Government IT: Fixing Service Delivery to Put Customers First

State and local government IT departments are updating human services systems to reduce inefficiencies while helping an increased number of needy citizens. Success depends on agencies aligning new technology and business processes with customer, rather than employee, needs.

When you orient both IT and business processes around customers instead of product lines, the theory goes, you develop a crisp, clear picture of how your clients behave. Companies can then use that information to anticipate needs, detect dissatisfaction and offer the right products and services when they will be most welcome.

One problem that prevents many organizations from devising customer-focused processes, however, is the difficulty of integrating data about those customers from various business silos. When Bank of America bought mortgage lender Countrywide Financial in 2008, the bank quickly changed the logo on homeowners’ monthly mailings. But former Countrywide customers still can’t check their BofA bank balances when they call with a mortgage question.

State and local governments, which run some of the most stovepiped organizations around, have begun to adopt a customer-first philosophy, notably in their health and human services agencies. People seeking help with food, jobs, housing, medical care and other benefits are usually pushed through a maze of separate offices, separate staff, separate paper forms and, when they exist, separate computer systems. The current unprecedented demand for these services has highlighted the shortcomings of many of these systems.

Nationally, 34 million people received food stamps last year, up 19 percent from 2008, says the Department of Agriculture (USDA). Nearly 10 million people lived in subsidized housing in 2008, up 13 percent from 2000, according to the Department of Housing and Urban Development. The inefficiencies in delivering these and other services, meanwhile, are costing taxpayers millions at a time when states are expected to rack up budget deficits totalling $375 billion through 2011.

States trying to eliminate these inefficiencies have found new enthusiasm at the federal level for investing in IT, plus stimulus grants and other new sources of money to fund projects. For example, the Department of Health and Human Services (HHS) pooled some of its stimulus money with that of the USDA to reimburse states 80 percent of what they will pay to provide food for needy families this summer. HHS is also using stimulus funds to help states pay for Medicaid.

But the same obstacles that hinder corporate IT projects also appear in the government realm, with perhaps more devastating effects. Questions of alignment and scope are critical to what some IT leaders view as the ultimate customer-facing project. “If you don’t provide optimum customer service in the private sector, you lose revenue and margins go down,” says Atefeh Riazi, CIO of the New York City Housing Authority and former Global CIO of Ogilvy and Mather Worldwide. “In government, it’s a higher calling.”

“Everyone wants to do the most good for the most people but sometimes there’s disagreement about which way is best,” adds Sarjoo Shah, director of the data services division of the Oklahoma Department of Human Services. Disagreement over the size and pace of a project, Shah says, could derail the work. Meanwhile, the customers—individuals in need—become victims of inefficient, even harmful, processes and systems.

‘Oblivious to Each Other’s Efforts’

The influx of people seeking government services has overloaded creaking, flawed systems in Texas, Indiana and other states. Backlogs and other problems are potentially dangerous to people waiting for help, and are embarrassing to the political leaders who are supposed to provide that help. Texas, for example, has been sued for not processing food stamp applications within 30 days, as federal regulations require. People in Dallas and Houston, in particular, have had to rely on food pantries. “As demand for services has increased, states are looking for ways to make the delivery of benefits more efficient and accessible,” says Susan Golonka, a program director at the National Governors Association’s Center for Best Practices.

State spending on human services programs totals $412 billion—about 27 percent of state budgets nationwide, according to the Rockefeller Institute of Government. IT leaders are pressured now to reduce the administrative costs of those programs, says Shah, while improving how they run. Shah is managing both small and large projects that support Oklahoma’s service delivery reforms. The state recently launched a Web portal where residents can check their eligibility for food stamps and, later this summer, apply for them online. The state is also overhauling all of its human services systems. The multimillion dollar, 8-year project, called Mosaic, would provide a Web-based system to replace siloed systems that prohibit data-sharing among programs that provide child and family support. The expected benefits include eliminating redundant data and the costs associated with collecting and maintaining it, as well as cutting IT maintenance costs.

But getting financial returns isn’t the only motivation for integrating services, Shah says. In human services, customer centricity is not, as it is in the private sector, about convenient cross-selling. It’s about cross-serving, so that people may live better. Or simply stay alive.

Consider the case of the Jacks family in Washington, D.C. The mother, Banita, had been sharing an apartment with her four dead daughters for about seven months before their bodies were accidentally discovered. In January 2008, the family’s subsidized row house was being foreclosed, and federal marshals were ordered to evict the tenants. When the marshals entered the house, they followed a strong odor to two bedrooms where the remains lay.

Last year, Jacks, who told police her children were possessed by demons, was convicted of killing her girls, ages 5, 6, 11 and 17. Exact causes of death were difficult to determine because the bodies were so badly decomposed when they were found.

Jacks is now serving 120 years in prison. In the three years before that winter morning when the marshals arrived, the Jacks family left plenty of tracks in Washington’s human services system, but no one had a map of their deteriorating circumstances. Jacks and her family had interacted at least 23 times with various agencies. She applied in person for food stamps. Calls were made from her cell phone to housing programs. Jacks received placement in an emergency homeless shelter. A subsidized medical plan referred her to a mental health provider. These isolated interactions were recorded mainly on paper, sometimes in siloed computer systems. No single staff member or electronic record in any of the programs that served the Jacks family could give a coordinated overview.

For example, when the Child and Family Services Agency got a hot line tip in 2006 that Jacks may have been neglecting her daughters, the agency didn’t have the family’s address and didn’t follow up. Yet at the time, four human services departments and two schools did have the family’s address, according to a report by the district’s inspector general, which, after the murders, investigated how the human services department handled the Jacks family. When teachers noticed the girls absent from school, they also tried to contact the family. “Multiple entities worked effectively, but largely obliviously to each other’s efforts,” the report says.

Clarence Carter was hired as director of the D.C. Department of Human Services a few months before the Jacks’ daughters were discovered. He dealt with the aftermath. “In the outrage,” he says, “there comes support for change.”

Carter proposes a transformation of his department, in both operations and technology. He envisions case workers with the ability to coordinate benefits, goods and services such as food stamps, housing vouchers, job training, medical treatment, and schooling to individuals and families. They would tailor services to a recipient’s needs, based on an analysis of the person’s circumstances and historical data about people in similar conditions. A single electronic view of the customer, with appropriate privacy controls, would let case workers see how a person’s circumstances were improving and what was still needed. Success, Carter says, would mean the customer required fewer and fewer services, eventually achieving independence.

“We want to grow people beyond the need for services,” he says.

It is equivalent, in the private sector, to identifying the warning signs that a customer is getting ready to bolt. A customer of a financial services firm, for example, transfers cash from checking to savings via an ATM, calls a help line to inquire about withdrawing money from his retirement account, e-mails a benefits administrator to reduce his 401(k) contribution and sells some stock online. All of that could happen within one financial institution, but no single employee or computer system might know about all of it. No one of those transactions would send up a red flag. But viewed together, a smart account manager may realize she needs to intervene to retain a good customer.

A Classic Alignment Problem

Despite the disconnects made obvious by the Jacks tragedy, Carter’s plans remain in their infancy. Obstacles include those any CIO would recognize, including aligning IT with the project goals and whittling big plans to an affordable, feasible size. These issues vex organizations whether they are private or public, New York City’s Riazi says. Part of the problem is that IT and business partners can become too focused on whether a given product can perform a given task, such as whether some Web software lets users query a customer database. They don’t think enough about the customer, she says. “We have to deliver a customer experience from the hardware, software and tools. It’s now IT-customer alignment.”

Government projects like Carter’s face additional challenges, such as convincing lawmakers to sponsor, write and pass legislation to let the department combine data systems and then to let employees share data—a drawn-out process that ensures funds are spent correctly and individuals’ privacy is protected. Also, states that take federal money for a significant portion of a project’s cost must adhere to federal requirements, which include a lengthy planning period—sometimes three years.

Aside from the legal authorizations needed to change the way a government agency runs, Carter explains, sometimes employees with ingrained habits based on “how we’ve always done it” need to be told directly to take an action. In the Jacks case, a case worker for the subsidized health plan Jacks used recommended that she get a mental health assessment. But the worker never checked to see if she had, she told the inspector general’s team, because she “wasn’t required to.”

“We were hired and are held accountable for the administration of programs, not for the well-being of individuals,” Carter says. “That has got to change.”

No state has accomplished what Carter has in mind, mainly because the costs are high and the changes to how people work are extensive. Golonka at the National Governors Association points to Indiana, which last fall canceled a $1.3 billion deal signed in 2006 with IBM to overhaul the state’s welfare system. Indiana’s governor called the 10-year project—which would have eliminated much of the face-to-face contact between citizens and agency workers and privatized the running of the state welfare system—“a flawed concept.”

But this work is not impossible. The United Kingdom began a systems revamp in 2006 at its Department for Work and Pensions. The goal is to provide better, more responsive service by breaking down barriers between departments, says Joe Harley, IT Director General and CIO for the department (See “How the United Kingdom Delivers Customer-Centric Government Services”). The CRM system was redesigned to track customers no matter how they come to the department—in person or by fax, phone or Web. A new network was installed, databases merged and data centers consolidated from seven to two. Thirty thousand jobs were eliminated.

Carter, though, is still slogging through legislative hearings and budget requests, trying to win support for the plan. He has backing from Washington Mayor Adrian Fenty, who hired him, but Fenty faces re-election in November, so political support is not assured.

IT leadership in the District has also been in flux. Vivek Kundra was CTO for two years until the Obama administration lured him to the federal CIO job in 2009. An interim CTO stepped in for seven months until Fenty named Bryan Sivak to the post last October. Sivak comes from Silicon Valley, where he founded InQuira, a vendor that makes customer-support software.

Sivak met with Carter a few weeks after arriving. Though Carter is more than ready to press ahead with his customer-centric plans, Sivak is taking a thorough look at the ideas, balancing Carter’s requests with those of D.C.’s 86 other agencies.

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