This report examines the Social Security Administration’s (SSA’s) proposed e-government strategy and provides advice on how the SSA can best deliver services to its constituencies in the future. The assessment by the Committee on the Social Security Administration’s E-Government Strategy and Planning for the Future was based on (1) its examination of the SSA’s current e-government strategy, including technological assumptions, performance measures and targets, planned operational capabilities, strategic requirements, and future goals; (2) its consideration of strategies, assumptions, and technical and operational requirements in comparable public- and private-sector institutions; and (3) its consideration of the larger organizational, societal, and technological context in which the SSA operates.
CHALLENGES AND OPPORTUNITIES FOR THE SOCIAL SECURITY ADMINISTRATION
The SSA’s operations are extensive—one or more of its programs touch the lives of most Americans, from the almost 160 million workers who pay Social Security taxes on wages, to the nearly 50 million people who receive benefits under the Old Age and Survivors Insurance program, to the roughly 8 million disabled individuals and eligible family members who receive benefits under the Disability Insurance program. The SSA also administers the Supplemental Security Income (SSI) pro-
gram and makes needs-based determinations of eligibility for payments under the program.
The SSA faces demographic challenges and growing public expectations as it conducts a broad scope of activities, services, and interactions. It is predicted that the SSA’s workload will increase sharply as the baby boomers—the large cohort born during the 1946-1964 period, sometimes called the Silver Tsunami—reach retirement or become disability-prone. For example, the number of people filing for retirement annually has increased by 500,000 since 2000, a 25 percent increase.1 At the same time, like other federal agencies with an aging workforce, the SSA is facing a projected brain drain. A substantial number of the agency’s most experienced employees (who best understand the complex benefits-determination processes and the agency’s large and complex technology infrastructure) could retire at any time.
Today, public contact with the SSA largely takes place face to face at its field offices, by phone through the teleservice centers, or through the mail (for example, Social Security statements are automatically mailed yearly to workers over the age of 25). These activities are labor-intensive; over 60 percent of the SSA’s employees (located mainly in field offices and at teleservice centers) deliver direct service to the public, and another 30 percent (in the regional offices, processing centers, and headquarters) provide direct support to those front-line workers.
Some sectors of the economy have seen a broad push toward online services as both a complement to and a substitute for traditional service-delivery mechanisms. For reasons including cost-effectiveness and enhanced customer satisfaction, many commercial organizations today are offering online, e-business services, often 24 hours a day, 7 days a week (24/7), 365 days a year. The growing adoption and use of such services reflect the emergence of a suite of information technologies capable of supporting online services and a general public that has a rising level of comfort and familiarity with the Internet and other information technologies in personal, social, and commercial contexts and that increasingly expects both firms and government agencies to provide online information and services.
As they do for commercial enterprises, online services offer the SSA an opportunity to improve its operational efficiency and to increase its total service capacity—in particular, to cope with its growing workload at a time when it is facing its own retirement wave. The technologies for providing online services have reached a sufficient level of maturity to
Mary Mosquera, “Case Files Travel Lighter, Faster,” Government Computer News, Oct. 9, 2006, available at http://www.gcn.com/print/25_30/42177-1.html, accessed June 14, 2007.
enable the realization of this goal. Additionally, many in the new wave of retirees are likely to be computer-literate and Internet-savvy (and to retain these traits after reaching retirement age); they will thus be more adept and frequent users of online services than were previous generations of SSA beneficiaries. This does not mean that the SSA should go to all-electronic service, but it does mean that a larger proportion of its clients and beneficiaries will be able to use, and may even prefer, online service channels—paths through which they can accomplish their goals—to the extent possible.
Indeed, the SSA uses a range of online services as a complement to the traditional service-delivery channels, and it looks to information technology (IT) to help provide services to its varied user communities: clients (current and prospective SSA beneficiaries), the general public, and partners such as the states and other federal agencies, along with various types of third parties (such as third-party representatives, representative payees, employers that pay workers’ payroll taxes, and so on). However, the SSA currently does not strongly promote online services as an alternative to traditional service-delivery channels. In addition, with respect to the SSA’s e-government initiatives, the focus of this report, responsibilities for software, hardware, and support for providing electronic information and services are split across the domains of several SSA Deputy Commissioners.
Finding: The SSA’s organizational structure does not support the establishment of a strategic focus in electronic services that is sufficiently high-level and broad-based. The SSA has an opportunity to be more proactive in fundamentally reassessing its customer service value chain and, for as many customers as possible, focusing on the potential substitution of electronic services for other delivery channels, such as paper mail and face-to-face interactions in field offices.
Recommendation: The SSA should make an unambiguous, strategic commitment to electronic services as part of its long-term service-delivery strategy, placing a central emphasis on electronic services that encompass timely and up-to-date information for users, partners, and beneficiaries.
LEARNING FROM THE EXPERIENCES OF LARGE FINANCIAL INSTITUTIONS
Although the SSA is in some ways a distinctive institution, in many respects its activities, information technology, and other operational characteristics resemble those of large financial institutions (banks and
brokerages). These institutions maintain a very large number of accounts and receive and make a high volume of payments. They usually conduct transactions in multiple customer segments (individual retail customers, businesses, other financial institutions, and so on) and through multiple service channels (online, through automated teller machines and branch offices, through call centers, and so on). The analogy is also apt in terms of IT requirements; the databases maintained by the largest of the private-sector institutions are now quite comparable, both in size and in transaction volume, to the databases for which the SSA is responsible.
The financial services community has been one of the most aggressive and competitive in using IT and electronic commerce, and banks and brokerages have made significant investments in developing their online service channels. The business case for doing so is composed of multiple elements: customer satisfaction, customer retention, new-customer acquisition, cross-sales of other products to existing customers, and the economic trade-offs between cost reduction (including savings from reduced error rates and from not needing to redo work to correct errors) and the comparative cost of delivering online services. In particular, the cost per transaction differs greatly among service-delivery channels, by some accounts by an order of magnitude.
Because of these advantages, banks aggressively market online services to attract customers to these channels and to retain customers in them. Experience has shown that the successful introduction of electronic services leads to customers’ use of other available electronic services, thus compounding the benefits of the investment in such services. A satisfied user of one online service is more likely to seek out similar services in order to avoid long telephone queues or paper-based cycle times.
Importantly, even as they have greatly increased their emphasis on online operations, banks have not abandoned their branch offices or call centers. Rather, they consider online services as one important aspect of providing services and continually balance and rebalance their portfolio of service offerings. Indeed, banks still make heavy use of call centers for servicing customers—although the call centers themselves have been transformed. With the convergence of voice and data (Voice over Internet Protocol, or VoIP) and the use of speech recognition, these call centers are becoming very heavily automated and very cost-effective. Banks are exploring in which situations to have self-service and in which it is desirable to have human agents, as well as experimenting with collaborative Web sites that can draw on assistance from human agents. For example, for simple transactions and information access, self-service is offered; for more complex transactions and cross-sell opportunities, more direct interaction with humans is used. Analogously, the committee does not suggest that the SSA should offer online services exclusively, but that it should be
prepared to balance and rebalance its service channels in order to meet its efficiency and effectiveness goals and the expectations of its public.
The SSA might not be able to—or want to—use “as is” all of the approaches and solutions pursued by other institutions. The committee believes that there is nonetheless substantial value to the SSA in considering what might be learned and what might be adapted or applied as a result of studying appropriate analogous organizations—of which financial institutions are a leading example. Although the SSA’s operations, customer base, and transaction patterns are not identical with those of a large financial institution, the committee believes that examination of the commercial financial services industry’s experience, market research, and product-refinement knowledge would be useful to the SSA and to other government agencies seeking to make more comprehensive and effective transitions to online services.
Finding: The experiences of large-scale financial institutions in transitioning to the provision of electronic services are instructive in considering the challenges faced by the SSA in formulating its medium- and long-term electronic services strategy.
Recommendation: The SSA should carefully consider the ways in which the experiences and approaches of large-scale financial institutions—including state-of-the-practice electronic information and service delivery, metrics-guided improvement, and process transformation, among other approaches and solutions—might be relevant to the kinds of services that the agency is providing or may provide in the future.
The strategic and management approaches that financial institutions have adopted to launch and develop online services are also especially instructive. In the largest and most successful financial companies, commercial management and organizational structures for online services have gone through three phases:
In the first phase, which for most banks was 1996 to 1998, multiple “e-groups” were emerging in the organization. The primary focus was often in marketing and communications organizations, as the chief use of Web sites was to market services rather than to provide them.
In the second phase (approximately 1999 to 2002) “e-business” was paramount. Centralized, autonomous e-commerce lines of business—reporting very high in the organization—were formed with virtually end-to-end control of the e-channel. This seems, in retrospect, an almost necessary step to developing a sophisticated strategy, infrastructure, and set of policies for electronic service provision.
In the current state of maturity (approximately 2002 to the present), the motto appears to be “e-business is business,” and electronic services have become reabsorbed as integral parts of the organization’s lines of business.
Note that this progression, which the committee believes closely mirrors the processes that the SSA will need to follow, is characteristic of institutions that have had to undergo significant transformation to take advantage of electronic service provision. (Note also that the strategy and evolution of companies that were Internet-based from the outset, such as Amazon or eBay, hold fewer organizational lessons for the SSA because they have not had to revamp their technology, operations, and organization.)
The SSA’s management and organizational structures for electronic services and e-government have not yet moved to the second phase of electronic services maturity. When moving from the first to the second phase in this progression, the large-scale financial institutions referred to above established centralized focal points for electronic services. These focal points typically reported very high in the organization. The committee believes that the SSA should follow a trajectory similar to that described above and that the development and management of electronic services should be centralized and elevated in the organization.
Finding: The SSA’s present direction diverges from the three-phase progression that large financial institutions have followed in successfully developing and launching electronic services.
Recommendation: In order to move to the second phase of electronic services maturity, the SSA should create a focal point responsible for developing and managing electronic information and service delivery—including components such as Web content, online transactions, user interfaces, research, database systems and other key enabling technologies, and other facets of electronic service delivery that are currently dispersed throughout the SSA. This focal point should have sufficient resources to take on organization-wide responsibility for online services and should report directly to the SSA Commissioner or to a Deputy Commissioner.
TECHNOLOGICAL LEGACY POSES RISKS AND HINDERS DEVELOPMENT OF ELECTRONIC SERVICES
The SSA’s Master Data Access Method (MADAM) is a database system that was developed in-house by SSA staff in the early 1980s when the SSA
converted from tape to disk storage for its data sets. Although MADAM is still in use today, this system is technologically obsolete and functionally primitive compared with readily available commercial technologies and products; its current status has several important implications.
First, this technology will constrain the SSA as it continues to develop its online services. Relying on MADAM means that the SSA’s systems are not able to exploit modern database access tools and utilities that facilitate support for the full suite of electronic services provided by the private sector. Also, whereas contemporary commercial products support near-24/7 access, information provided to the committee indicates that updates to the central MADAM database are done primarily (if not exclusively) through periodic, lengthy batch updates, which make 24/7 access impossible. Thus, MADAM could be an obstacle to the kind of user acceptance needed to reduce the SSA’s costs of transactions with its growing user community.
Second, although MADAM continues to function, it exposes the SSA to a number of significant risks. The use of MADAM requires that the SSA and its contractors maintain an obsolete, custom system that is built on top of an increasingly antiquated underlying technology base, in which some of the software is written in the Common Business-Oriented Language, or COBOL. Maintaining this system requires very specialized expertise that is becoming increasingly scarce. It is also unclear how easy it will be to continue to find expertise in more-generic but increasingly obsolete software technologies such as the COBOL programming language. Related to this, the underlying programming technology of the SSA’s core systems makes these systems more cumbersome to maintain compared with those implemented using modern technology. Moreover, the continued use of MADAM (and other now-antiquated similar solutions such as Computer Associates Integrated Database Management System [CA-IDMS]) locks the SSA into a single, expensive hardware and software combination, which precludes the agency from taking advantage of potentially lower cost alternatives.
In 1986, a report from the congressional Office of Technology Assessment (OTA)2 alerted the SSA that the technology and technological risks inherent in MADAM make it a serious liability. However, MADAM is still in use. One argument that has been offered for retaining MADAM is that the SSA’s databases are so large that they can only be handled by custom software. Today, however, other enterprises have databases that are com-
U.S. Congress, Office of Technology Assessment, The Social Security Administration and Information Technology, OTA-CIT-311, Washington, D.C.: U.S. Government Printing Office, 1986, p. 43 (NTIS Order PB87-136834), also available at http://www.ssa.gov/history/pdf/ota86.pdf, accessed June 20, 2007.
parable in size to those of the SSA, and commercial database products are up to the task. Another likely reason that the SSA has not moved to replace MADAM is that the migration to modern database technology would be far from straightforward. Indeed, the committee concurs that a migration will be difficult, but it believes that failing to migrate also poses considerable risks and constrains future delivery of online services.
The SSA has been exploring a particular path—to convert the MADAM-resident data sets to a commercially available system, IBM’s relational database system product, DB2, but to avoid rewriting existing applications by changing the database system under existing middleware. The committee believes that the SSA has underestimated the technological risks of this conversion approach and has not fully considered alternative approaches. The SSA’s contractor involved in this effort and the SSA appear to have adopted the philosophy that any MADAM-to-DB2 conversion should have little or no impact on existing applications—that is, the applications would not be rewritten to take advantage of more contemporary software and hardware capabilities. This approach not only limits the functionality of those applications but compromises the design of the new database. The proposed approach would almost certainly cause poor performance, potentially lead to update anomalies, and almost inevitably be the source of numerous long-term complications. Moreover, studies made available to the committee indicate that the SSA’s contractor did not fully consider large-scale relational database management systems (RDBMSs) other than DB2.
To be sure, replacing MADAM would be far from a simple undertaking. The committee believes that the SSA’s current “halfway” strategy would likely result in a working system but that it would also introduce significant new challenges of its own. The committee believes that a strategy involving a total conversion of the databases (using a modern RDBMS) and a rewrite of the application software is likely to yield the best results in the long run. However, such a major rewrite of the application software is itself a risky undertaking. The SSA’s predicament resembles that faced by a number of other large organizations and firms—such as banks and telephone companies—that have had to deal with large, critical systems that used obsolete technology. Like the SSA, they have had to modernize large custom systems that cannot easily be migrated using standard database-migration solutions. The experience of such institutions would be invaluable to the SSA as it seeks to navigate a similarly challenging course.
Without detailed information about the current nature and status of the SSA’s MADAM conversion efforts, the committee did not reach conclusions as to whether any of the SSA’s ongoing conversion efforts should stop. However, it would be a mistake for the SSA to rely on too
narrow a range of technical expertise to plan and/or execute something as central to its operations as the MADAM conversion effort. Not relying on a broad range of technical expertise to architect such a massive conversion effort—and not to fully explore alternative approaches—will make the achievement of successful outcomes more difficult and less likely. In seeking broader technical advice as opposed to advice from a relatively narrow range of vendors and contractors, the SSA might, for example, establish an external advisory board—consisting of experts from the database software industry, several large commercial enterprises (banks and telecommunications companies) that have deployed large relational databases, and academics—to oversee the MADAM conversion effort. Given the national importance of the SSA and its computer systems, it should be possible to attract top technical talent to provide such advice.
Finding: In 1986, the Office of Technology Assessment alerted the SSA to the technology and technological risks inherent in its Master Data Access Method, or MADAM. Today, MADAM and the SSA’s current data-management approach continue to pose increasing risks. The approach faces increasing limits in the availability of staff who understand and can support the SSA’s technologically obsolete, custom solution. In addition, the approach precludes the use of valuable new technological capabilities and requires interruptions in service for batch updates, both of which impede the provision of desirable new e-services.
Recommendation: As it makes decisions about future directions for its database technology, the SSA should give considerable weight to the implications of those decisions for the effectiveness and efficiency of current and future electronic service delivery and should be open to the introduction of new technologies.
Finding: The scope and scale of the challenges that the SSA faces with regard to its database conversion strategy merit the input of a broad range of expertise.
Recommendation: In continuing to develop its conversion strategy and long-term services strategy, the SSA should draw on a broad range of technical expertise—including but not limited to database software experts, software engineers, software security experts, financial services experts, large-scale commercial service providers, and systems architecture experts—and put systematic mechanisms in place so that it can hear and learn from outside advisers.
TOWARD ORGANIZATIONAL TRANSFORMATION
The SSA has been slow to develop and implement strategic service-delivery plans, despite repeatedly being encouraged to do so by outside auditors and experts. The reasons for this are not entirely clear. One contributing factor may be a lack of sustained leadership commitment to this issue over the years. Another may be an organizational culture that is focused on personal, individualized customer service and has had a long tradition of understanding its public and how to serve it best—that is, through personal attention. The cultural mores within the SSA seem to equate electronic or online services with impersonal service without giving due consideration to the opportunity for the SSA to use electronic or online services to respond more quickly, to provide greater convenience, to enhance user satisfaction, to increase accuracy, and to reduce costs. A final factor may involve the prospect that organizational change would also require an updated employee skill mix to support the technological innovation required for the development and implementation of a service-delivery strategy that embraces online services.
Although charting a roadmap for the future under these circumstances may be daunting, the terrain is not completely unexplored and uncharted. The experiences of and lessons learned by other institutions should serve as a useful guide to the approaches that the SSA might take as it expands its electronic service offerings. Moreover, as the following subsections indicate, there are a number of areas in which changes to organizational practice and culture would greatly help the SSA develop and refine its service-delivery strategy.
Balancing Risks and Rewards
The committee’s impression is that the SSA takes a conservative and cautious approach to service provision. Indeed, being subject to constant and intense scrutiny from the U.S. Congress and various federal oversight agencies not unexpectedly causes the agency to be reluctant to assume risk. Yet failing to make needed changes can also incur costs that can eventually outweigh the risks associated with making such changes.
Finding: The SSA may be missing important opportunities to make sustained improvements in its service delivery because of an overemphasis on the potential risks of modernizing its service-delivery strategy and a lack of emphasis on the long-term risks associated with not revamping that strategy.
Recommendation: When evaluating new electronic service-delivery initiatives, the SSA should when appropriate seek to balance risks and rewards by recognizing such upside benefits from automation as cost reduction, fraud prevention, and customer satisfaction.
The SSA’s own internal assessments of its strategies, initiatives, and deployments are ongoing. The identification of appropriate metrics and the continual gathering of adequate measurements needed to ensure effective decision making can be useful in such processes. When organizational goals can be systematically reduced to metrics that are quantifiable (although not necessarily directly monetized), such metrics and measures can be the key components in a program of continuous improvement, as they help demonstrate progress in achieving organizational goals such as meeting the various needs of diverse publics and user communities.
The committee understands that it seems easy enough to simply assert the importance of quantitative measures in managing toward meeting goals, but that putting in place the details of how to do so may be far more difficult. It seems most important, however, that the SSA adopt as a goal the movement toward basing its operations and decisions on this approach. The establishment of effective, agreed-on metrics and measures would provide immediate benefits for the better management of projects, and potentially they could better justify requests for funds for the deployment of electronic services.
In general, metrics and measures should stem from a careful examination of goals that are ultimately quantified. The units of this quantification would be used to identify the metrics. Implementing data-collection processes in the framework of those metrics would yield measures. Engaging in dialogue with managers from other organizations that manage in a metrics-oriented fashion and drawing from their “lessons learned” may be useful. In some cases, organizations find it helpful to engage the services of management consultants and/or to have ongoing dialogues with people who have implemented this approach in related institutions, such as large banks or brokerages.
Finding: The establishment of appropriate metrics and measures to evaluate the effectiveness of various services and delivery channels is an important component of an effective service-delivery plan.
Recommendation: The SSA should define and use metrics and measures to assess and improve its service delivery across all channels, including electronic services.
Large organizations such as the SSA are increasingly deciding that it is unsustainable to maintain in-house all of the competencies that they require in order to meet challenges that are growing in scope and number. Such organizations often make conscious decisions about which core competencies they will develop and nurture in-house and which they will outsource. Given the ongoing transition to and emerging demand from a variety of user communities for large-scale and highly effective electronic services, there may be increased opportunities that the SSA could explore in this area.
In the federal arena, there are precedents for partnering with the private sector. For example, the Internal Revenue Service (IRS) implemented the free file tax program with private-sector partners; in this case the IRS was able to develop the necessary partnerships within existing law and regulation, while in other instances legislative changes were sought and obtained. Other types of opportunities that might prove fruitful for the SSA include partnering with the states to enable the delivery of certified, electronic vital records evidence, promoting standards work involving data interchange, or increased cooperation with third parties regarding advice and counseling in the area of claims filing. Partnership opportunities for some of the SSA’s activities may be possible within its current legislative and regulatory framework. In other cases, new authority may be needed in order to pursue partnership opportunities to enhance service delivery. In the area of electronic services, organizations have often found it useful to consider what their core competencies need to be and then to seek ways to partner effectively to fulfill other functions. In exploring potential partnerships, the committee suggests using an open process that engages beneficiaries, third parties, and other user communities as well as Congress to explore needs and alternatives.
Finding: There are opportunities for the SSA to partner with other agencies and third parties in ways that could provide mutual benefit.
Recommendation: The SSA should undertake to understand the identities, needs, and attitudes of its various user communities and should use that information to establish effective relationships and ongoing interactions with users, potential partners, and third parties. The SSA should explore partnering opportunities and identify the changes and initiatives that are necessary in order for it to enable appropriate interaction and cross-functionality with strategic partners and to support the exchange of data with other government agencies (both federal and state) while ensuring that appropriate security and privacy measures are in place.
The recommendations above are subordinate to what the committee sees as a more general and overarching need: that the SSA embrace change as a constant factor in the way that it does business. Particularly as change continues in the various domains of SSA involvement, it will become increasingly important for the SSA to devote attention and resources to being well informed about the nature and ramifications of these changes, both for itself and for its various user groups, including beneficiaries. Although the SSA does pay attention to change and seeks advice externally and internally, there are opportunities to use that advice more systematically as a basis for sustained and effective action. Broader and more systematic attention to anticipating and addressing change is warranted.
Finding: The SSA faces significant ongoing change—in terms of technology, demographics, and public expectations—as it carries out its activities, services, and interactions with a variety of user communities.
Recommendation: The SSA should embrace change as a constant. It should regularly evaluate emerging trends in such areas as technology (for example, database technologies) and business practices (for example, by learning from the experiences of financial institutions and moving toward the use of strategic partnerships for efficiency and effectiveness). It should also regularly evaluate the changing societal attitudes and expectations of its various user communities. The SSA should also institutionalize the formulation of strategies for addressing these trends.
Although the challenges outlined in this report are numerous and sizable, the committee is confident that they are not insurmountable for the SSA. Throughout the course of the committee’s work, it has been clear that the SSA and its people are firmly dedicated to meeting beneficiaries’ needs with enthusiasm and professionalism. Their dedication to their mission seems absolute and unwavering. This report is offered in the spirit of advice to dedicated professionals about how they address the opportunities that exist for meeting continually growing challenges.