Recession fuels demand for modernizing human services systems

The economic climate might be creating headaches for state and local agencies, but the growing need for human services will create new opportunities for systems integrators in 2010, said Rishi Sood, vice president of research at Gartner.

Sood said he expects a renewed focus on large-scale technology modernization of women, infants, and children (WIC) programs; case management systems; unemployment insurance systems; and child support enforcement systems.

That’s in contrast to 2009, when human services workers were so overwhelmed by the unprecedented demand for services because of the recession that “there was a notable drop-off in human services modernization activity,” Sood said, noting that human services remains the second largest area of technology spending in the state and local government market.

Several factors are behind this new push, he said. Child support enforcement has received new federal guidance and dollars to support upgrades. WIC programs also can apply for $500 million in American Recovery and Reinvestment Act grants to modernize program tracking and administrative systems.

Case management and unemployment insurance systems, meanwhile, were already an area of major modernization activity before 2009. Now with block grants from the stimulus law and additional funds in the president’s budget, human services agencies have been able to alleviate some of their operational pain and get back to those modernization efforts, Sood said.

Another area in which states are likely to begin building is integrated eligibility systems that cut across several programs to improve efficiency and cut costs, such as the Los Angeles Eligibility, Automated Determination, Evaluation and Reporting Replacement System, a contract out for bid that will consolidate several county eligibility systems into one.

However, state and local agencies want integrators to provide integrated systems that are scalable enough to accommodate sudden influxes of enrollees but also flexible enough to deal with changes in program guidelines.

HP Enterprise Services, for example, won a $123 million extension in February to its contract for the California Welfare Client Data Systems Consortium’s CalWorks Information Network. As part of the new effort, HP will implement Web-based technologies to enable self-service capabilities and a system design that allows agencies to more quickly and easily add program types or change benefit criteria.

Sood said systems integrators should look seriously at targeting human services systems, especially WIC modernization efforts, this year. “It’s a modernization curve of 10 to 15 years, but it’s an area that is really building in importance,” he said. “And unlike Medicaid business process outsourcing, which is very large but highly competitive, WIC is relatively small but really wide open for new domain experts to move into.”