New Jersey Department of Labor Unemployment Insurance Modernization Project BASELINE DESCRIPTION: SUMMARY REPORT January 2003
Contents Summary Baseline Description Purpose, drivers and scope Approach and sources Opportunities for improvement Strategy needs to be clearly defined and a change program agreed Processes can be made more efficient and accurate People make the system work but need more support Organization does not fully align or enable the strategic vision Technology constrains Division business effectiveness Priorities going forward
SUMMARY BASELINE DESCRIPTION
Summary… OPPORTUNITIES FOR IMPROVEMENT NJDOL UI contains committed and hard working people; however it is not able to meet its time-lapse and quality targets or to reconcile its finances fully We have found many opportunities to modernize NJ UI to work efficiently and effectively and to improve its overall performance and customer service Strategy Processes People Organization Technology needs to be clearly defined – with action plan & projects agreed can be made more efficient and accurate make the system work, but need more support does not fully align or enable a single, clear vision constrains Division business effectiveness
Summary… Strategy needs to be clearly defined - with an agreed, supporting action plan and projects NJDOL UI contains committed and hard working people; however it is not able to meet its time-lapse and quality targets or to reconcile its finances fully We have found many opportunities to modernize NJ UI to work efficiently and effectively and to improve its overall performance and customer service Strategy Processes People Organization Technology needs to be clearly defined – with action plan & projects agreed can be made more efficient and accurate make the system work, but need more support does not fully align or enable a single, clear vision constrains Division business effectiveness There are multiple visions, potentially diverging A clear vision is needed to steer the change program Strategy is not a component of UI culture No overall UI IT strategy driving architecture
Summary… Processes can be made more efficient and accurate NJDOL UI contains committed and hard working people; however it is not able to meet its time-lapse and quality targets or to reconcile its finances fully We have found many opportunities to modernize NJ UI to work efficiently and effectively and to improve its overall performance and customer service Strategy Processes People Organization Technology needs to be clearly defined – with action plan & projects agreed can be made more efficient and accurate make the system work, but need more support does not fully align or enable a single, clear vision constrains Division business effectiveness Early process inaccuracies create undiscovered rework Process hand-offs not sufficiently addressed Similar processes are undertaken across UI Customer access is constrained Payment control could be tightened
Summary… People make the system work but need more support NJDOL UI contains committed and hard working people; however it is not able to meet its time-lapse and quality targets or to reconcile its finances fully We have found many opportunities to modernize NJ UI to work efficiently and effectively and to improve its overall performance and customer service Strategy Processes People Organization Technology needs to be clearly defined – with action plan & projects agreed can be made more efficient and accurate make the system work, but need more support does not fully align or enable a single, clear vision constrains Division business effectiveness Staff ‘make the system work’ Impact of early retirement incentive has highlighted human resource management issues Mixed culture of old and new wave of employees
Summary… Organization does not fully align or enable the strategic vision NJDOL UI contains committed and hard working people; however it is not able to meet its time-lapse and quality targets or to reconcile its finances fully We have found many opportunities to modernize NJ UI to work efficiently and effectively and to improve its overall performance and customer service Strategy Processes People Organization Technology needs to be clearly defined – with action plan & projects agreed can be made more efficient and accurate make the system work, but need more support does not fully align or enable a single, clear vision constrains Division business effectiveness Organization aligns to a number of visions UI management is historically centralized
Summary… Technology constrains division business effectiveness NJDOL UI contains committed and hard working people; however it is not able to meet its time-lapse and quality targets or to reconcile its finances fully We have found many opportunities to modernize NJ UI to work efficiently and effectively and to improve its overall performance and customer service Strategy Processes People Organization Technology needs to be clearly defined – with action plan & projects agreed have evolved over time, becoming suboptimal have made the system work, but need more support does not fully align or enable a single, clear vision constrains Division business effectiveness No overall IT strategy; unclear IT ownership and accountability Current IT applications and architecture are inflexible Information is in more than one place and inconsistent IT projects have inadequate governance, control and alignment
BASELINE DESCRIPTION – MAIN REPORT
Purpose, drivers and scope… Purpose and audience This Baseline Description will inform the Conceptual Business Architecture (blueprint for future service delivery) to be defined in Phase 2. In order to ground the blueprint in the reality of service delivery today – but not constrain it – we have focused on identifying: • a high-level summary of existing NJDOL UI operations • the major challenges facing UI staff in the course of their work This document is supported by detailed business and technical descriptions of the current state of UI. These documents together form the Phase One deliverable for the UI Modernization initiative. Our primary audiences are therefore • Senior Management, Income Security • Subject Matter Experts across UI • UI Modernization core team
Purpose, drivers and scope… Drivers for the UI Modernization project The UI Modernization Project is responding to three major drivers: • A desire to ensure that modernization does not entrench current inefficient processes • A recognized need to replace UI information systems (primarily LOOPS) • The availability of funding for a large modernization effort (notably in the form of Reed Act monies)
Purpose, drivers and scope… Scope of the Baseline Description – benefit programs covered The UI Modernization project is focused on developing a blueprint and strategic plan for the future delivery of unemployment insurance services. The benefit programs we are covering are: Unemployment insurance - Standard, in-state benefits - Interstate unemployment insurance - Combined wage claims UCFE (prior federal employees seeking unemployment benefits) UCX (prior US military employees seeking unemployment benefits) Disability During Unemployment Additional Benefits during Training Self-Employment Assistance Disaster Unemployment Assistance Trade Re-adjustment Act assistance
Purpose, drivers and scope… Scope of the Baseline Description – processes covered Initial Claims Adjudication File new claim Adjudicate non-monetary issues Continued Claims Appeals Eligibility review (on hold) Continued eligibility (self) certification Submit to appeal process (AT 1) Re-open existing claim Adjudicate lower authority appeal Detect eligibility issues Correspondence handling Make payment Adjudicate higher authority appeal Determine monetary eligibility Employer benefit non-charging Inquiry handling and problem resolution Report production Control Benefit Payments Detect wage benefit conflict Trace checks Conduct field investigation Process refunds Collect repayments Receive allegations Redeposit checks Conduct in-house investigation Process wage garnishments Monthly billing Manage legal collections Process child garnishments Provide other management info Procedures training Quality Control Develop federal plans & reports Conduct federal evaluations Conduct adjustment center evaluations Policies and Procedures Develop & maintain procedures Maintain web site content Provide case digests Respond to legislation Handle web site correspondence Develop and maintain forms Management Control Strategy and planning Staffing and budget Maintain facilities and equipment Develop and maintain public communications materials Oversee performance Management reporting (RCC) Non-personnel support Systems Control Application development System test Provide hardware Application management Technical issue resolution Website management Security management Provide helpdesk Network management Infrastructure management Manage servers Deliver policy Develop & monitor policy Support policy
Approach and sources… Approach to the Baseline Description phase Phase 1, the baseline description, is the main tool - and process - to inform a creative yet realistic blueprint for the future. We have focused on understanding the causes of current performance – both positive and negative – as the real indicators of where and how to improve. Ideal Phase 3, Strategic plan How to make it work in practice? 3 Current Start 1 What happens now? Reconstruct Phase 1 Deconstruct Phase 2, Blueprint How should it happen? 2 1 Why does it happen?
Approach and sources… Interview schedule for the Baseline Description (1) Sources were interviewed over the course of the site visits below. We would like to thank everyone who made time to talk to the consultant team. Business description site visits Addition: Kevin Mc. Cabe and Doug Placa were also consulted on UI Modernization.
Approach and sources… Interview schedule for the Baseline Description (2) Sources were interviewed over the course of the site visits below. We would like to thank everyone who made time to talk to the consultant team. Technical description site visits The team also had ongoing assistance from OIT (Connie Maxson, Tony End, Carol Spisak), DIT (Rose. Lynne Zamparelli) and UI Systems Management (Frank Buonvino).
Cost of administering a claim… Cost of administering claims Total ‘ 02 costs for UI division $89. 6 M Total number of initial claims 861 K Total number of valid claims 503 K - i. e. where payment made and resulted in 1099 G Average cost of administering… … Each initial claim $104 / claim … Each valid claim (where payment made and resulted in 1099 G) $178 / claim Note, All figures are for Federal year 2002 (October 2001 – September 2002) Sources: 61 Report, Status of Obligational Authority 92102 UI Grants, November 2002; 1099 G summary report, 2002; total initial claims for 2002 as cited by David Socolow in October 11 DOL Retreat presentation. Total costs include direct personnel and capital costs, cross-charge from Tax/Employer Accounts, DIT and OIT charges, management and support overhead, covering all UI benefits including DDU.
Opportunities for improvement NJDOL UI contains committed and hard working people; however it is not able to meet its time-lapse and quality targets or to reconcile its finances fully We have found many opportunities to modernize NJ UI to work efficiently and effectively and to improve its overall performance and customer service Strategy Processes People Organization Technology needs to be clearly defined – with action plan & projects agreed can be made more efficient and accurate make the system work, but need more support does not fully align or enable the strategic vision constrains Division business effectiveness
Strategy needs to be clearly defined - with an agreed, supporting action plan and projects NJDOL UI contains committed and hard working people; however it is not able to meet its time-lapse and quality targets or to reconcile its finances fully We have found many opportunities to modernize NJ UI to work efficiently and effectively and to improve its overall performance and customer service Strategy Processes People Organization Technology needs to be clearly defined – with action plan & projects agreed can be made more efficient and accurate make the system work, but need more support does not fully align or enable the strategic vision constrains Division business effectiveness There are multiple visions, potentially diverging A clear vision is needed to steer the change program Strategy is not a component of UI culture No overall UI IT strategy driving architecture
There are multiple visions, potentially diverging … Although the Division has standard short-term objectives and targets… 2002 – 2003 goals* Timeliness Increase % of ‘initial payments within 21 days’ from 88. 7% to 90% Increase % of ‘separation issues adjudicated within 21 days’ from 58. 2% to 80% Decide 60% of AT cases within 30 days Quality/Integrity Increase % of ‘non-monetary determinations scoring 80% or higher on QPI’, to 80% from 61. 8% Improve ratio of recovery to detection of 74. 32% for fraud cases, and 83. 2% for non-fraud cases Accessibility More responsive customer service Source: Presentation by David Socolow, NJDOL Managers Retreat, October 11, 2002
There are multiple visions, potentially diverging … …there is no single, shared vision for the long-term Example diverging visions encountered during Baseline Description phase site visits and meetings: “UI is the carrot that brings people into employment services, through the One-Stop…” “Move people towards the phone [for better, faster service]” “Our mission must be to enable re-employment” “We are about benefit delivery. ” “Greater integration with Workforce New Jersey” Each of these individual visions has differing implications for the way the Division organizes and delivers services
There are multiple visions, potentially diverging … … in fact, the vision and objectives articulated during the November UI Modernization workshop still need clarification We envision that UI Modernization will revolutionize the delivery of unemployment insurance services to the workforce community. In partnership with our customers, we will enhance access to UI services – through online claims, report filings, benefit charges, issue resolution, adjudication and interfaces with other agencies - while ensuring the integrity of the trust fund. We will provide our staff with the tools, resources and training to complete their mission. Customers will benefit from easier access to a broader spectrum of services provided through accelerated communication and in partnership with the workforce community. l Free up our customers to focus on reemployment l Easy to use, be accessible l Be fair and equitable l Be integrated with related services (at least w/in DOL) l Communicate clearly and understandably on all occasions, with all stakeholders l Maintain integrity (benefits, system, data, trust fund) l Be supported by a knowledgeable and empowered workforce l Have self-service options (AI, workflow) l Be flexible to change – with legislation l DOL will be self-reliant in running system l Modernization will be achieved with reasonable cost New Jersey DOL will set new standards in unemployment insurance services by providing a fair, friendly and quality experience to the workforce community.
There are multiple visions, potentially diverging … … in fact, the vision and objectives articulated during the November UI Modernization workshop still need clarification Example: ‘Free up customers We envision that UI Modernization will revolutionize the delivery of unemployment insurance services to the workforce to focus on reemployment’ community. could mean In partnership with our customers, we will enhance access to UI services – through online claims, report filings, benefit • make current UI services charges, issue resolution, adjudication and interfaces with other agencies - while ensuring the integrity of the trust fund. as efficient as possible We will provide our staff with the tools, resources and training to complete their mission. Customers will benefit from Or easier access to a broader spectrum of services provided through accelerated communication and in partnership with the workforce community. • imply significant integration of UI/ES services l Free up our customers to focus on reemployment l Easy to use, be accessible l Be fair and equitable l Be integrated with related services (at least w/in DOL) l Communicate clearly and understandably on all occasions, with all stakeholders l Maintain integrity (benefits, system, data, trust fund) l Be supported by a knowledgeable and empowered workforce l Have self-service options (AI, workflow) l Be flexible to change – with legislation l DOL will be self-reliant in running system l Modernization will be achieved with reasonable cost New Jersey DOL will set new standards in unemployment insurance services by providing a fair, friendly and quality Where should we prioritize? experience to the workforce community.
A clear vision is needed to steer the change program … Without a clear strategic vision, shared by all senior management, the delivery of the Modernization project will be at risk… Vision defines desired future state Vision & objectives Objectives are the core goals to achieve Blueprint is the high level organization, process, people and technical design needed to deliver the vision and objectives Strategic plan details how each objective will be delivered – and how each project contributes to delivering the objectives Delivery of Modernization Project The vision needs to be translated into more concrete objectives and agreed to ensure that UI Modernization project delivers change aligned to your strategic vision.
A clear vision is needed to steer the change program … … For example, ‘further UI - Workforce New Jersey integration’ could translate into very different objectives and projects Greater integration could mean… …which could lead to projects which: Service delivery is merged, with UI and Workforce New Jersey employees becoming ‘Department of Labor’ representatives, working across all aspects of reemployment Define and implement end-to-end systems and performance measures A single managerial hierarchy Integrate the two organizations Individual ‘learning accounts’ managed by UI, with services delivered by ES Launches a new service Limited real integration – simply improving the current hand-offs Focus solely on performance improvement within the Division The vision needs to be translated into more concrete objectives and agreed to ensure that UI Modernization project delivers change aligned to your strategic vision.
Strategy is not a component of UI culture… The existing UI culture is not used to long-term, strategic planning Every day, ‘fire-fighting’ is needed to patch the current complex system of programs and support functions Political cycles typically demand short-term action Civil service system can lead to stagnation through a ’wait ‘em out’ philosophy Recent people shortages have reinforced need to deal with short-term issues first People often have to react to legislation, which may have immovable deadlines, rather than planning forward Service is traditionally delivered and funded through program silos (UI, DDU, Interstate…), constraining ability to think strategically A successful strategic plan must take these ‘disincentive’ factors into account
No overall IT strategy; unclear IT ownership and accountability UI does not have an overall IT strategy driving architecture No single IT strategy or vision for UI Division l l there are differing IT visions for UI from OIT, DIT and UI Systems Management DOL IT plan has become out of date UI Division’s IT architecture decisions are decided on a case by case basis l leads to complications with operational support and maintenance of systems e. g. problems with RCC application due to its individual architecture approach maintains enhancements of two architectures, with associated additional support costs Limited development of strategic, shared components l leading to overall more complex and expensive to manage IT architecture No single ownership and responsibility for overall design and IT strategy
Processes can be made more efficient and accurate NJDOL UI contains committed and hard working people; however it is not able to meet its time-lapse and quality targets or to reconcile its finances fully We have found many opportunities to modernize NJ UI to work efficiently and effectively and to improve its overall performance and customer service Strategy Processes People Organization Technology needs to be clearly defined – with a change program agreed can be made more efficient and accurate make the system work, but need more support does not fully align or enable the strategic vision constrains Division business effectiveness Early process inaccuracies create undiscovered rework Process hand-offs not sufficiently addressed Similar processes are undertaken across UI Customer access is constrained Payment control could be tightened
Early process inaccuracies create undiscovered rework … Accurate claim capture is critical for efficient benefit delivery Inaccuracies or incomplete information at these three key points in particular cause rework later in the process In 2002, the Division faced great challenges recently in ‘getting it right first time’ – not least owing to lack of experienced resources
Early process inaccuracies create undiscovered rework … Inaccurate claim capture leads to later rework… Rework Some rework is inevitable. However, many cases require re-work due to a lack of full data – leading to poorly informed decisions early in the process
Early process inaccuracies create undiscovered rework … Rework impacts both quality and timeliness Example 2 Example 1* Cause / event Rework No response from employer in time Employer not aware of request Request passed to employer agent Claim agent takes claimant affidavit QUALITY Claim agent resends form to employer agent Wage and Sep info (BC 2 WR) not available at monetary exam BC 2 WR in adj. center mail pile TIMELINESS Wages include severance pay WAGE data based on Sun-Sat week Claimant states extra weeks worked WAGE data not split over weeks Impact QUALITY UI version of wage / weeks entered in LOOPS and used for benefit calculations Various teams work to reconcile. Full reconciliation not possible. TIMELINESS
Early process inaccuracies create undiscovered rework … Rework is remaining undiscovered until it becomes an issue Example Currently, the principle applied is that it is the customer’s responsibility to appeal a determination or decision – whether or not the cause of the inaccurate decision may be an agency failure. This could be considered a risk because: Customary quality management activities have decreased - Supervisors are stretched, impacting oversight of adjudications - Managers focused on improving resource levels - Staff in Technical Resource Unit deployed to claims processing, to boost productivity and timeliness; in-house performance evaluations consequently suspended Additionally, claims are not reviewed between stages of the process – for example, so that issues are only identified at an appointment.
Early process inaccuracies create undiscovered rework … The need for rework is exacerbated because staff are not aware of the full end-to-end process RCC ? Take initial claims Adjudication Center ? RCC / One-Stop Process continued claims Adjudicate claims AT / Board of Review Manage appeals ? ? • For example, staff in RCCs, One-Stops are often unaware of the impact of their work later down the process – and therefore do not understand the importance of the initial information to be captured • Staff orientations do not include a ‘big picture’ description – covering the process and the different programs
Early process inaccuracies create undiscovered rework … Going forward, rework should be managed as a core factor in ongoing performance Sole factors usually considered
Early process inaccuracies create undiscovered rework … One Stop and RCC inquiries illustrate process failures with greatest claimant impact Freehold RCC Trenton One-Stop, phone & in-person Finding 24% inquiries - claimants who ‘had not received a check’ (65 calls) Potential process failure Mail may be late; check mailed to wrong address 12% inquiries - claimants who were pended in the IVR during self-certification (33 calls) IVR too complex / call queue discourages claimants to wait for a RCC agent 12% inquiries - claimants with a general inquiry who couldn’t get through on the phone (32 calls) IVR too complex / call queue discourages claimants to wait for a RCC agent 19% inquiries - claimants who were pended in the IVR during self-certification (335 calls) IVR too complex / call queue discourages claimants to wait for a RCC agent 12% inquiries - claimants who ‘had not received a check’ (220 calls) Mail may be late; check mailed to wrong address 9% inquiries - claimants who had eligibility questions (168 calls) Mail may be late; check mailed to wrong address Source: short survey undertaken at Trenton One-Stop and Freehold RCC, w/e January 17, 2003. Results provide a snapshot only; they are not intended to be statistically robust.
Process hand-offs cross multiple boundaries… The new UI Operations structure has focused on improving the core claims process through specialization Old model Local Office Local Office Local Office Change New model One Stops Reemployment Call Center Adjudication Center One Stops Adjudication Center Both RCC and Adjudication Center staff have reported that the new structure has enabled them to focus on the core of their work: processing claims
Process hand-offs cross multiple boundaries… However, creating specialist units increases the complexity of process hand-offs Claiman t Under the old model, a claimant was handled at a single local office In the new model - even in a straight-forward case - a claim will now be handled by a number of different members of UI staff, often in different offices, multiple times. This increases the potential for communications failures. Local Office Claiman t Local Office Claiman t Local Office 1 – Initial claim, RCC 2 – Monetary examination, Adjudication Center Claiman t 3 – Claimant brings in pay stubs, One Stop 1 5 3 Remote Call Center 6 4 – Non-monetary adjudication, Adjudication Center One Stops 2 Adjudication Center 5 – Self-certification, RCC (potentially) 6 – Claimant inquiry, One Stop 4 Adjudication Center
Process hand-offs cross multiple boundaries… Process hand-offs have not yet been sufficiently addressed Claiman t Efficient hand-offs are constrained by ä 1 5 3 6 ä Remote Call Center One Stops 2 Adjudication Center ä 4 Adjudication Center ä location of and access to information difficulties in claim tracking many claims still being paper-bound, when hand-offs are across geographically dispersed offices sharing workload across geographically dispersed offices when claims are paper-bound At time of writing, the number and types of hand-offs are additionally confused because some areas of the State have not yet migrated to the new operations model.
Process hand-offs cross multiple boundaries… In addition, processes have evolved to include inefficient steps Over time, some processes have needed to be changed in response to external factors (most commonly, legislation). In the beginning… Efficient process designed Process tweaked … in response to legislation… Tweaks becomes working practice … months and years following
Similar processes are undertaken in isolation… Different parts of UI independently follow similar processes (1) In-state UI claims, TUC claims, UCX/UCFE claims, TRA One Stop Initial claims Detect eligibility issues Determine monetary eligibility Employer benefit noncharging Adjudicate non-monetary issues Continued eligibility certification Make payment RCC Adjudication Center Collateral claims Interstate claims Disability during unemployment SEA ABT Workforce New Jersey
Similar processes are undertaken in isolation… Different parts of UI independently follow similar processes (2) In-state UI claims, TUC claims, UCX/UCFE claims, TRA One Stop Correspondence handling Inquiry handling Report production RCC Adjudication Center Collateral claims Interstate claims Disability during unemployment SEA ABT Workforce New Jersey Note: we have shown correspondence handling being undertaken at the Adjudication Center only, as the Division is migrating towards the new operations model, where that will be the standard (for most UI programs).
Similar processes are undertaken in isolation… Process similarity can become an asset • Fundamentally, the same basic processes are undertaken across all UI benefit programs. • Different eligibility requirements may apply – as well as some legislated differences in procedure – but the similarity of benefit payment processes is an important asset on which to capitalize: if structured correctly, knowledge, tools and resources can be shared across similar processes relatively easily.
Similar processes are undertaken in isolation… Yet these similar processes are often followed in isolation Benefit programs are handled according to their differences, not according to their similarities. Example impacts: • Inconsistent claimant experience Example: A claimant transferring from UI to DDU no longer contacts a RCC supported by an IVR • Learning and best practice are not always shared Example: The Trenton Interstate Claims Unit waits an average of three weeks before conducting a non-monetary examination. When the core UI program moved to processing non-monetary exams at the start of the claim, the Interstate Unit was unaware and continued with the old process. (They are now moving toward the new approach). • Tools are provided to address issues on a program by program basis Example: Division is considering extending the RCC application for its Interstate unit – an idea that arose in the field, after implementation Example: not all adjudication centers have voicemail, but all units undertaking adjudications require ongoing contact with claimants and employers • Claim agents may not identify multiple program eligibility for each claimant UI is duplicating resources and providing an inconsistent experience for customers
Customer access is constrained… Claimant access is constrained by NJDOL UI issues Phone access constraints • RCCs are inundated with calls resulting in long call queues, claimant calls being blocked (by social security number) and calls simply being ‘dropped’ by the IVR system • Claimants wait in call queues for long periods (30 -40 minutes is not uncommon), which increases the cost of access significantly • The IVR and RCCs are open core business hours (the IVR is constrained by LOOPS’ nightly batch processing) • 411 cannot yet provide claimants with the appropriate phone number to access the UI service they require In-person access constraints • The name ‘One-Stop’ is now used by many government agencies for customer access points. Result is confusion about where to go • Some One-Stops are located in areas difficult to access without a car Web access constraints • Web access is currently limited to claim filing, with certification planned
Customer access is constrained… Employer access is also limited by NJDOL UI constraints Employers also find interaction with UI problematic: • UI staff is now receiving email addresses with the roll-out of new PCs - Staff differ as to whether they will encourage employers to access them via email - Procedures to enable use of email without compromising privacy have not yet been developed • Many units within UI do not have voicemail, yet the staff can be difficult to reach because they work on the phone continuously • Employers – as well as claimants – can find forms difficult to complete • Employers – and claimants – can only file an appeal in writing Employers express frustration that UI focuses on improving claimant access above employer access. They are discouraged that they are limited to using mail, paper-based, hand-written correspondence.
Payment control could be tightened… Prevention of fraud and overpayments has suffered recently… Prevention of fraud and overpayments has become increasingly constrained by a combination of deliberate policy decisions and indirect factors: • The move from in-person claim filing to phone and internet filing has reduced agents’ ability to identify potential fraud at the first stage • Eligibility reviews were informally suspended over 1999 - 2001 • Continued claims certification requirements were eased in December 2000 • Over the past year, Benefit Payment Control lost staff to assist with core claims processing. As a result, the number of investigations reduced • BPC investigates 12% of wage: benefit cross-match results • Under the current process and system set-up 656 staff (65% of total) have payment authority and 40 (4% of total) have A 250 access (LOOPS re-write access) • There is also inconsistency in how security procedures are followed – for example, identification is not always requested in One Stops
Payment control could be tightened… …however, NJDOL UI recognizes the need to re-emphasize early detection and prevention of fraud and overpayments UI is planning to increase the number and use of cross-matches with other State systems to catch potential overpayments and fraud as early as possible in the process. The new hire cross-match, at entry of the claimant’s social security number, is anticipated to be the most important component. This move will clearly help to improve payment control. The full process, workload and organizational implications of moving prevention activity into the initial claims process however needs to be planned carefully, to minimize impact on all performance targets.
People make the system work but need more support NJDOL UI contains committed and hard working people; however it is not able to meet its time-lapse and quality targets or to reconcile its finances fully We have found many opportunities to modernize NJ UI to work efficiently and effectively and to improve its overall performance and customer service Strategy Processes People Organization Technology needs to be clearly defined – with a change program agreed can be made more efficient and accurate make the system work, but need more support does not fully align or enable the strategic vision constrains Division business effectiveness Staff ‘make the system work’ Impact of early retirement incentive has highlighted human resource management issues Mixed culture of old and new wave of employees
Staff make the system work… Your people make the system work Managers consistently reported to the consulting team that their offices were filled with great people, giving 100% and more. Our observations support them. People across the Division of UI: ü Believe in the importance of the services they provide ü Continue to work hard to deliver benefits, having lost a large number of experienced colleagues ü Work together to resolve emergencies ü Support other offices when workload becomes disproportionately heavy ü Work overtime when requested ü Deal with the frustration that older, non-integrated systems can bring including developing work-arounds when needed
Impact of ERI has highlighted human resource management issues … The impact of the Early Retirement Initiative has highlighted resource management issues Already-low resource levels • UI suffered staff shortage before 2002 • Resources rarely pulled from other parts of DOL Insufficient staff development after new hire orientation • UI-specific training provided by alreadystretched managers • No training beyond orientation Early retirement initiative shrank pool of UI expertise • No development paths defined Recruitment takes up to six months • Despite budget being available • Despite depressed job market Lack of transition plans • Percentage of staff nearing retirement continues to be a problem
Impact of ERI has highlighted human resource management issues … Resource issues will continue to impact NJDOL UI over the next 5 to 10 years Due to the high proportion of staff nearing retirement – and the structural nature of potential mitigation actions – these issues may take a long time to resolve
Impact of ERI has highlighted human resource management issues … The Division of UI has many staff nearing retirement The early retirement initiative had a major impact on the Division of Unemployment Insurance because the workforce was and is still dominated by employees nearing retirement. These employees represent a valuable pool of expertise, which shrank suddenly in 2002 – and which will continue to shrink over the next 5 to 10 years as staff nears retirement. Transition and succession planning is required at every level of the organization in order to manage the departure of experienced staff and to enable the next generation to grow into roles more easily. A lack of successful transition management has been evident in the staffing gaps and delays in replacement of staff over the past six months.
Impact of ERI has highlighted human resource management issues … Delays in recruitment exacerbate the impact of the July 2002 early retirements Recruitment need identified within UI Assistant Commissioner approves Chief of Staff approves CFO for DOL approves Office of Human Resources logs Head of DOL personnel approves Deputy Commissioner’s secretary receives, presents to Deputy approves Office of HR logs approval & sends to Chief of Staff Deputy’s secretary notifies Office of HR notifies Division Recruitment approval process Several managers interviewed identified the approvals process as a major delay to recruitment. Recruitment can begin – min. 6 weeks
Impact of ERI has highlighted human resource management issues … Training is widely identified as insufficient • UI specific training is provided by UI specialists – no dedicated UI training staff within the Division (TRU staff not 100% dedicated) • No training beyond initial induction for majority of staff • On-job training defaults to over-stretched supervisors • No training paths for staff • Limited initial training for many staff • Need to improve training for adjudicators particularly flagged • Training is not assessed for effectiveness • Staff no longer have allocated training hours • Annual performance reviews (PAR) can require staff to undertake training – but does not mean that the appropriate training will be available • Training has historically been scheduled as an add-on to project implementations In addition, many interviewees reported that procedures, organizational changes or new ways of working could be better communicated
Mixed culture of old and new wave employees… The Division has mixed feelings about change Change threat Change agent (stronger) Some, maybe 30%, of staff are more change resistant • initiative fatigue • will continue to work as before Many staff - the new intake in particular - are more welcoming • Change resistant Change agent (weaker) keen to see system improvements in particular • no history of how UI was delivered previously Continued staff involvement and buy-in is key to successful modernization; this will become harder as new projects create feelings of ‘churn’
Organization does not fully align or enable a single, clear vision NJDOL UI contains committed and hard working people; however it is not able to meet its time-lapse and quality targets or to reconcile its finances fully We have found many opportunities to modernize NJ UI to work efficiently and effectively and to improve its overall performance and customer service Strategy Processes People Organization Technology needs to be clearly defined – with a change program agreed can be made more efficient and accurate make the system work, but need more support does not fully align or enable a single, clear vision constrains Division business effectiveness Organization aligns to a number of visions UI management is historically centralized
The UI organization aligns to a number of visions … The Division of UI’s structure demonstrates competing service delivery visions pulling in different directions. None has yet won Example 1 – Centralized vs. local provision Remote call centers provide an opportunity to consolidate access to services, make efficiency savings and provide consistent, improved customer service. Some States – for Utah and Colorado - have consolidated to a single call center and single adjudication center. (Even more have created a single phone number to service the whole State). New Jersey planned for four call centers and ultimately implemented three separate centers covering the North, Central and South regions (without the ability to share workload across the regions). Each has a separate phone number. Adjudication Centers have been subject to an even more limited consolidation – moved away from One Stops to allow for specialization but remaining local. In total New Jersey has 10 separate Adjudication Centers.
The UI organization aligns to a number of visions … The Division of UI’s structure demonstrates competing service delivery visions pulling in different directions. None has yet won Example 2 – Phone vs. in-person service provision The need to maintain multiple access channels, so that customers can choose the means of access to UI services – phone, in-person or web - is undisputed; however current practice encourages a mix of the two: • standard process requires a claimant to enter an initial claim on the phone – but may also require the claimant to attend a One Stop, if pay stubs or other evidence is required • another standard process encourages adjudicators to recommend that a claimant should make basic inquiries at a One Stop rather than by phone (notwithstanding the high volume of calls currently inundating the RCC) • continued claims certification can be required either by phone or mailedin form, dependent on the benefit program (and part of State, currently)
The UI organization aligns to a number of visions … The Division of UI’s structure demonstrates competing service delivery visions pulling in different directions. None has yet won Example 3 – Enabling reemployment vs. delivering benefits The One Stop concept – in part – is intended to make it easier for customers (in the case of UI, recipients of unemployment benefits) to avail themselves of other relevant services through joint presentation of the different services. Joint presentation of services also takes different forms in different One-Stops, depending on the state of development of the particular office. However, joint presentation of services has not been applied to other parts of the UI and Workforce New Jersey systems.
The UI organization aligns to a number of visions … The result is a confusing combination of units The current state of the organization – in transition from old to new structures – is creating some confusion: • ‘Local office’ as a term continues to be used – as a catch-all for all types of office • Across the Division, people are unsure whether certain offices still exist, or what role they now play - for example, the Appeals Tribunal reports that they spend hours trying to locate claim files • Offices vary as to whether they have yet adopted the new model – fully or in part
UI Operations is historically centralized… Operations management is historically centralized at Assistant Director level and above Field perception is that micro-management has reduced but that procedures and operations policy can still constrict local issue resolution
UI Operations is historically centralized… Centralized control limits authority and accountability for service delivery at lower levels Issues Field managers have no resource or budget discretion to address workload peaks and valleys, or for issue resolution Limited ownership of each office’s performance by office managers (constrained by lack of meaningful performance information and tools) Limited involvement of field managers and staff in development of new projects, systems or procedures Results Disillusionment in field, feeling that Trenton doesn’t listen – for example, the problem of overlapping regional boundaries Limited focus on improving own performance Limited creativity in issue resolution (However, some offices go their own way anyway through frustration…)
Technology constrains division business effectiveness NJDOL UI contains committed and hard working people; however it is not able to meet its time-lapse and quality targets or to reconcile its finances fully We have found many opportunities to modernize NJ UI to work efficiently and effectively and to improve its overall performance and customer service Strategy Processes People Organization Technology needs to be clearly defined – with action plan & projects agreed have evolved over time, becoming suboptimal have made the system work, but need more support does not fully align or enable a single, clear vision constrains Division business effectiveness No overall IT strategy; unclear IT ownership and accountability Current IT applications and architecture are inflexible Information is in more than one place and inconsistent IT projects have inadequate governance, control and alignment
No overall IT strategy; unclear IT ownership and accountability UI does not have an overall IT strategy driving architecture No single IT strategy or vision for UI Division l there are different IT visions for UI from OIT and DIT UI Division’s IT architecture decisions are decided on a case by case basis l leads to complications with operational support and maintenance of systems e. g. problems with RCC application due to its individual architecture approach maintains enhancements of two architectures, with associated additional support costs Limited development of strategic, shared components l leading to overall more complex and expensive to manage IT architecture No single ownership and responsibility for overall design and IT strategy
No overall IT strategy; unclear IT ownership and accountability UI obtains IT services from three main IT service organizations State Office of Information Technology (OIT) services for UI l l l l Provision of LOOPS based IT services BARTS hosting; Web payments Management of LOOPS end of interfaces for all applications connected to LOOPS Garden State Network (WAN) and some LAN segments Output production services 2 nd line help desk services Department of Labor Division of Information Technology (DIT) services for UI l l l l Provision of UNIX server and desktop based IT services Web claims, FEEDS and RCC applications and environment operational support BARTS configuration; Conversant IVR administration Manage of interfaces to Department of Revenue Tax systems Management of some application interfaces to LOOPS System test and integration services Some LAN segments IT customer support (desktop, server, peripherals, routers, 1 st line helpdesk) UI Systems Management (UISM) services for UI l Provision of business requirements, project management, problem diagnosis and security administration IT services Application and IT support can be unclear between these three organizations
No overall IT strategy; unclear IT ownership and accountability Several issues arise from having multiple IT service organizations IT problem diagnosis can be unclear l leads to problems diagnosing responsibility for application performance problems Different tools and approaches are used for IT diagnosis e. g. took three weeks to diagnose and resolve a configuration change that prevented an automated file transfer from running Differences in control and implementation for IT l Different sets of priorities l Differences in security standards, policies and procedures and the ways of their implementation l Different reporting standards l Different tools in use Difficulties in obtaining the whole integrated picture • Applications are integrated and some are supported by OIT (e. g. LOOPS), while others are supported by DIT (e. g. RCCs) • Network segments can be OIT or DIT responsibilities Accountability for IT problem resolution can be unclear l l UI users have reported problems with getting individual IT organizations to take responsibility / accountability for resolving problems UI users need to determine which IT organization to call resolve problems Who owns responsibility for managing the resolution of a customer’s problem and the required liaison across the different IT organizations?
No overall IT strategy; unclear IT ownership and accountability UI’s IT service organizations have different platforms and skills OIT platforms and skills l l l IBM mainframe platform and Sun Solaris, IMS, DB 2 and Oracle databases Majority of operational support tools e. g. Tivoli, Compuware Web development (e. g. HTML, Java) Some MIS reporting Application development; IT operations skills 950 staff total, approx 30 FTE development staff for UI, additional production and operations staff DIT platforms and skills l l l Sun Solaris platform, Oracle database Windows & NT Web development (e. g. HTML, Java) Conversant administration, some MIS reporting Database administrator; Sun / Windows IT operations skills 90 staff total, 22 FTEs focused on UI support UISM skills l l IBM mainframe, DB 2 and Oracle databases Windows Conversant administration 15 staff This complicates development and management of UI’s IT environment
No overall IT strategy; unclear IT ownership and accountability UI is dependent on key IT staff ä The national average for state and government IT people is 49* l ä UI IT staff would appear close to this profile Key experienced IT staff have been lost and more will be lost as they come up to retirement l The skills base of remaining staff is insufficient to replace experienced staff Division of UI has a dependency on key staff for certain elements of IT program / applications ä ä ä Limited succession planning currently performed *Source: Gartner report
No overall IT strategy; unclear IT ownership and accountability UI’s overall IT costs cannot easily be validated In 2002 fiscal year (last full year for which figures are available), UI’s overall IT costs were: OIT RACS Bills UI Operations (LOOPS) Employer Accounts (TAX) $11. 0 M $1. 4 M DIT UI staff costs (3. 1 FTEs) Overhead (AS&T) charges (40% of $4. 7 M) $0. 3 M $1. 9 M UI Operations IT purchase costs IT software purchase / maintenance (cost codes 34 xx) IT hardware purchase (cost codes 77 xx) IT vendor costs (cost code 36 xx) $1. 3 M $2. 0 M $0. 6 M UI Systems Management staff costs UI SM staff costs $0. 9 M Employer Accounts IT costs IT software purchase / maintenance Tax system maintenance (cost code 34 xx) Tax system maintenance (cost code 36 xx) IT hardware purchase (cost code 77 xx) $0. 4 M $0. 02 M TOTAL (for 2002) $20. 62 M These costs cannot be easily validated, because the detailed make up of some of these charges is not fully clear The 2003 figures are still being finalized; however the total level of charges is likely to remain similar
Current IT applications and architecture are inflexible The UI application architecture has evolved over time Mainframe 1. LOOPS initially developed as the main application in UI Mainframe 2. LOOPS enhanced to provide new services 3. Cost, resources and competing demands result in new services starting to be built on new technologies
Current IT applications and architecture are inflexible LOOPS is a reliable but inflexible core for UI’s business In 2002, LOOPS reliably handled almost 700 K claim applications However, its technology is ageing and becoming obsolete This limits the ability to enhance it, compared to more modern application technologies This inflexibility will become an increasing constraint on UI business processes
Current IT applications and architecture are inflexible Applications are tightly interlinked, complicating change Almost all applications interface to LOOPS as a hub. In addition several of applications also have direct interfaces with other applications. Any change to the applications (or LOOPS) needs to take account of these direct interfaces
Current IT applications and architecture are inflexible Application business process logic cannot easily be changed… In comparison with typical technology solutions available today (Rules Engines, XML, Object Orientation, etc. ) UI’s core system applications (particularly LOOPS) cannot be quickly or easily changed For example, modern technical architecture approaches emphasize a modular approach – where data and business functions are defined in discrete modules that are reused across the entire system. l In the development methodologies used when the core UI Systems were created, business rules were hard coded into the each application. This situation: – Lengthens the time needed make to enable a business change – by the need to go into multiple programs to make a change – Lengthens the time needed to test impact on individual programs and on total interfaced system – Requires that the programming staff has extensive knowledge of the programs and their interfaces. Because this knowledge is held by a small number of technical staff, changes are gated by the number of knowledgeable resources Business process improvements are constrained by these factors
Current IT applications and architecture are inflexible Problems integrating the separate IT architectures There are two separate application architectures in use in UI l l Mainframe based and UNIX server based Updates to business processes can require coordinated updates to both of these architectures The two separate IT architectures are not well integrated l l l e. g. two security systems, different file formats this also complicates changes to applications inefficient screen scraping, for RCC applications that can require manual access to LOOPS when problems occur These two IT architectures are mainly integrated through ‘off-line’ data (file) transfer mechanisms l l l this approach limits seamless ‘real time’ integration during a business process this forces users to log into different environments to complete a business process the only ‘real time’ integration provided between the different IT architectures is through the limited web enabling approach
Information is in more than one place and inconsistent The same information is in more than one place and inconsistent We found several examples of shared information being held in multiple applications… l Claimant addresses are stored in at least 14 applications LOOPS, LOOPS Statistics, ACES (child support), 4 F Disability, BARTS, DABS, ACES/CAPS, OSOS, WDP, CTTS, TRA, 1099 G Processing, RIC, BAM/QC l Employer addresses are stored in at least 15 applications TAX, LOOPS, ALPHA, Secure File Transfer, DABS, ACES/CAPS, WDP, OSOS, CTTS, Wage Reporting Crossmatch, TRA, BARTS, 4 F Disability, BAM/QC, B 187 …with different formats being used for addresses in different systems The business process impact of this duplication of information is that users have to log onto different applications to manually reconcile inconsistencies between these multiple copies of the same information In addition, any future consolidation of systems will require a complex data cleansing process
Information is in more than one place and inconsistent Information updates are not coordinated There are limited mechanisms for notifying applications that shared information has been updated l l Hence copies of information rapidly become inconsistent This problem is exacerbated by the large number of duplicates of data in UI’s applications In addition, applications contain their own change history for information l Hence users cannot see a single consistent view of change history An example of the issues caused by lack of information update control is that management of employer / Department of Revenue wage data submission does not follow UI regulations l l l Wage data can also be changed in several places, leading to inconsistencies Wage data is presented to users in different formats, complicating the process of reconciling issues Changes made by UI are not passed back to Department of Revenue
Information is in more than one place and inconsistent Information definitions are not coordinated There is no overall consistent data model for common information l l Different applications use different formats and validation rules for addresses There is no standard model for how related information is to be linked At State level a data warehouse architecture and high-level data model has been defined l l l State data model is too high-level for UI division internally No UI Division level data model has been defined DOL have not adopted the State data warehouse architecture For Federal reporting data, Research & Planning are starting to convert the Federal Reporting Validation Handbook into a data model l The impact of this has not been widely assessed
Information is in more than one place and inconsistent Financial information cannot be reconciled LOOPS was not developed with accounting principles in mind l l l allows manual updating of financial figures (e. g. wage claims process) does not maintain full audit trail information (e. g. , changes made under A 250 access can be identified in a special report, but not associated with a claim ‘account’) E. g. , daily Federal Income tax reports do not always reconcile Without a clear audit trail, financial information cannot be reconciled The level of reconciliation has improved in recent years – but only with significant manual effort. A small percentage of LOOPS charges remain unreconciled annually. Instead: The LOOPS system should reconcile to the cash and charges that are being disbursed and/or collected The UI General Ledger should interface with LOOPS, so that all financial information is reported accurately and in a timely manner
IT projects have inadequate governance, control and alignment UI IT projects require the involvement of many stakeholders Other applications Other change initiatives Enterprise system Network design management UI IT Project Other business Security units Enterprise Testing / QA system management Often projects do not communicate with or involve stakeholders early enough l l e. g. UI tax application did not consider integration requirements with LOOPS early enough e. g. ACES project has suffered problems with network capacity Hence projects run into problems later in the project life-cycle this is when issues are typically more difficult and expensive to fix
IT projects have inadequate governance, control and alignment Business and IT project governance and coordination unclear IT projects are often influenced by political pressures; this helps encourage a culture of informal project initiation and delivery l l unclear prioritization and management of overall UI project portfolio inconsistent long term prioritization of projects No clear coordination mechanism for projects to ensure that design decisions are consistent with other projects across UI l can lead to conflicting architecture choices across the different IT service providers No overall formal project governance mechanisms l l e. g. gateway review process / stage authorization are applied inconsistently encourages inconsistent approaches to project governance Limited formal project acceptance criteria and procedures l e. g. user acceptance, pre-production, post deployment phases No post-implementation evaluation of project benefit delivery and lessons learnt UI business users do not have adequate governance and control over IT projects
IT projects have inadequate governance, control and alignment Example issues arising from lack of consistent IT standards Limited single-sign on capabilities for users l l Users need to sign into individual applications Separate sign-on credentials for mainframe and server based applications No overall framework for administrating user security and roles Lack of single-sign on impacts the current RCC claims process, where users need to frequently log in and out of the RCC and LOOPS applications Applications are not consistently monitored and controlled l l l No regular reporting, analysis or forecasts (e. g. capacity, peak loads) Different monitoring technologies used for different applications, leading to inefficient problem detection This is an increasing issue as more applications deployed within UI Server based applications have information back ups but not full site disaster recovery facilities l l Mainframe environment (LOOPS) does have site disaster recovery facilities available The OARS project aims to provide full disaster recovery - by July 2004
Priorities going forward Strategy Processes People Organization Technology needs to be clearly defined – with a change program agreed can be made more efficient and accurate make the system work, but need more support does not fully align or enable the strategic vision constrains Division business effectiveness The strategic vision must be clear, to drive process, people, organizational and technology change decisions Real timeliness, quality and customer service improvements will only be achieved if NJDOL UI is prepared to address all of the factors detailed in this report Be prepared to think in terms of fundamental change
Priorities going forward… Lay the groundwork for change To enable UI Modernization to deliver real change, the Division must be prepared: Immediate actions for senior management • Clarify the strategic vision – and ensure management share that vision • Agree IT management responsibilities and accountabilities, ensuring that an overall design authority is appointed Management actions already underway, key to UI Modernization • Address the immediate need for extra resources in units • Train new staff so that the quality of claims handling settles at an acceptable level Ongoing UI Modernization team action • Continue communicating with staff – what’s going on and why Successful change needs a stable base and a clear vision
Priorities going forward… Priority themes for delivering change in UI The findings of the Baseline Description suggest that the following key themes should be explored in the next phase: • enabling accurate early decision making (‘right first time’) • improving automation of claims processing • information sharing • improving customer experience for claimants • local accountability and responsibility • resource management • framework of business design principles that will allow for future flexibility in policy changes These themes will guide the team’s approach during the development of the conceptual business architecture
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