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EXECUTIVE SUMMARY As the Social Security Administration moves toward the twerp first century, the nature of its service to the public must be guided by a cianty of vision, sufficient to determine its internal organization, systems architecture, arid work force composition, using advances in technology and training to deal with its massive information Tows. The mission of the Social Security Administration (SSA) is to administer equitably, effectively, and efficiently a national program of social insurance as prescribed by legislation. The business (i.e., the programs) of the SSA includes Old Age and Survivors Insurance, Supplemental Security Income, and Disability Insurance. The SSA also acts as the entry point for Medicare and Medicaid for the Health Care Financing Administration. To carry out its mission the SSA has built a massive information system consisting of a central data processing center, more than 30,000 user terminals, and a data network connecting its major facilities. The SSA operates one of the largest recordkeeping systems in the world. Automated techniques must be used to perform the huge job of posting earnings to individual records and computing benefits from these records. The use of automatic data processing and telecommunications has been extended to practically all areas of program operations. The magnitude of the tasks performed as part of these operations is indicates] by the following: Almost 40 million people currently receive retirement, survivor, and disability benefits. Seven million new social security numbers and 5 million changes are requested each year. Wage postings for 200 million people are macie each year. 1

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At. 2 Three million new claims and 120 million changes affecting retirement and survivors disability insurance are processed each year. One million new claims and 9 million changes for supplemental security income are processed each year. By the year 2000, the number of Americans over age 65 is expected to increase by 36 percent, and the number of people receiving retirement and disability benefits will reach 44 million, with new claims projected to hit 5.6 million annually. In 1982, the SSA's information systems were on the brink of failure' and drastic . . . .. measures were required to restore them. In response, the SSA undertook a comprehensive Systems Modernization Plan (SMP) that was approved by the Congress. Under the SMP, the processing power of SSA's computer systems was increased eightfold, and most of its data was transferred from magnetic tape to disk. With its data on disk the SSA was able . . . . ~ ~ . ~ . . . .. to develop its on-~ne capan~ty and Install tens of thousands of computer terminals throughout the country, thus providing immediate access to claimants' records. The claims modernization project allows field office staff to enter claims information directly into the system and to request any related data in agency records needed to process the claim. The system then provides a paper copy of the completed application for the claimant to sign. However, many other functions and entire processes are still performed manually. Even in hi~h-volume areas the benefits of automation have not been completely realized. ~ ~ , For example, claims can be entered electronically via computer terminals but are still processed by the old batch programs in overnight computer runs. Although certainly a great improvement over previous systems and methods, this incompletely automated system still precludes entering and completing a claim on-line in a single series of transactions. An . . .. ~ . is. . .. ~ ~ .~ ~ ~ ~ . ~ . . . ~ analogous system would, tor example, allow an airline agent to request a ticket and seat ~ ED ~ assignment for a passenger, who would then have to wait a day or so for confirmation of the flight and seat requested. _ ~ ~ based on experience with such systems, the committee believes that USA can do a great deal more to exploit the benefits of on-line automation in the conduct of its business. There have been considerably different views regarding the status, accomplishments, completion date, and eventual cost for modernizing the SSA's systems under the SMP. Given the SSA's substantial investment in modernization and its established strategic directions, the agency needed an independent assessment of whether these investments and strategies for the future were consistent and appropriate. In 1988, at the request of former Commissioner Dorcas R. Hardy, the National Research Council convened a committee to review the SMP, the Agency Strategic Plan (ASP), and the technical and technical management environment in which these plans were being implemented (Appendix A). The resultant committee undertook a two-phase study. In Systems Morlemization and tile

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3 Strategic Plans of the Social Security Administration (National Research Council, 1990), the Phase I report issued in February 1990, the committee reviewed and assessed the SMP, the ASP, and the software engineering methods used at the SSA. At the request of Commissioner Gwendolyn S. King, the committee also prepared a letter report, sent June 15, 1990, that provided advice on the SSA's plans for backup and recovery of its National Computer Center (Appendrx B). This is the committee's report at the conclusion of the second phase. Chapter 1, the introduction, includes a brief overview of the scope of SSA's operations and its past performance, and it outlines the committee's approach to this Phase II study. Chapters 2 through 6 of this report deal with the main areas the committee believes the SSA must focus on. In Chapter 2 the committee discusses SSA's need for a vision to guide the development of itS information systems and otters pertinent suggestions. Chanter 3 deals . . . ~ , " , . . ~ .. . . ^^ .1_ _ , ,~ ~ ~ ~ ~ ~ , .. ~ ~ rev ~ worn service lo me public and now quantitative and measurable service levels should be the basis for system-level decisions and investments. In Chapter 4 the committee discusses organizational matters as they relate to the technical management of the agency. Chapter 5 addresses human factors and issues arising from changing demographics and increasing automation as they affect the agency's technical and nontechnical workers. In Chapter 6 the committee reports on several technical issues, such as automation at the program service centers and modernization of supplemental security income processing, along with other technology topics. Appendixes A through E contain, respectively, the committee's statement of work, the committee's letter report to Commissioner King, a list of briefings heard, a summary description of the various functions that the SSA performs, and a glossary. FINDINGS AND RECOMMENDATIONS A Vision for the SSA The SSA does not have a vision for its information systems that encompasses what will be needed to support the agency's mission and operations into the next century. A clear vision is needed as a basis for decision making. While there has been significant improvement in the agency's systems, its progress has primarily been in fixing problems and stabilizing its systems. The current systems will be able to evolve further, but at some point redirection and redesign are inevitable. New technology should not automatically be equated with high risk. It will be necessary to exploit new technology in order to move the SSA forward, but careful planning and caution still need to be exercised to avoid reaching beyond what is achievable. Forecasting technology is difficult because breakthrough innovations or developments i

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4 can occur quite quickly and have a major impact. However, there are trends that can be relied on in developing an information systems strategy for the SSA in the l990s. Such trends include mainframe computer costs decreasing 20 percent per year, workstation processing power Increasing Mu percent per year, storage capacity for born magnetic and optical media greatly increasing, communications capacity expanding, and software development tools increasing productivity tenfold. Given such trends, the characteristics of a systems architecture for SSA might be as follows: A distributed system, with mainframe computers serving as the hub of the system (particularly with respect to the storage of shared data files). Local intelligent workstations to support service agents and clerical personnel, providing local service functions and a user-friendly interface to ease training requirements. A telecommunications network that interconnects all parts of the system, allowing an agent to access client data from any terminal in the system. A high degree of computer "intelligence" embedded within the system (probably using sophisticated expert systems methodologies), permitting increased functionality to serve clients and increase labor efficiency. An advanced office information system to support document creation and dissemination, image storage and retrieval, person-to-person communications, and decision support systems. The SSA can develop such an architecture if it has the leadership, vision, and will to do so. Given the agency's importance and size, the SSA should aspire to no less for itself than that expected from competent commercial enterprises. To facilitate this, a small but highly competent planning group should be formed to direct the use of technology to improve operations rather than to simply automate existing procedures. Furthermore, this group should assure that implementation is carried out in a risk-averse fashion. The SSA needs a systems architecture that is highly adaptable to handle increases in the diversity of its clients, employees, oversight bodies, and the technological elements themselves. The SSA should not try to adopt unproven technology. Its architecture should exploit a mix of storage media, human interaction technologies, and intelligent systems methods. Technology itself must not drive systems evolution. Instead, technology must be chosen based on its ability to help fulfill the agency's goals. Changes in technology must not prevent mandated operations from being carried out. New technology should aid the . .. . . evolution toward more complete and wide-ranging automation, to reduce current manual operations, and to minimize, if not eliminate, paper-based processing. ..

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s Despite the many improvements in automation, the SSA's current software systems are inflexible and nonmodular and still require excessive, manual, paper-based intervention by clerical staff. A desirable target system would automate current manual operations with ~ ~ , em ~ ~ moau~ar~y, un~orm~y or data interlaces, and flexibility both for the users and for maintenance and enhancements of the system. More complete automation can be optimally achieved only by carrying out a careful systems analysis based on metrics and abstract data requirements of the overall SSA task, which, together with configuration planning, will suggest alternative transitional mLxes of parts of the old and new systems that can become intermediate stages in the migration to a new architecture. Several major systems are evolving toward a so-called client-server architecture, and this architecture could be quite effective for agency-wide application. Moving toward a client-server architecture could be accomplished gradually without major disruption to either the current systems or the services they support: the functions and processing now done on centralized mainframes would be gradually off-loaded to workstations, and the central mainframes would continue to provide access to SSA's databases and would evolve into database servers. Service The SSA needs to strengthen its management processes by setting service-level objectives for its most important services. The committee found that the agency did not have well-defined targets for service to the public. The target levels selected should reflect both the quality and responsiveness of services to the public. The following are suggested points for achieving end-service objectives through a closed-loop management system: . The SSA should select a few (less than 10, including 4 to 5 major) ' ' objectives for the quality and quantitative and measurable service levels as responsiveness of the service it provides. The SSA should put in place mechanisms to objectively measure the service levels actually achieved over time. Based on actual versus target service levels, the SSA should manage its staffing, procedures, automated data-processing (ADP) support, and telecommunications resources to achieve the target service objectives, with target objectives for each of these internal units set to enable the agency as a whole to meet service targets to its "clients." The SSA should acquire new management tools to help relate resource levels l

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6 . . to service levels. The SSA should not view as permanent the target service levels it sets. They may include interim objectives that are less ambitious at first. Also, from time to time, they will likely have to be modified or extended to accommodate new objectives that are driven by the wishes of the public (and the Congress). They may even need to accommodate unrealistic objectives that cannot be attained with available resources and budgets. The SSA should announce its service objectives publicly to gain support from the Congress, the agency's oversight and budget authorities, and the public. These service objectives also need to be communicated effectively within the SSA. The SSA's budget request should reflect the funds needed to achieve service targets, usefully focusing the budget debate on what service levels are desired and how they are best attained. Managing to achieve specified service levels does not necessarily require greater effort and expenditure of resources. On the contrary, providing faster service or taking other measures to improve service may actually reduce costs, because achieving such improvements will generally require some optimization and streamlining of operations. Organization Since the Old Age and Survivors Insurance (OASI) programs clearly dominate the agency's workload and the percentage of its clients. an appropriate organizational structure ~ ~ ~ ~ . . .~ , ^. ~ ~ _ should focus on supporting these programs as efficiently as possible. The committee found that the SSA's technical resources and technical management were divided between two organizations: Operations and Management. It is the committee's conclusion that this structure reduces overall effectiveness and cohesion in delivering technical systems and services. It seems clear that consolidating the technical organizations will result in a more effective structure. The committee endorses Commissioner King's initiative to reunify the agency's technical resources under a deputy commissioner for systems. Technical management must act to (~) formulate management policy, (2) manage allocation of resources, and (3) assure the quality of technical design. While SSA's commissioner bears the ultimate responsibility for formulating management policies, it is the practice of many large organizations to establish a board, council, or committee as a formal mechanism for jointly formulating management policy.

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7 Even though the commissioner and her executive staff function in this area, the committee found that other groups also set management policy. The committee recommends that the commissioner establish and chair a formal management policy board with exclusive responsibility for setting management policy, including setting service-leve' objectives, project" and budget-ranking criteria, and such other matters of management policy that may be assigned to it. The SSA's Information Technology Systems (ITS) budget does not include internal labor costs. Separation of the ITS budget items from their associated internal labor costs does not bring together all the cost information needed for managing projects and decision making. The principal symptom of this is that software programs are developed and tested but cannot be installed because hardware or computer capacity is lacking. The committee recommends that the commissioner, and/or the chief financial officer, review the management aspects of the budgeting process to effectively tie together the approval systems of both the labor and Information Technology Systems budgets. Technical design review and software quality assurance must be the responsibility of individuals having the requisite technical expertise. The expertise of individuals who evaluate software quality should equal or exceed that of the software's developers. A general scarcity of such high-level expertise within the SSA and constraints associated with outside contractors lead the committee to recommend that the Deputy Commissioner for Systems have full responsibility and be accountable for technical design review and software quality assurance and for establishing the appropriate policies, practices, and procedures to uphold this responsibility. The lack of a single technical organization for SSA has had undesirable effects on important activities that (1) are not being done, such as telecommunications integration; (2) are being done improperly, as in the case of technical review by the systems review board; or (3) are being done informally in a less than satisfactory way, such as the establishing of new links between the programmatic system and the personal computer network. Since the committee's principal concern, regarding the SSA's ability to better integrate its systems and resources in support of its mission, relates to the fragmentation

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8 of technical resources, it recommends that the Deputy Commissioner for Systems be charged with establishing plans, programs, and policies that direct and strengthen technical systems integration management. SSA's Work Force Without careful attention to the human needs of the organization, no systems modernization plan is likely to succeed. The agency's human resources plan must consider the skills required of its work force. its training and educational requirements and the motivation of its staff. O In addressing the development of the SSA's work force over the next decade, several factors must be considered. First, the work content and workplace will evolve rapidly under the impact of a terminal-driven environment replacing a paper-driven one. Second, the composition of the work force will change, both at the operations level and at the technical level, driven by the changing demographics of available employees. The implications of these changes will be felt in both the management of human resources and in the need for education and training at all levels of the SSA to deal with the changing environment. The effects of automation at the SSA have been most notable over the past 2 years, with the redistribution of workload from district offices to teleservice centers being the most prominent. Also, there have been improvements in work force productivity and service to clients for Title II programs, such as OASI. Automation has allowed fewer people to do the work that is currently done and has made it possible to accomplish routine work in fewer employee hours. Automation will certainly eliminate the need for some manual tasks, and the geographical distribution of the work force and the tasks it performs are likely to change significantly. Redistribution of the workload among processing centers, regional offices, district offices, teleservice centers, and headquarters will be possible. All of the benefits of automation should not be taken in the form of work force reduction. By improving productivity and providing more information sunnort to its workers, the SSA will be able to increase the quality of its service. ~ ~ e ~ ~ 1 Through the Implementation of sophisticated automation systems, it is possible tor an organization to maintain or improve service even though the skill level of its new workers may be declining. However, to develop such sophisticated systems, the SSA will need a more skilled and motivated technical work force. For SSA's technical workers, new system requirements and developments will

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9 continue to increase demands for contemporary skills and openness to change. Personnel with superior technical skills are in short supply at the SSA. The agency will have to compete for people with these skills. In addition, special and frequent training along with Opportunities for hands-on experience are essential elements in a total modernization program. The committee has no doubt that the SSA will need to supplement its technical work force with outside contractors, but it must also have very competent technical workers and managers on its permanent staff. With colleges and universities graduating computer science students, more computer professionals are now entering the work force with formal education and training. Up to now the demand for software professionals has outstripped supply, and that should remain so for those with highly developed skills and experience. However, the committee believes that the situation for recruiting entry-level computer professionals may be improving. Also, other sources may be defense contractors that are scaling down. Skilled technical workers can be attracted by challenging assignments and stable employment, with less importance placed on salary structure. While the majority of its work force for this decade is already employed, new workers in significant numbers may be entering the SSA in the next century. The agency, therefore, must place great emphasis on training and educating its workers. Even the present work force will require substantial transitional training. Technology aids such as learner-paced training packages and "help" screens can greatly facilitate learning. The SSA should incorporate strategic initiatives into its modernization plans aimed at stimulating and motivating the work force and at promoting recruitment, training, and retention. An environment must be created in which technology is viewed as providing an opportunity for personal growth and as a way to achieve levels of service consistent with client expectations. Since human resources are a critical component for carrying out the agency's mission and thus deserve very high priority, the committee recommends that the SSA establish an Office specifically oriented toward and charged with the responsibility of managing the human resources transition. Technology Technology-induced changes at the SSA are inevitable, and managing them well will be both a great challenge and a great opportunity for improving service and effectiveness. Over time, changes in demographics and client lifestyles will have an impact on the SSA's workload. Todays exceptions or special cases are likely to become a greater proportion

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10 of SSA's workload in the future. Partial or no automation of low-volume workloads has created gaps in the automated support of SSA's programmatic functions, and these gaps mI! widen in the future. Automation of low-volume or complex cases must be increased. Recognizing that this is a continuing condition, the committee recommends that the SSA continue its transition to an on-line automated system, eliminating the most onerous paper-based manual [asks that still typli~y its overall operations. The committee further recommends that the SSA provide for technological change as an integrated part of its plans to automate all its critical, mandated functions. The committee also recommends that the SSA's computer operations evolve so that current second- generation systems are phased out by the year 2000. Automation at the Program Service Centers Up to now the agency has centralized its automation technology at its National Computer Center (NCC) to support its nationwide operations. However, the ubiquity of the personal computer and its inexpensive software wall offer cost advantages over a strictly mainframe-based architecture. For this reason, the SSA must be cautious about relocating surplus NCC mainframes to its program service centers (PSCs) to perform tasks that are better suited to small computers and networks. Furthermore, the committee does not believe that relocating mainframes to the PSCs wit} enhance SSA's backup and recovery of the NCC and may actually make matters worse. Automation Directions for SS! Recently, the SSA has undertaken to modernize its automated support for the Supplemental Security Income (SSI) program. The committee believes that SSA should consider implementing this initiative using a distributed systems architecture rather than continuing to invest in the current architecture of mainframe-based applications and "dumb" terminals.

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1 1 Toward Advanced Application Specifications In developing new applications, the SSA must change from focusing on the process to focusing on the information. Such a data- and information-oriented dimension will facilitate a matrix approach for planning service and system enhancements and consensus building. The objective is to determine at a detailed technical level what information the applications are to provide, rather than specifying how they should be structured or developed. In so doing, the SSA will be able to provide a foundation for technical decision making based on its information-oriented structure and information needs. REFERENCE National Research Council. 1990. Systems Modemization and the Strategic Plans of the Social Security Administration. Washington, D.C.: National Academy Press.

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