Welfare Bill Opens Doors for Integrators

Federal funding will unite disparate state and local legacy systems

In signing the new welfare reform bill, President Bill Clinton and the Republican Congress not only expect to change "welfare as we know it," but also expect to change the role information systems have played in human services departments for two decades.


According to language in the bill, the federal government will direct $400 million, which will be matched by state and local governments, to fund systems integration efforts designed to unite program automation initiatives undertaken over the past 10 years. It will also facilitate the management of the new block grant model for administering entitlement programs.

"This [welfare reform] is the kind of program initiative that will force federal integrators into the state markets," says Linda Cohen, research director with Gartner Group, Stamford, Conn. "Right now they are not running into this market because it is so fragmented. Many are contemplating entry, but they don't quite know where to get started," Cohen said.

By the time ancillary costs and collateral investments from community and interested third-party organizations are taken into account, as much as $1 billion could be spent over the next five years on integrating disparate legacy systems.

"In general, you could describe the current human services environment, of which welfare is a major piece, as a series of silo-based programs," says Bob Carlson, segment executive for human services at IBM worldwide government industry. "Due to the funding structures and the programmatic philosophies that have developed over the last 20 years, large programs have become self-contained silos... each with its own way of tracking and dealing with welfare benefit recipients," he says.

In other words, because state and local welfare programs were driven by categorical models created in Washington, funds earmarked for any given program -- for instance, Aid for Families with Dependent Children -- were discouraged, if not outright forbidden, from commingling with funds directed toward another -- such as child support services. During the late '80s and early '90s when efforts were launched to make government operations more efficient, each program within a state human services department received its own automation funds.

Bud Wessman, executive director of Human Services for North Dakota, said the result is that states today have a myriad of dedicated systems designed to support specific programs with little or no thought given to inter-departmental communications.

"In North Dakota we had 45 different systems functioning in the department, and we simply could not talk to each other," said Wessman. This was despite the fact that typical recipients participate in more than one welfare program. As the national welfare debate got started in earnest in the early '90s, states experimenting with the delivery system began to realize that systems integration would play a key role in moving away from the programmatic model toward a more holistic approach that recognized the full range of a welfare recipient's needs.

"The movement toward this holistic case management model changed the emphasis from treating the family unit in discrete parts to understanding the needs of the family and coordinating the delivery of services more effectively to achieve an outcome -- making families self-sufficient," says Carlson.

"We do not just want to become the most efficient operational model to deliver services, but really shift our focus on whether we are achieving the sorts of things the programs are supposed to achieve," he says. Consequently, more states are examining the role that database management systems, work group applications, data warehousing and client/server networking technologies will play in this new model.

"I have drawn the analogy of the service delivery in social services as being a vehicle for welfare reform, and automation as the engine of welfare reform. In my opinion, you can't reform the system or change it in any way until you change the infrastructure or build the engine," explains Wessman.

North Dakota has launched an ambitious and technologically sophisticated $12 million project called Respond that re-engineers human services programs by implementing expert systems to help case workers quickly navigate through complicated eligibility rules and build case plans that can become the basis of a contract between the state and welfare recipients. It also uses a distributed computing model providing welfare workers, mental health professionals and other key members of the delivery system with access to vital information on recipients' progress.

"If we are really going to do something like a new social contract with this welfare reform, where each party -- the deliverer and the client -- has responsibilities, we need new tools. After going down the list on the expert system, you can print out a contract that meets the clauses that you have talked about. The automation system not only has the ability to refocus [our efforts], but it begins the process of directing clients toward self sufficiency," says Wessman.

Results from a study released last week by Andersen Consulting, Chicago, indicate that the holistic approach North Dakota and other states are taking will become more of the norm and less of the exception over the next few years.

In a survey of 151 state government human services leaders from 49 states, 83 percent of those polled said their organization already is, or will soon be, addressing welfare reform to some degree. Specifically, 75 percent of agency leaders polled said they are redesigning their existing processes. Some 79 percent of respondents said they are already updating or integrating their computer systems. Moreover, a majority of respondents indicated that their organizations will evolve from being direct providers of welfare services to arrangers of third-party services in the next five years.

"This fundamental shift in government's role demands a fundamental shift in human service organizations' structure -- from people to processes to technology," says Robert Tyre, a managing partner with Andersen Consulting's government practice.

It also means that, beyond solidifying interdepartmental links, human services organizations must open their systems to organizations outside of their departments, and even outside of the government itself.

"They will also have to work effectively with the local community-based organizations such as the Red Cross, the United Way and other non-profit organizations like churches," says Carlson. According to Steve LeCompte, Hackensack, N.J.-based International Data Corp.'s vice president of government markets, this will result in substantial investments in exploring Internet and intranet technologies.

"The focus on the Internet will help impose a level of standardization that will facilitate interorganizational communication among welfare delivery systems. This will lead to more integration across programs and even across states," he says.


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