Records Management
AppealsMonitoring
Case Supervision
Outcome Management
Case Account Management
Benefit & Service
Eligibility Determination
Assessment
Service Plan / Corrective Action Plan
Recertification
Benefit & Service Delivery
Validation
Payment Instruction
Financial Delivery
IT Delivery
HR Delivery
Financial Management
IT Management
HR Management
Audit Control
Financial Strategy
IT Strategy
HR Strategy
Risk ManagementFramework
Risk TrendAnalysis
Disaster Response
Risk Prevention
Risk Detection
Quality Assurance
Risk Assessment
Collections Strategy
Collections
Accruals
Liability Calculations
Allocation
Loans & Debt
Strategy
Reconciliation
Funds Management
Market Research
SocialMarketplace
Social ProgramDevelopment Outreach Relationship
ManagementCase
Management Collections Complianceand Integrity
BusinessService
Discovery
Service Provider
Management
CapacityBuilding
CommunityBuilding
Activity Management
Service Delivery Strategy
Audit Strategy
Privacy Strategy
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© IBM Corp. 2005
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Modeling a business as a network of components can lead to improvements in three critical areas:
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Efficiency - enables organizations to eliminate duplications and optimize processes across silos.
Strategic planning - enables organizations to make more informed decisions regarding strategic alternatives by increasing transparency around costs and allowing them to explicitly identify the components that create value.
Flexibility - enables organizations to adapt more quickly to rapidly changing business environments including outsourcing, insourcing, and utilities and machinery of government change.
In order to realize these improvements, a three-phased approach is suggested namely:
Discovery and Insight – construct a component model by grouping tightly linked activities into cohesive business components.
Analysis Phase – define metrics and assess the business value contributed by each component. Determine which components differentiate the organization from similar organizations. Map existing capabilities against requirements for the desired organizational processes and performance to identify gaps in the current model.
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• Recommendation and Roadmap Phase – prioritize opportunities and prepare a modernization plan that leverages the advantages of a phased approach for the business components requiring new or enhanced IT business applications - this includes making informed decisions regarding the appropriate development approach for business applications - custom, transfer, package or framework.
This business-based approach can guide ICT planners when selecting the appropriate database architecture and the data model to support current and future needs. It can help ensure that the business processes are designed to enhance and protect the integrity of the databases. In addition, decisions on the levels of investment required to migrate incomplete and unreliable legacy data will be better informed and the costs and benefits can be defined more clearly. Conclusion Social security administrators face new and exciting challenges. They will meet these challenges using new ways of doing business while preserving the best of the past. They will keep citizens needs in focus using new service delivery channels and concepts. New ICT-based solutions will be developed that are faster and smarter but they need to be designed in a way to make them as future proof as possible. Nobody can safely predict what the future holds in societal or economic terms whereas ICT decisions made today will still be influencing social security delivery options in 40 and even 50 years. The key to meeting the challenges remains in creating and maintaining efficient and secure databases of information of citizen related life event data. Increasingly, these databases will support new functions and collaboration with other agencies, both national and trans-national, the private sector and non-governmental agencies. Traditional business application development methods will remain for the foreseeable future but will be supplemented increasingly by the integration of packages especially those that are designed using open standards. In addition open standard based industry frameworks designed around a re-usable component concept will reduce some of the effort, costs and risks in developing new applications. Some countries, perhaps in regions where developments in social security are occurring in a more coordinated way than was possible at the time of Bismarck or Beveridge will benefit from the transfer of proven technology and business solutions. With growing mobility of workers, there will be a growing interchange of data between national organizations. Over time, this will bring about a greater convergence in business processes, processing systems, underlying data models and even in basic services offered to citizens, members and claimants.
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Brian Lee-Archer
17
Annex Questions that senior executives might ask about projects: •
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Are there clear formally documented descriptions of: the project objectives, how the project will begin and end and how it will be evaluated? Remember, if a project is not well-defined, users will not willingly accept responsibility.
Is there a concise formal statement, in a form that stakeholders can readily understand, of expected achievable and measurable outcomes?
What is the real attitude among the project team to stakeholders? Are they part of the problem or part of the solution? If a senior executive suggests that the stakeholder list is not complete, can the project team quickly identify another stakeholder group? If they can do so easily, it may be time to go back to the drawing board!
Are senior executives on the project communications distribution list? Do they read the communications and seek clarifications?
Senior executives should attend some of the training sessions, if only to ‘kick off’ the project. This will encourage the trainers and the trainees, and the executives might discover something that will alert them to previously unknown risks or opportunities.
Who made the decision whether to buy or build the ICT system? Do senior executives know why the particular decision was made? What were the risks under each alternative? Is the ICT project supporting the organization, or is the organization supporting an ambitious ICT showcase project?
Have tolerance levels for project risks been set? Is there a clear statement of acceptable consequences under such headings as cost, timing, impact on the public, adverse publicity, etc?
Why is new technology being considered?
Are senior executives aware of the milestones, and will they be kept informed of progress towards each milestone?
Before problems arise, have well-defined procedures for project review been set up?
Brian Lee-Archer
