Social Security Administration: Risks Associated With Information
Technology Investment Continue (Letter Report, 09/19/94,
GAO/AIMD-94-143).
The Social Security Administration's (SSA) proposed acquisition of
intelligent workstations, i.e., personal computers, and local area
networks has not been driven by plans to identify how and where SSA can
best use its new technology and other resources to handle increasing
workloads and improve public service. SSA ultimately plans to introduce
a system of more than 90,000 personal computers and 27,000 local area
networks at a cost of billions of dollars. GAO has encouraged and
supported recent SSA efforts to reengineer its disability determination
process and set overall service delivery goals because they are
important steps in identifying future resource needs. However, national
implementation of intelligent workstations and local area networks is
proceeding independently of these initiatives and at risk because SSA
has not adequately defined its technology needs.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: AIMD-94-143
TITLE: Social Security Administration: Risks Associated With
Information Technology Investment Continue
DATE: 09/19/94
SUBJECT: Information resources management
Workstations
Computer networks
Strategic information systems planning
Personal computers
Systems architecture
Social security benefits
Claims processing
Requirements definition
ADP procurement
IDENTIFIER: National Performance Review
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Cover
================================================================ COVER
Report to the Subcommittee on Labor, Health and Human Services,
Education, and Related Agencies, Committee on Appropriations, House
of Representatives
September 1994
SOCIAL SECURITY ADMINISTRATION -
RISKS ASSOCIATED WITH INFORMATION
TECHNOLOGY INVESTMENT CONTINUE
GAO/AIMD-94-143
Social Security Administration
Abbreviations
=============================================================== ABBREV
DDS - disability determination service
IRM - information resources management
IWS/LAN - intelligent workstation/local area network
OTA - Office of Technology Assessment
PEBES - personalized earnings and benefit estimate statements
SSA - Social Security Administration
SSI - supplemental security income
Letter
=============================================================== LETTER
B-252597
September 19, 1994
The Honorable Neal Smith
Acting Chairman
The Honorable John Edward Porter
Ranking Minority Member
Subcommittee on Labor, Health and
Human Services, Education, and
Related Agencies
Committee on Appropriations
House of Representatives
As requested, this report provides you with background information on
the Social Security Administration's (SSA) efforts and challenges,
and our evaluation of SSA's progress in addressing the concerns we
have previously raised regarding implementation of intelligent
workstations (i.e., personal computers) and local area networks
(IWS/LAN). During our review, we provided written advice on specific
issues that should be addressed before SSA fully implements its
planned IWS/LAN system of over 90,000 personal computers and 2,700
local area networks.\1 This report includes recommendations on
additional action needed by SSA to assure that the implementation of
new technologies improves operations and service to the public.
The largest single component of the planned system is a 5-year,
$1.125 billion effort to acquire 64,000 intelligent workstations and
2,200 local area networks.\2 Referred to as its automation investment
fund project, this component is a critical initiative because SSA
will need to fully utilize new technology to efficiently and
effectively handle rapidly increasing workloads. This
64,000-computer acquisition is in addition to computers SSA already
possesses and computers it plans to purchase under different funding
accounts.
Although SSA could increase staff levels and continue to support its
outdated work processes with new technology, budgetary realities and
the need for better customer service call for a fundamental
reassessment of its work processes. These processes have evolved
over decades without taking advantage of dramatic technological
advances that could provide quantum efficiency gains.
Our work included reviewing SSA operations and interviewing officials
representing SSA, the Office of Management and Budget, the Office of
Technology Assessment (OTA), and state disability determination
services (DDSs). We conducted our work between October 1992 and June
1994 in accordance with generally accepted government auditing
standards. Appendix I provides more details on the objective, scope,
and methodology of this review.
--------------------
\1 Letter from the Director, Human Resources Information Systems,
Information Management and Technology Division, GAO, to the Acting
Commissioner of SSA, March 30, 1993.
\2 Unlike SSA's "dumb" terminals that only interface with centralized
computer systems, SSA's intelligent workstations are personal
computers that have their own data storage and processing
capabilities. SSA's local area networks will interconnect these
intelligent workstations within an office and to other SSA systems.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
SSA's ability to serve an increasing recipient base will depend
greatly on improving the efficiency and effectiveness of its work
processes. Accordingly, SSA has initiated efforts to acquire new
information technology, reengineer its disability determination
process, and develop business and service delivery plans. However,
because these efforts are not being carried out in proper sequence,
SSA's nationwide IWS/LAN system implementation is continuing with
unnecessary risk. This is because SSA's planning and reengineering
efforts--which could significantly impact the number, location, and
capabilities of personal computers required--are not far enough along
to help identify SSA's new information technology requirements.
SSA's effort to reengineer its business processes is an effort we
have encouraged and supported; but SSA's implementation of
IWS/LAN--that was planned before this effort--has not been refocused
to support it and is instead directed at SSA's current, inefficient
work processes.
As a result, we are concerned that SSA is incurring an unnecessary
risk by constructing a network of over 90,000 personal computers,
without showing that all are needed to support short- or long-term
requirements. Without linking its new technology acquisition to
these requirements, SSA is expending limited resources on technology
solutions, which could cost $5 to $10 billion over the next 10 years
and may not be needed to support operational needs and improve public
service.
SSA has also not established measurable cost and performance goals
that can be tested, assessed, and used to refine plans and goals
annually to further reduce the risk currently associated with
implementing IWS/LAN. Without these goals, SSA and its oversight
authorities have no means to assure that planned systems and other
resources are being focused on helping SSA staff to process all
future workloads and to deliver improved service to the public.
BACKGROUND
------------------------------------------------------------ Letter :2
In the 1980s, SSA began upgrading its systems to address growing
service problems. From 1982 to 1990, SSA's reported costs for
operating and upgrading its systems capabilities were over $4
billion. The agency acquired significant capacity through hardware
upgrades of its computers and converted much of its data stored on
tape to direct access storage devices. From 1987 to 1990, SSA also
installed dumb terminals in its about 1,200 field offices and linked
them via telecommunications lines to its national computer center in
Maryland.
PAST SERVICE DELIVERY
EFFORTS
---------------------------------------------------------- Letter :2.1
SSA's systems efforts helped provide some service delivery
improvements. However, the efforts did not provide the support
needed to adequately handle all essential services. For example, by
1992 the average processing time for supplemental security income
disability claims had already more than doubled the approximately 59
days it took in 1982. This degradation in service can be attributed,
in part, to increasing workloads and a 20 percent staff reduction in
the 1980s. However, as we previously reported, SSA's efforts were
not focused on fully utilizing technology to significantly reduce the
need for manual work to process its continually increasing workloads.
Since 1979, we have detailed the need for SSA to improve the
efficiency of its service delivery efforts. Appendix II summarizes
our products which addressed this issue. Specifically, we have
called on SSA to fully develop and implement a strategic management
process to guide planning, implementation, and evaluation of
long-range initiatives. Without such a plan, we noted that SSA
risked being overwhelmed by huge increases in beneficiaries that
loomed on the horizon.
Our recently issued report on improving mission performance
identifies information resources management practices that have
worked for both private and public sector organizations.\3 The report
notes that senior managers in leading organizations consistently used
a set of practices to improve mission performance through strategic
information management. Although organizations applied these
practices differently, our analysis suggests a strong tie between
their consistent, effective use and successful performance outcomes.
We concluded that the practices worked because they institutionalized
new ways of doing business that are required to capture the value of
information and information technology.
--------------------
\3 Executive Guide: Improving Mission Performance Through Strategic
Information Management and Technology (GAO/AIMD-94-115, May 1994).
SSA FACES MANY CHALLENGES
---------------------------------------------------------- Letter :2.2
Planning and reengineering are essential to address the many
significant challenges facing SSA. For example, figure 1 shows some
of the challenges that SSA must address to: (1) adequately handle
significantly increasing workloads, much of which will result from an
increasing recipient base, (2) implement new operational functions,
such as reporting requirements starting in 1995 for personalized
earnings and benefit estimate statements (PEBES), (3) reengineer its
business processes and implement new systems designs, and (4)
transition and implement to new ways of doing business.
Figure 1: SSA's Planning and
Management Challenges
(See figure in printed
edition.)
Handling increasing service workloads is a critical challenge facing
SSA. It is processing a growing number of claims for social security
retirement, supplemental security income (SSI), and disability. SSA
estimates that it will face an unprecedented growth in beneficiaries
over the next few decades. It bases this growth on many factors,
including the following.
The population continues to age. By 2005 there will be 4.8 million
more persons aged 65 and over than in 1990.
Life expectancies are continuing to increase.
The number of disability beneficiaries is expected to more than
double, from about 4.2 million in 1990 to over 8.7 million in
2005.
Figure 2 shows SSA's projected growth in beneficiaries through the
next four decades.
Figure 2: Projected Increases
in Social Security
Beneficiaries
(See figure in printed
edition.)
Source: Social Security Administration.
Also, recent legislation requires SSA to meet new reporting
functions. SSA is to start sending personalized earnings and benefit
estimate statements by 1995 to all individuals 60 to 65 years old who
are not receiving SSA benefits.\4 Further, in 2000, statements are to
be sent to workers age 25 years or older and not yet entitled to
social security retirement benefits.
Over the past decade, SSA has seen resources for its missions
decline, while workload has increased. SSA recognizes that its best
course of action is to reengineer its processes and systems.
Otherwise it will be very difficult, if not impossible, to provide
the level of service the public is demanding today and the volume of
service SSA is expected to handle tomorrow.
--------------------
\4 42 U.S.C. 1320b-13.
ONGOING EFFORTS TO IMPROVE
OPERATIONS
------------------------------------------------------------ Letter :3
SSA has initiated a number efforts to better serve the public. For
example, three key initiatives are focused on acquiring new
information technology, reengineering its disability determination
process, and developing business and service delivery plans.
However, we continue to be concerned that SSA's acquisition
initiative is preceding its planning and reengineering initiatives.
ACQUISITION OF NEW
TECHNOLOGY CONTINUES TO
PRECEDE PLANNING AND
REENGINEERING
---------------------------------------------------------- Letter :3.1
SSA's multiple and ongoing purchases heighten our previously
expressed concerns that SSA is starting to implement IWS/LAN at
locations nationwide, including about 1,300 field offices, without
first determining operational requirements and resource needs. It
currently plans to start purchasing and installing an additional
56,000 personal computers and 1,700 LANs with $220 million in no-year
funds\5 appropriated in fiscal year 1994--the first year of its
planned 5-year automation investment fund.\6 The implementation is
not focused on how and where new technology can best be used, either
in the short or long term.
In our March 1993 letter, we noted that SSA should not be fully
implementing IWS/LAN without first defining its business strategy.
SSA's IWS/LAN pilot locations were focused on measuring improvements
that personal computers provided to its current, inefficient
processes. In addition, the pilot locations were operating with more
personal computers than staff, when a much lesser ratio could have
provided SSA with a more cost-efficient solution. SSA's national
implementation has been sized to provide it with 1.3 personal
computers for each of its employees. Although SSA indicates that its
field offices need personal computers for each employee and for
interview and reception areas, it currently operates with far fewer
"dumb" terminals and it has not shown us any analysis supporting this
new unsubstantiated high ratio.
--------------------
\5 No-year funds are available until expended; they do not have to be
obligated in the year appropriated.
\6 Thirty percent of this total is for computers and local area
networks, twenty seven percent is for furniture, twenty eight percent
is for planning and reengineering, with the remaining fifteen percent
for telecommunications, support services, and training.
SSA INITIATES A
REENGINEERING EFFORT
---------------------------------------------------------- Letter :3.2
During our review, we had numerous meetings with senior SSA managers
to discuss the need to reassess and reengineer its business
processes, so that the agency could begin to fully utilize the
benefits that today's technology can provide. Subsequently, SSA
decided to start a reengineering effort of its disability
determination process.
In October 1993, the SSA Commissioner testified that it would be
unrealistic to believe that merely hiring additional staff or
continuing to support large amounts of overtime would allow SSA to
keep up with growing workloads if they are managed under SSA's
current business practices, which are based, in large part, on
procedures that have evolved over 50 years. She noted that given
current budget realities, it was unrealistic to expect significant
increases in staffing, and therefore SSA was reviewing how to
"reengineer" its business practices. The Commissioner stated that
the objective of this reengineering review is to fundamentally
rethink and radically redesign business processes as a whole, from
start to finish, so SSA can become many times more efficient and, as
a result, significantly improve service to the public.
In April 1994, SSA issued a proposal on the agency's first
reengineering project--the disability determination process. During
our review, we had observed inefficient, paper-driven operations at
SSA district offices and state disability determination services and
briefed SSA management on the need to reengineer before automating.
This disability process is complex, involving up to 26 people to
reach an initial disability decision. SSA reports that the average
claimant waits up to 155 days from initial contact with SSA for an
initial decision, although only about 13 hours are spent actually
working on a claim. Most of the time is associated with waiting for
medical evidence, handing off the case to the next step in the
process, and waiting in queue after these hand-offs.
In April 1994 testimony, we stated that SSA's reengineering proposal
is a valid attempt to address major fundamental changes needed to
realistically cope with disability determination workloads.\7
Combining top management leadership with the necessary staff and
resources resulted in a credible proposal that documents the existing
disability determination problems and recommends a solution to
dramatically change the process. However, like any major reform
effort, many difficult implementation issues will need to be
addressed. These include new staffing and training demands,
developing necessary automation requirements, and confronting the
entrenched cultural barriers to change.
Reengineering is a formidable undertaking that involves difficult and
strenuous work since it requires an organization's managers and
employees to change the way they think and work. For example, after
senior management recognizes the need for change and commits to
reengineering, it then must direct the effort. Existing processes
should be described and analyzed and measurable improvement goals
should be set. In addition, senior management must also support the
reengineering effort by identifying training needs and determining
whether outside expertise is necessary. New business processes
should then be designed and the organizational culture, structure,
roles, and responsibilities should be changed to support these new
processes. Finally, new business processes should be implemented by
acquiring and installing new technology or redesigning existing
technology to support the new processes.
--------------------
\7 Social Security Administration: Major changes in SSA's Business
Processes Are Imperative (GAO/T-AIMD-94-106, April 14, 1994).
BUSINESS AND SERVICE
DELIVERY PLANNING EFFORT NOT
COMPLETED
---------------------------------------------------------- Letter :3.3
SSA intends to augment its agency strategic plan, which defines an
overall planning approach, with separate business and service
delivery plans. These plans should define specific business and
service delivery needs, and provide the framework needed to determine
systems requirements. SSA is not expediting these critical planning
efforts, which are needed to provide the framework for the
implementation of IWS/LAN.
While an October 1993 draft service delivery concept paper offered
the first indication that the effort was starting to define specific
goals and identify how and where SSA planned to conduct business in
the future, a subsequent February 1994 service delivery draft did not
provide this essential planning guidance. SSA is now meeting with
the public, employees, and interest groups to establish its service
delivery goals. In addition, a March 1994 draft of SSA's business
plan also did not provide the essential planning guidance needed to
define systems requirements.
SSA HAS NOT YET IDENTIFIED ITS
IWS/LAN NEEDS
------------------------------------------------------------ Letter :4
Despite fully recognizing the need for reengineering, SSA is
proceeding with its efforts to implement IWS/LAN before completing
the necessary planning to help define how IWS/LAN will ultimately be
used to meet the agency's challenges. Such planning initiatives
would identify how, where, and when new technology can best be used
with its facilities and human resources to improve work processes and
the delivery of services to the public.
A major advantage of the planned acquisitions is to allow SSA to move
from a computing system that relies primarily on centralized
mainframe computers to a system that can also rely on the computing
power provided by personal computers. Referred to as cooperative
processing, such a system can be used to provide a more
cost-effective and responsive infrastructure to improve operations.
We support the cooperative processing concept and understand SSA's
concern to start the lengthy implementation cycle. However, in our
March 1993 letter to SSA, we detailed five initiatives that we
believed were necessary to successfully implement IWS/LAN. These
are:
documenting the justification for SSA's technical solution,
linking technology system redesigns to long-range business
strategy,
better defining the need for IWS/LAN,
developing an accountability methodology by establishing ways to
track and account for cost and performance goals of its systems
redesign efforts, and
better defining state disability business requirements.
In November 1993, SSA responded that it had adequately addressed our
five issues. However, we disagreed and explained our concerns in a
December 1993 letter (see appendix II).
Addressing the five issues is particularly important because ongoing
planning and reengineering efforts could significantly impact the
number, location, and capabilities of personal computers required.
Until these efforts are far enough along to identify system needs,
SSA risks unnecessarily spending hundreds of millions of dollars to
acquire and install equipment that may not meet its needs. The
Office of the Deputy Commissioner for Systems is working on an
initiative that outlines how SSA might be able to better tie its
systems effort to planning and reengineering efforts. However, until
SSA's planning and reengineering efforts are far enough along to
provide the guidance needed, the Office of the Deputy Commissioner
for Systems is only presuming what the requirements might ultimately
be.
We agree that SSA has adequately addressed most of our first issue,
which was to provide documentation supporting its choice of the
IWS/LAN technology. We believe it is a viable technical solution
that could provide SSA with improved baseline automation capabilities
if it is designed and tested to support both short- and long-term
needs, without restricting future technical solutions to
vendor-specific systems. However, as discussed in the following
sections, SSA has not adequately addressed the remaining four issues
dealing with the need for (1) long-range planning, (2) short-range
planning, (3) cost and performance goals, and (4) coordination with
states.
LONG- AND SHORT-RANGE
PLANNING
---------------------------------------------------------- Letter :4.1
SSA's lack of a long-term business strategy resulted in an
information systems plan that focuses technology upgrades on
automating current, inefficient processes. Without a long-term
business strategy, SSA lacks a principal prerequisite needed to guide
information systems planning to focus on adequately handling all
short- and long-term workload requirements and improving service to
the public. SSA's approach runs counter to what we highlighted in
our May 1994 report on entities that had successfully implemented new
systems. A clear principle emerging from that analysis is that
successful organizations do not proceed with major systems proposals
unless they are based on forward-looking business plans.\8
SSA officials told us that by initiating its reengineering and
planning efforts, it is ready to proceed with IWS/LAN. In November
1993, SSA told us that it should proceed because, even if its
reengineering efforts result in radically altered business processes
that IWS/LAN cannot support, the scope of these changes would be so
large that it would be unlikely that the changes would be made before
the end of SSA's 5-year life-cycle for the new IWS/LAN equipment. We
believe SSA should be able to identify service delivery goals and
reengineer at least some of its operations well before the end of
this 5-year life.
Although we support SSA's reengineering effort, the results of the
effort--not the effort alone--will determine how well the agency can
best plan to use technology to handle increasing workloads and
improve service to the public. Like any major reform effort, many
difficult implementation issues still need to be addressed. These
include new staffing and training demands, developing necessary
automation requirements, and confronting the entrenched cultural
barriers to change.
Purchasing equipment without defining future business processes and
equipment needs inherently accepts an unnecessary risk of not
improving service and handling all projected workloads at a
reasonable cost. It also places SSA at risk of not achieving its
reengineering goals, but merely automating current processes. This
is particularly important given that SSA's planned $1.125 billion,
5-year acquisition of personal computers and local area networks,
only provides the first items of its new enabling technology for a
much larger systems development effort that could easily cost between
$5 billion and $10 billion over the next 10 years. This larger
effort should be focused on identifying the processing and functional
capabilities needed to adequately handle future workloads.
The number of personal computers being purchased is also an issue.
SSA is establishing a new IWS/LAN architecture that it will have to
support and may want to replace with new equipment about every 5
years. In this regard, a March 1993 private sector study noted that
buying personal computers does not cost as much as operating and
supporting them.\9
This study noted that although the acquisition costs for personal
computers are falling, businesses generally spend $40,000 per
computer over a 5- year period after considering the cost of making
and keeping it operational on an ongoing basis. In connection with
IWS/LAN implementation, SSA, in response to labor arbitration, is
acquiring and installing ergonomic furniture, which it estimates will
cost about $5,600 per unit. Based on the $40,000 estimate, operating
and supporting 90,000 personal computers could end up costing upwards
of $3.6 billion. If it does not really need over 90,000 personal
computers, it could be unnecessarily overspending by hundreds of
millions of dollars.
We are also concerned that there are also unidentified costs for many
other systems improvements (e.g., integrating its various mainframe
databases) that have to be made to fully utilize the benefits of a
cooperative processing system. SSA has not identified the number of
new personal computers needed, or how they will be efficiently used
in a defined cooperative processing environment that improves
operations and provides better service to the public. For example,
SSA is assessing the use of video conferencing on IWS/LAN. If it
decides to implement this new feature, SSA may later have to upgrade
its IWS/LAN system (e.g., replacing an undefined number of new
personal computer monitors with video conferencing monitors that
currently cost about $10,000 each).
Realizing that SSA has to support short-term needs by upgrading some
technology in its offices, we noted in our March 1993 letter that SSA
could also identify how a limited deployment of IWS/LAN technology
could augment current operations, until long-range planning is far
enough along to start driving systems efforts. However, SSA decided
not to pursue this option because of the long lead time needed to
procure and install IWS/LAN and the desire to implement a more
capable system. SSA told us it is important to proceed with IWS/LAN
to replace existing equipment that it believes could be at risk of
malfunctioning in the future and negatively impacting current service
delivery levels. It also believes that IWS/LAN will provide it with
an enabling technology to implement future process improvement.
Although we understand SSA's desire to move ahead with a more capable
technology, this decision places increased importance on accelerating
its planning and reengineering efforts to reduce the risk of
installing new equipment which may not adequately support still
undefined business requirements.
--------------------
\8 Executive Guide: Improving Mission Performance Through Strategic
Information Management and Technology (GAO/AIMD-94-115, May 1994).
\9 Management Strategies: PC Cost/Benefit and Payback Analysis
(Gartner Group/R-824-107, March 24, 1993).
COST AND PERFORMANCE GOALS
---------------------------------------------------------- Letter :4.2
In our March 1993 letter, we also discussed our concern that SSA is
focusing on a major technology upgrade without first (1) establishing
measurable cost and performance goals for service delivery that can
be attained through reengineering operations, (2) developing plans
that address these goals and establish time frames to achieve them,
and (3) identifying the financial, information, and human resources
that are needed. We were also concerned that SSA was not planning
full functioning pilot tests. For example, it is not testing how
information will be electronically shared between SSA and the state
disability determination services, nor is it currently planning to
test how technology will support new work processes emerging from
reengineering efforts. Such pilots could be used to assess the
feasibility and projected results of planned initiatives.
In our May 1994 report on improving mission performance, we noted
that successful organizations rely heavily upon performance measures
to operationalize mission goals and objectives, quantify problems,
evaluate alternatives, allocate resources, track progress, and learn
from mistakes.\10 Performance measures also help assess whether
information systems projects are really making a difference. Without
establishing measurable cost and performance goals and an
accountability methodology to annually report progress to its
oversight authorities, SSA cannot annually support the need for new
systems.
Although SSA is initiating action to identify cost and performance
goals and to develop an accountability methodology, this action is
not complete. It has an ongoing effort with the General Services
Administration to develop a "yardstick" to measure the benefits that
IWS/LAN will provide the public. This effort--resulting from the
National Performance Review--is intended to require agencies to
include performance measures on all information technology purchases
of $100 million or more. However, it is not clear whether this
effort will result in providing the cost and performance goals
needed.
--------------------
\10 GAO/AIMD-94-115, May 1994.
COORDINATION WITH STATES
---------------------------------------------------------- Letter :4.3
Our March 1993 letter noted that SSA appeared to be imposing its
IWS/LAN technology solution on state-operated DDSs without adequately
considering state business needs. Currently, SSA is working on a
number of initiatives to better coordinate its efforts with state
officials. However, states are still concerned that SSA is not
adequately obtaining their input on SSA planning, reengineering, and
systems efforts that affect them. For example, in response to SSA's
reengineering proposal, the National Council of Disability
Determination Directors, which represents all state DDSs, noted that
they were very concerned that the DDSs be appropriately involved in
the implementation of all aspects of the reengineering proposal.
We continue to encourage SSA to work closely with the states, rather
than merely imposing systems requirements on the states. This is
particularly important given that various state systems are
continuing to be upgraded or replaced to meet SSA systems
requirements that may not be needed to meet current and future
operational needs.
OTHERS HAVE RAISED SIMILAR
CONCERNS
------------------------------------------------------------ Letter :5
Many of our issues have also been raised by others, including SSA's
Office of the Deputy Commissioner, Finance, Assessment and
Management; the National Research Council; and the Office of
Technology Assessment (OTA). These organizations questioned whether
SSA had adequately justified its new technology. For example, an
April 1994 report by OTA stated that SSA has not:
defined how IWS/LAN will support expected improvements in service
delivery;
estimated the costs, benefits, and performance impacts of IWS/LAN;
planned true pilot tests which model the desired functionality for
disability processing; and
conducted a joint SSA-state review on how to modernize states'
disability determination processes and make best use of
available funds.\11
--------------------
\11 U.S. Congress, Office of Technology Assessment, The Social
Security Administration's Decentralized Computer Strategy: Issues
and Options (OTA-TCT-592, April 1994).
CONCLUSION
------------------------------------------------------------ Letter :6
SSA's proposed IWS/LAN acquisition has not been driven by plans that
identify how and where SSA can best use its new technology and other
resources to adequately handle increasing workloads and improve
public service. We have encouraged and supported recent efforts by
SSA to reengineer its disability determination process and establish
overall service delivery goals because they are important steps in
identifying future resource needs. However, national IWS/LAN
implementation is proceeding independently of these initiatives and
at risk because SSA has not adequately defined its technology needs.
RECOMMENDATIONS
------------------------------------------------------------ Letter :7
We recommend that the Commissioner of Social Security better define
IWS/LAN requirements by linking the agency's planning and
reengineering efforts to its automation initiatives. The specific
actions necessary to accomplish that goal include:
accelerating planning and reengineering efforts, and if necessary,
delaying the installation of IWS/LAN until these efforts are far
enough along to substantiate the number, location, and
capabilities of personal computers required to support business
and service delivery needs;
implementing fully functioning pilots to assess the ability of
IWS/LAN to support reengineered processes (e.g., whether IWS/LAN
provides expected time savings, improves case processing
including the electronic transfer of files, and operates
smoothly with the planned remote monitoring of field office
systems) at locations offering the most potential benefits; and
working closely with states in reassessing systems requirements for
state disability determination services to assure that they
support SSA's business and service delivery needs and state
requirements.
We also recommend that the Commissioner of Social Security estimate
and annually report the total cost and benefits of process and
systems changes. This should include establishing measurable cost
and performance goals that will provide SSA and its oversight bodies
with adequate information to assess the reasonableness of SSA's goals
and progress during testing and implementation of IWS/LAN.
AGENCY COMMENTS AND OUR
EVALUATION
------------------------------------------------------------ Letter :8
In its comments on a draft of this report, SSA noted that it is
taking action in order to address many of the issues that we have
communicated to them during this review. SSA has been progressive
and is taking steps to improve its business planning and to
reengineer its disability determination process. These actions,
however, are not far enough along to define and justify its current
IWS/LAN implementation strategy. Appendix III contains a copy of
SSA's comments.
In responding to our first recommendation to accelerate planning and
reengineering efforts to provide a solid basis for IWS/LAN
implementation, SSA expressed concern that completing a detailed
master plan would unduly delay implementation, thereby creating
unacceptable risk to mission performance. SSA said that it would
continue its current long-range planning of all its major business
processes concurrent with acquiring new technology. As discussed
earlier in this report, given practical realities, SSA does not need
to complete all aspects of detailed planning before proceeding with
implementation; however, planning should be far enough along to
justify SSA's purchases in terms of number, location, and
capabilities of personal computers required to support business and
service delivery needs.
We recognize that SSA will need to replace equipment to support
existing operations while the reengineering process is underway and
to adequately handle its future workload. Planning for these ongoing
needs should not be difficult or result in undue delays in
implementing IWS/LAN technology at field offices. It is critical
that SSA's ability to carry out its mission not be impaired by lack
of computers. Our concern is that SSA has plans to install over
90,000 personal computers before establishing that such a large
number are needed to efficiently and effectively handle workload
increases predicted for both the short and long term. Until its
planning progresses to a point that provides more definitive
guidance, SSA will not have an adequate decision-making foundation.
This view is consistent with that of the Office of Technology
Assessment which recently reported that SSA's chances for success
with IWS/LAN would be increased if planning were strengthened.\12
In responding to our second recommendation that it implement fully
functional pilot tests, SSA said it had piloted the system in 10
operating offices to measure actual benefits before deciding to
implement IWS/LAN nationwide. These pilot projects focused on
current work processes and only demonstrated that certain tasks had
been streamlined, thus offering some time-saving efficiencies.
However, SSA did not (1) test IWS/LAN's capabilities to handle
increased workloads and (2) determine whether the same gains could
have been achieved with fewer personal computers. In this regard,
SSA commented that it was addressing the above concern by conducting
additional pilot studies on various computer-to-worker ratios. SSA
added that it would acquire only the quantities of computer equipment
justified on the basis of service delivery and economic operations.
We believe it is important in conducting future pilots that SSA
ensure that the tests encompass the full range of envisioned system
and process changes.
Our final recommendations concerned SSA's working more closely with
state disability determination services to better identify their
needs and improving accountability through the establishment of
measurable cost and performance goals for process and systems changes
(and annually reporting on the costs and benefits of these changes).
SSA agreed in both cases and plans to take appropriate action. Our
continuing work at SSA will include focusing on the agency's progress
in these important areas.
SSA also noted that it was taking action to mitigate the risks
associated with the IWS/LAN investment by following guidance outlined
in our recent report on strategic information management.\13
Following this guidance should help mitigate risks associated with
systems development. Our research of leading organizations showed
that the 11 management practices outlined in our strategic
information management report take time to effectively implement and
refine. It also showed that agencies are typically strong in two or
three management practices, but that real improvement does not occur
until all are implemented as an integrated set. As we continue our
work, we will evaluate how well the agency is progressing in
implementing this guidance and explore possible enhancements.
--------------------
\12 OTA-TCT-592, April 1994.
\13 GAO/AIMD-94-115, May 1994.
---------------------------------------------------------- Letter :8.1
We are sending copies of this report to the Chairman and Ranking
Minority Members of the Senate Committee on Governmental Affairs,
House Committee on Government Operations, and other interested
congressional committees, and to the Director, Office of Management
and Budget. We will also make copies available to others upon
request.
Please contact me at (202) 512-6408 if you have any questions about
this report. Major contributors are listed in appendix IV.
Frank W. Reilly
Director, Health, Education, and
Human Services Information Systems
OBJECTIVE, SCOPE, AND METHODOLOGY
=========================================================== Appendix I
Our objective was to assess whether SSA's planned $1.125 billion
IWS/LAN investment is directed to supporting SSA's effort to improve
service delivery to its increasing recipient base. Our work focused
on SSA's progress in addressing the advice we provided in our March
30, 1993 letter. The House and Senate reports on SSA's 1994
appropriations stated that SSA should report the actions taken on
this advice before obligating any further IWS/LAN funds.\1
To meet our objectives, we met with agency officials responsible for
systems planning activities, agency operations, and budgeting. We
also met with budget and information resource management (IRM)
officials from the Office of Management and Budget, as well as
officials from the Office of Technology Assessment, who were
conducting a review of SSA's automation program. We reviewed
relevant systems and strategic planning documents, draft service
delivery proposals, as well as the results of IWS/LAN pilot tests.
We also reviewed past GAO and other reports on SSA's systems efforts.
To help determine the impact of IWS/LAN, we observed operations at a
variety of pilot and non-pilot offices. This includes 21 district
and branch offices, and 3 teleservice and 2 program service centers,
and state disability determination services in the following states:
Alabama, California, Colorado, Florida, Georgia, Illinois, Indiana,
Maryland, Massachusetts, New Mexico, New York, North Carolina, Rhode
Island, Virginia, Texas, and Wisconsin, as well as the District of
Columbia.
We conducted our review from October 1992 through June 1994, in
accordance with generally accepted government auditing standards. We
have discussed the contents of this letter with SSA officials, and
have incorporated their views where appropriate.
--------------------
\1 House Report 103-156 and Senate Report 103-143.
PAST GAO PRODUCTS RELATED TO
INADEQUATE SSA PLANNING
========================================================== Appendix II
1. Major Changes in SSA's Business Processes Are Imperative
(GAO/T-AIMD-94-106, Apr. 14, 1994).
We testified that SSA's April 1 proposal to redesign its disability
determination process is a valid, credible attempt to address the
major fundamental changes needed to cope with SSA's increasing
disability workload. However, we said that SSA still needed to
identify how, where, and when automation would be used to adequately
support the reengineered process. Further, the concerns of SSA
employees and state administrators would have to be addressed,
including their natural resistance to changes in their roles and
responsibilities.
2. Letter from the Director, Human Resources Information Systems,
Information Management and Technology Division, U.S. General
Accounting Office, to the Principal Deputy Commissioner, Social
Security Administration, Dec. 23, 1993.
We said that we did not fully support funding SSA's planned IWS/LAN
acquisition, because SSA had not adequately addressed five key issues
that we had identified in our March 30, 1993 letter to SSA. For
example, although SSA identified its disability determination process
as a key area to reengineer, it had not refocused its planned IWS/LAN
deployment to support this effort. In addition, we suggested SSA
reassess the number of computers it was purchasing, that is, whether
its offices need to have a ratio of more than one computer per
person.
3. Social Security: Sustained Effort Needed to Improve Management
and Prepare for the Future (GAO/HRD-94-22, Oct. 27, 1993).
We reported that SSA had strengthened strategic management planning
by defining high-level service in its September 1991 agency strategic
plan. However, we noted that SSA had not fully implemented a
strategic management process to guide planning, implementation, and
evaluation of long-range strategic initiatives. It also had not
completed a service delivery or business plan that specified how and
where SSA would provide service in the future. Without such a plan,
SSA lacked a prerequisite for its resource and facility plans.
4. Letter from the Director, Human Resource Information Systems,
Accounting and Information Management Division, U.S. General
Accounting Office, to the Acting Commissioner of SSA, Mar. 30, 1993.
We detailed five issues that we believed SSA must address to justify
funding for its planned IWS/LAN acquisition. Specifically, that SSA
needed to: (1) document the justification for its technical
solution, (2) link technology system redesigns to a long-range
business strategy, (3) better define SSA's need for IWS/LAN,
including how a limited IWS/LAN deployment could best augment current
operations until a long-range strategy is defined, (4) develop an
accountability methodology to track and account for the cost and
performance goals for its systems redesign efforts, and (5) better
define state disability business requirements.
5. SSA Computers: Long-Range Vision Needed to Guide Future Systems
Modernization Efforts (GAO/IMTEC-91-44, Sept. 24, 1991).
We reported that after 10 years of systems modernization
activities--without a long-range plan--SSA risked being overwhelmed
by the huge increases in beneficiaries that loomed on the horizon.
6. Social Security Administration's Systems Modernization Plan
(GAO/T-IMTEC-89-11, Sept. 28, 1989).
We testified that SSA believed that it could improve its service
delivery methods through its agency strategic plan. However, the
plan did not identify specific functions the agency would perform to
support the type of service envisioned, the levels of service quality
and timeliness to be achieved, and the level and type of resources
needed. Without such information, SSA could not accurately determine
the value of an enhanced information processing environment or its
costs.
7. ADP Systems: SSA's Modernization Efforts Need Redirection
(GAO/IMTEC-87-16, Apr. 10, 1987).
We reported that SSA's systems modernization efforts were proceeding
without the benefit of a service delivery plan that sets service
delivery goals and approaches, and defines the desired organizational
structure.
8. Social Security Administration Needs to Continue Comprehensive
Long-Range Planning (GAO/HRD-79-118, Sept. 20, 1979).
We reported that SSA had not established long-range plans to respond
to future program needs and service level requirements, and to help
design ADP systems that can support future as well as present agency
operations.
(See figure in printed edition.)Appendix III
COMMENTS FROM THE DEPARTMENT OF
HEALTH AND HUMAN SERVICES
========================================================== Appendix II
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MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV
ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, WASHINGTON,
D.C.
Leonard Baptiste Jr., Assistant Director
William D. Hadesty, Technical Assistant Director
James C. Houtz, Evaluator-in-Charge
K. Alan Merrill, Senior Technical Advisor
J. Michael Resser, Staff Evaluator
BOSTON REGIONAL OFFICE
William A. Moffitt, Senior Evaluator
Rajiv Mukerji, Staff Evaluator
DENVER REGIONAL OFFICE
Jamelyn A. Smith, Staff Evaluator
Jean N. Chase, Staff Evaluator