The Social Security Administration's

Decentralized Computer Strategy: Issues

and Options

April 1994

OTA-TCT-592

NTIS order #PB94-173986

GPO stock #052-003-01369-0
Recommended Citation: U.S. Congress, Office of Technology Assessment, The Social

Security Administration’s Decentralized Computer Strategy: Issues and Options,

OTA-TCT-592 (Washington, DC: U.S. Government Printing Office, April 1994).

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ISBN O-1 6-(1431 74-3
Foreword

T

he Social Security Administration is one of the largest federal

service agencies, based on the number of clients and employees

and the size of its budget. Millions of older, disabled, and low-income Americans depend on SSA benefits to make ends meet.

However, SSA is struggling to meet congressional and public expectations for service delivery because of the relentless increase in its workload and the constraints on staff and resources.

Information technology is a vital tool for SSA for providing responsive and cost-effective service. The House Committee on Appropriations asked the Office of Technology Assessment to review SSA’s plans

for its latest round of technology modernization—known as the intelligent workstation and local area network program, or IWS/LAN—that

will use decentralized networks of personal computers at SSA and the

state offices. OTA found that SSA’s planned evolution to IWS/LAN is

technically sound and compatible with generally accepted public and

private sector practices. But to realize the full benefits of IWS/LAN,

SSA will need to improve its service delivery planning and think more

creatively about the possibilities for electronic delivery.

This report provides Congress with OTA’s evaluation of SSA’s decentralized computer strategy and service delivery planning. It offers a

range of congressional options for funding SSA’s technology modernization, including possible benchmarks and milestones to help SSA

achieve a higher return on its information technology investments. The

report highlights some of the opportunities and challenges faced by a

major federal agency in: 1 ) implementing the Administration’s “National Performance Review** and “National Information Infrastructure” programs, and 2) addressing issues raised in OTA’s 1993 report Making

Government Work: Electronic Delivery of Federal Services.

OTA appreciates the assistance of the many SSA and General Accounting Office staff who provided input and reviews, as well as the

workshop participants and others who participated in the study. OTA

values their perspectives and comments; the report is, however, solely

the responsibility of OTA.

ROGER C. HERDMAN

Director

. . .

Ill
Project Staff

Peter Blair

Assistant Director

OTA Industry, Commerce, and

International Security Division

James W. Curlin

Program Director

OTA Telecommunications and

Computing Technologies

Program

ADMINISTRATIVE STAFF

Liz Emanuel

Office Administrator

Michelle Smith

Secretary

Karolyn St. Clair

PC Specialist

PRINCIPAL STAFF OTA CONTRACTORS

FRED B. WOOD Richard P. Adler and

Project Director Mary S. Furlong

SeniorNet

Alan Buzacott

Analyst Thomas Grundner and

William A. Beasley

Vary T. Coates National Public Telecomputing

Senior Associate Network

Joe Raguso Michael Michaelis

Analyst Partners in Enterprise, Inc.

Jean Smith Nancy Shor

Project Editor National Organization of Social

Security Claimants’

OTHER OTA STAFF REVIEWERS

Representatives

Sylvester Boyd

TIS Manager

Emilio Gonzalez

Analyst

Tom Hausken

Analyst

David Jensen

Analyst

Kerry Kemp

OTA Managing Editor

Katie Maslow

Senior Associate

iv
OTA WORKSHOP

PARTICIPANTS

Robert E. Greeves (Chairperson)

Deputy Director, Center for

Information Management

National Academy of Public

Administration

Eileen Applebaum

Associate Research Director

Economic Policy Institute

Larry Bacon

Senior Vice President

The Travelers Companies

Ralph deJuliis

Executive Vice President

National Council of SSA Field

Operations Locals

Renato A. DiPentima

Deputy Commissioner for Systems

Social Security Administration

John R. Dyer

Deputy Commissioner for Finance,

Assessment, and Management

Social Security Administration

Jane Fountain

Assistant Professor

Harvard University

John Gage

President, American Federation of

Government Employees

Social Security Administration

Gordon Gillesby

President

DRAGnet

Charles L. Gold

Ernst & Young

Charles Jones

Director

Michigan Disability Determination

Service

contributors

Susan K. Kinoy

Project Director

Supplemental Security Income Appeal

to Conscience

Stanley Kress

Director

Idaho Disability Determination Service

Henry Philcox

Chief Information Officer

Internal Revenue Service

Nancy Shor

Executive Director

National Organization of Social

Security Claimants’ Representatives

Robert Woods

Deputy Assistant Secretary for

Information Resources Management

Department of Veterans Affairs

GAO REVIEWERS AND

CONTRIBUTORS

Senior GAO Representatives

Len Baptiste

Frank Reilly

Jane Ross

Other GAO Contributors

Mike Alexander

Bob Cavanaugh

Bill Hadesty

Jim Houtz

Alan Merrill

Rod Miller

Bill Oelkers

Mike Resser

Robert Rosensteel

Barry Tice

SSA REVIEWERS AND

CONTRIBUTORS

Designated SSA Liaison

Officials

John Dyer

Jackie Newton

Bob Tinder

Other SSA Contributors

Gary Augustine

Martin Baer

Rich Benton

Dan Brulinski

Ann Burgan

Kwayne Claybaugh

Carl Couchoud

Rhoda Davis

Renato DiPentima

Glenna Donnelly

v
Dick Eisinger

Robert Em rich

John Erwin

Rich Fenton

Don Fooks

Jack Freel

Pat Gracie

Bill Hinkle

Boz Hulcher

David Jenkins

Steve Kautsch

Jim Keiner

George Kullgren

Mark Lassiter

Toni Lenane

Huldah Lieberman

Dean Mesterharm

Vince Pianalto

Paula Pierce

Ruth Pierce

Jerry Reiger

David Richardson

Tom Robinson

Barbara Schnackenberg

Jim Sheridan

Barbara Sledge

Edward Slininger

Ron Sribnik

Martin Sussman

LaVerna Williams

OTHER REVIEWERS AND

CONTRIBUTORS

Jacqueline Alfonso

DRAGnet

Jim Coseo

New York Disability Determination

Service

Mike Howland, Jim Miller,

and Leon Dixon

Information Technology Division

California Department of Social

Services

Steve Kolodney

California Office of Information

Technology

Roland Owens, Jack Caraher,

Allen Gouse, Sanford Hostetter,

and Dennis Unger

Disability Determination Service

Commonwealth of Virginia

David Sellars

Florida Disability Determination

Service

Howard Thorkelson

Pennsylvania Bureau of Disability

Determination

Len Tozier

Disability Evaluation Division

California Department of Social

Services

Chapin Wilson

American Federation of Government

Employees

vi
1

2

3

4

5

Executive Summary 1

Findings 2

Policy Options for Congress 2

Summary and Policy Options 5

Introduction 6

Findings on SSA’s IWS/LAN Technology Program 10

Policy Options for Implementing the IWS/LAN

Technology Program 23

The Challenges of SSA’s Growing

Workload 29

Social Security Administration Programs 29

Service Delivery Challenges 31

The Need for Change 36

Social Security Administration’s Planning

Process 39

Planning in the 1990s 4 0

Agency Strategic Planning 41

Service Delivery Planning 42

Information Systems Planning 43

Human Resources Planning 47

Facilities Planning 48

Reengineering and Total Quality Management 48

Conclusion 51

SSA’s Plans for Using IWS/LAN

Technologies 53

SSA Systems Plans 53

Analysis of IWS/LAN Technologies 61

SSA’s Justifications of IWS/LAN 63

Analysis of SSA Justifications for IWS/LAN 65

Electronic Delivery of the Social

Administration’s Services 69

Evaluating SSA’s Electronic Service De

Improving SSA Service Delivery 75

Index 83

Security

livery Plans 70

contents
——..

Executive

Summary

T

he Social Security Administration (SSA) distributes

benefit payments to more than 47 million people each

month, and about $350 billion in total benefit payments

each year. Millions of older, disabled, and/or low-income

Americans depend on SSA benefits to make ends meet. Over 200

million people have Social Security numbers that are widely used

for recordkeeping and identification purposes. And SSA tracks

the earnings and accrued benefits of over 140 million working

Americans.

An ever-increasing workload, combined with staff reductions,

threatens SSA’s ability to meet congressional and public expectations for service delivery. The agency’s toll-free 800 telephone

numbers are severely overloaded during peak periods, for example, and its Disability Insurance benefits program is in serious distress with a large backlog and long processing delays.

Today, information technology is essential to SSA in carrying

out its mission. Indeed, SSA would literally collapse without the

use of computers and telecommunications. To carry a growing

workload, SSA is placing high hopes on its next round of technology modernization-a 5-year, $1. 125-billion automation investment fund commonly referred to as the IWS/LAN Technology

Program. IWS/LAN is short for “intelligent workstation (IWS)

and local area network (LAN).” The workstations are current generation, off-the-shelf microcomputers (i.e., personal computers

or PCs), and the LANs are a widely implemented means of interconnecting microcomputers in local networks that can, in turn, be

tied together into larger networks.
2 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

FINDINGS

The Office of Technology Assessment (OTA)

concludes that SSA’s planned evolution from

● ’dumb” terminals (with only minimal local processing or storage capability) to networked microcomputers is well within widely accepted government and private sector practices. Many agencies

and companies have already made this transition.

SSA has specified a flexible, off-the-shelf microcomputer platform that is available at a low perunit cost and will allow upgrades as available and

needed.

It is important to emphasize, however, that

SSA’s IWS/LAN technology planning and testing

are well ahead of the agency’s understanding of

how to use IWS/LAN to upgrade service delivery.

SSA’s strategic and information systems planning

has improved markedly in recent years, but service delivery planning is lagging. Only recently

has SSA management included meaningful customer and labor participation in the planning effort to improve sex-vice delivery.

OTA concludes that, while IWS/LAN is a flexible technology and can be properly viewed as part

of the SSA infrastructure for service delivery, a

tighter connection needs to be made between the

technology and the expected improvements in service delivery to make best use of IWS/LAN. To

strengthen the planning for service delivery, it will

be necessary to allocate more staff to the planning

group and assure that the group has authority for

integrated strategic planning and management

that cut across all SSA offices and programs. The

planning group also needs members who have

strong expertise in electronic service delivery.

OTA’s review suggests that, while SSA’s current electronic delivery program is exploring or

using a wide range of technologies and applications, it is underfunded and is missing some key

information technology opportunities. As a consequence, SSA is not developing a complete understanding of what role IWS/LAN technology

should play in the larger context of electronic delivery. Revising priorities and reallocating staff

and funds could help increase the chances that the

IWS/LAN technology program will succeed.

OTA believes that IWS/LAN, if properly

deployed, could substantially improve SSA’s service delivery. Unfortunately, however, the agency’s

cost-benefit analyses and technology transition

planning to date provide little help in understanding IWS/LAN’s potential to improve delivery of

services or reinvent SSA operations. Although

SSA does have a comprehensive planning and

budgeting system in place, it is not yet being used

to estimate the costs, benefits, and performance

impacts of IWS/LAN. This will be difficult to do

well until service delivery planning improves.

Determining eligibility for disability benefits

is acknowledged as the most troubled SSA service

and is the current focus of SSA’s reengineering efforts. State Disability Determination Service

(DDS) offices evaluate disability applications,

make decisions, and conduct continuing reviews

of eligibility. State DDS offices are fully funded

by SSA, but state DDS staff are state, rather than

federal, employees and operate pursuant to numerous state (as well as federal) regulations.

OTA’s review indicates that the states strongly

support the modernization of state DDS offices,

but have concerns about a range of technical and

procurement matters. SSA has addressed these

concerns over the past year. But continuing differences in federal and state perspectives suggest that

a joint SSA-state review is needed to further

streamline the modernization process and to make

best use of available funds. A joint review team

might also consider: SSA’s priorities for IWS/

LAN installation in state DDS offices; relative

priorities between DDS and SSA offices; the findings and recommendations (when available) of

SSA’s disability process reengineering task force;

and broader state plans for electronic service delivery in which SSA could participate.

POLICY OPTIONS FOR CONGRESS

The primary congressional policy options relevant to this OTA review involve the timing, levels,

allocations, and conditions of funding for SSA’s

current automation program.
Executive Summary [ 3

B Options for Obligation of

FY 1994 Appropriation

Congress could:

1.

2.

. . 3

Request SSA to defer the IWS/LAN procurement (and obligation of the $300 million appropriated for FY 1994);

Allow SSA to proceed as planned; or

Permit SSA to proceed with a modified procurement that reflects the results of the

agency’s interim reengineering and service delivery planning, this OTA review, and the General Accounting Office’s (GAO’s) continuing

evaluation.

Early milestones that would increase OTA’s

confidence in the agency’s ability to fully utilize

IWS/LAN technology and significantly improve

service delivery include the SSA: satisfactorily

completing the disability reengineering draft report (due March 31, 1994); strengthening its service delivery planning process; improving the balance and funding for its portfolio of electronic

delivery projects; and initiating an SSA-state review of the disability modernization program.

SSA could reprogram a percentage of FY 1994

funds (e.g., 5 percent or $15 million) for use in reengineering and in implementation of the Agency

Strategic Plan—including service delivery planning and testing.

SSA also could reprioritize the FY 1994 IWS/

LAN procurement to cover offices and locations

that offer the greatest near-term leverage for improving services, and are most likely to remain

stable under a range of reengineering and reorganization scenarios.

I Options for FY 1995 Appropriation

Congress could:

1. Provide zero funding for IWS/LAN in FY

1995;

Provide the requested funding ($130 million)

with no strings attached;

Provide FY 1995 or 1995-96 funding ($130

million or $385 million) with strings attached;

or

Provide full multiyear funding ($825 million

for FY 1995-98).

OTA believes that SSA may be able to justify

the $130 million for FY 1995 if SSA continues to

improve its service delivery planning, among other areas. Appropriating FY 1995 (and perhaps FY

1996) funds with conditions and modifications

would allow SSA to continue generally on schedule, but with added incentives to ensure the best

use of available monies. This option should keep

the IWS/LAN program on track while, at the same

time, permitting more effective congressional

oversight and holding SSA more accountable for

performance.

In OTA’s judgment, the advisability of appropriating FY 1995-96 monies in the FY 1995 budget cycle depends significantly on SSA’s ability to

meet early milestones for use of the FY 1994 appropriation. Appropriations beyond FY 1996 are

not prudent at this time, in OTA’s view, given the

lack of clarity and documentation for use of the

out-year funds.

Congress also could attach conditions to SSA’s

general operating funds. These funds total about

$5 billion (of which about $400 million funds the

SSA annual information technology budget)—all

separate and apart from the 5-year, $1. 125-billion

SSA automation investment program. Funds

could be reprogrammed or prioritized within the

SSA operating budget to cover reengineering and

service delivery priorities. Funds might also be

used to strengthen SSA’s strategic management,

which OTA believes is key to SSA's ultimate success in improving service delivery.
——

T

he Social Security Administration, in many respects, is

our nation’s largest government service agency. More

than 47 million people receive over $350 billion each year

in SSA benefit payments. SSA has issued about 360 million Social Security numbers, of which roughly 205 million are

active. In 1992, SSA issued nearly 7 million new and 10 million

replacement cards, and tracked the earnings of 140 million

people. Millions of older, disabled, and/or low-income Americans depend on SSA benefits to make ends meet. 1

The ability of SSA to deliver services quickly, efficiently, and

responsively is of vital concern to Congress, the Administration,

and the public. Congressional committees and the General Accounting Office (GAO) have urged action on the many management, personnel, and technology challenges facing SSA.2 The

Administration’s “National Performance Review” has assigned

high priority to improving delivery of SSA services,3 as have senior citizens’ and disability advocacy groups.4

1 See ch. 2 for a discussion of trends in SSA’S workload.

‘2 See, fore xanlple, U.S. congress, General Accounting OffIce, ReF~fl to the Commissioner, Social Security Admimstratl(m, Socml Seeuriry: ,!i.@uined Eforf Needed To lm -

proiv Management and Prepurejtir /he Future, GAO/HRD-94-22 (Gaithersburg, MD:

October 1 993).

J See vice president A] Gore, creating a Gw’ernmenf That Works Betrer CC COStS Lf’ss:

Repw-f ojflte Nationa/Per@mance Re\liew (Washington, DC: U.S. Government Printing

Office, September 1 993).

4 See, for example, statements of Robert Shreve, American Associati(m of Retired

Perstms; Ethel Zelenske, Nati(mal Senior Citizens Law Center; and Stan Kress, President,

National C(mncil of Disability Determinati(m Directors before a hearing on “Reinventing

the Social Security Administration” held by the House Committee on Ways and Means,

Subcommittee (m Social Security, Oct. 28, 1993.

Summary

and

Policy

Options 1
6 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

Today, information technology is essential to

SSA in carrying out its mission. Indeed, SSA

would literally collapse without the use of computers and telecommunications. Management expertise and human resources are equally important, but technology is frequently the focal point

for debate over the quality and future of SSA services.

INTRODUCTION

In its early years, SSA was in the forefront of information technology and was one of the first users of mainframe computers. A decade ago, SSA

embarked on a “Systems Modernization Plan” to

upgrade its technology bases The results of this

upgrade have been dramatic, as reflected in significant reductions in the time required for SSA to issue Social Security cards (cut from 6 weeks to 10

days), recompute annual benefit levels (cut from 4

years to 6 months), and post annual earnings reports (cut from 39 to 6 months).6

But an ever-increasing workload (see chapter

2), combined with possible staff reductions,7 once

again threatens SSA’s ability to meet congressional and public expectations for service delivery.

The use of toll-free 800 telephone numbers, for

example, has become a key part of SSA’s service

delivery strategy. But during peak periods, the

telephone system is overloaded to the point where

most callers receive a busy signal on their first attempt. SSA’s Disability Insurance (DI) and Supplemental Security Income (SSI) programs are

medically and/or means tested. This necessitates

periodic reviews to assure that recipients continue

to be eligible based on their medical and financial

condition. The joint federal-state program for initial and continuing reviews of eligibility for disability benefits is in serious distress.8 Initial determinations can take up to several months, with a

current backlog of over 725,000 cases. The backlog of continuing reviews is even larger. For SSI,

the estimated error rate is about 3.5 percent,

roughly three-quarters of a billion dollars per

year.

9 The error rate for D] is not regularly measured, but probably is at least similar to SSI. These

errors include overpayments to eligible recipients

or payments to ineligible recipients. An unknown

number of eligible people receive underpay merits

or no payments at all because benefits were erroneously denied or the persons did not apply. 10

This Office of Technology Assessment (OTA)

study focuses on SSA’s current proposal for its

next round of technology modernization-a

5-year, $1.1 25-billion Automation Investment

Fund scheduled to run from FY 1994 through FY

1998. The investment proposal is commonly re5 U.S. Congress, OfflceofTechnology Assessment, The Socia/ Se(”uri~Adn/inis/ration andlnformalion Technology, OTA-CIT-3 1 I (Washington, DC: U.S. Government Printing OffIce, October 1986).

6 See Social Security Administration, Information Systems P/an (Baltimore, MD: September 1993), p. 1-6 and figure I -1. SSA has in~plemented several technology-based services, such as automatic enumeration and issuance of Social Security cards at birth, and automated issuance of personal earnings and benefit statements.

7 SSA’S full-time equivalent staffing level dropped from about 83,000 persons in FY 1983 to 63,000 in FY 1990, and has remained s[able

since. Further cuts due to government-wide downsizing are possible.

8 See U.S. Congress, General Accounting OffIce, Social Security: Increasing Number ofDisabi/ity Claims and Deteriorating Ser~tice,

GAO/HRD-94-l 1 (Gaithersburg, MD: Nov. 14, 1993).

9 S& U.S. Congress, House committee on ways and Means, oter~iew’ ofL’nri~/en~err( Programs: 1992 Green .Bwk, WMCP 102-44(~’ashington, DC: U.S. Government Printing Office, May 15, 1992), p. 1605. Also see Vice President Gore, op. cit., footnote 3, p. 109; Jane L. Ross,

U.S. General Accounting Office, “Processing of Continuing Disability Reviews,” testimony before the House Select Committee on Aging, Mar.

9, 1993, GAO~-HRD-93-3; and Jane L. Ross, U.S. General Accounting Office, “SSA Needs To Improve Service for program Participants,”

testimony before the House Committee on Ways and Means, Subcommittee on Social Security, Mar. 25, 1993.

10 The National Caucus and Center on Black Aged estimates that 1.5 milli(m elderly poor people eligible for SS1 are not receiving benefits.

See Joyce T. Berry, former U.S. Commissioner on Aging, U.S. Department of Health and Human Services, statement before the Congressional

Black Caucus Forum on “Aging: A Black Financial Crisis,” Sept. 17, 1993.
Chapter 1 Summary and Policy Options 7

SSA is using information technology to

he/p make the transition from a

paper based to an electronic agency

Top: SSA has thousands of pages of

regulations that take

up several feet of shelf space per set

Bottom left: Many SSA employees still

work in a sea of paper.

Bottom right: Individual disability case

files frequent/y generate thick folders of

documents that are moved around by

pushcart,

ferred to as the “IWS/LAN Technology Program,”

and is separate from SSA’s operating budget.

IWS/LAN is short for “intelligent work station

(IWS) and local area network (LAN).” The workstations are current generation off-the-shelf

microcomputers, and the LANs are a widely implemented means of interconnecting microcomputers in local networks that can, in turn, be tied

together into larger networks. The SSA Automation Investment Fund includes more than just microcomputers and LANs, which account for about

30 percent of the total anticipated expenditures.

Ergonomic furniture and site preparation represent another 30 percent, and training and telecommunications about 10 percent. Unspecified reengineering accounts for the remaining 30 percent. 11

Consideration of SSA’s modernization program is complicated by several factors. First,

SSA’s technology planning historically has led

strategic and operational planning by several

years. Prior GAO, National Research Council,

11 SSA has rcklsc~ 1(S estlrn;ite~ ~l](~a[ion of the $1.125 billi{m as follows” (original allocation followed by current estimates): lw’S/LAN

(dccruisul from $34 I nlrllit)nto$316 mlllitm); crg(m(mlic fum[ture and site prcparati(m (increased fr(ml $307 rnilli(m to $422 mil]i(m); supp(~rt

stm Ices and training (decreased frtm~ $42 n}llli(m to $25 ml]] ion); telec(m~munications and maintenance (increased frtm~ $122 million U} $125

rnlll]on), and recngincenng Agency Stratcg]c Plan ]mplcmcnlati(m (decreased fr(~m $313 milli(m to $237 mini(m),
8 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

and OTA reports, among others, have criticized

SSA for inadequate strategic planning. 12 SSA has

made notable progress in developing its “Agency

Strategic Plan” in 1991 and followup tactical

plans. 13 Service delivery planning is still weak,

giving rise to concerns about the ability of SSA to

properly execute the modernization program. A

service delivery plan can be viewed as a mid-level

plan that establishes linkages between strategic

and tactical planning. Second, the Administration’s “National Performance Review”14 and

OTA’s Making Government Work, 15 among other

reports,

16 have highlighted the importance of information technology in reinventing government

and improving service delivery. But these studies

also emphasize the major challenges facing SSA

and other agencies moving into the era of electronic service delivery. This is not an easy transition

under the best of circumstances. Third, the tightly

constrained federal budget, with little real increase in discretionary spending, means that all

agency proposals are being more rigorously scrutinized. In prior decades, agency information

technology programs were approved largely on

faith without the more detailed explanations and

justifications now required.

The Administration requested congressional

approval of the entire $1.125 billion in no-year

funds (that could be obligated over a 5-year period) as part of the SSA appropriation for FY 1994.

GAO took issue with the SSA’s Automation Investment Fund, citing concerns about documentation for SSA’s technical solution, service delivery

benefits and total resource requirements, measurement of performance and costs, and implications for state disability determination activities. 17 The House Committee on Appropriations

shared GAO’s concerns and asked SSA to address

these concerns before obligating the $330 million

I z See U.S. Congess, Geneml Accounting Office, Social Security Administration: Stable Leadership and Better Marrwement Needed TO

Imprw’e Eflix-ti\*eness, GAO/HRD-87-39 (Gaithersburg, MD: March 1987; Social Security: Status and E\’aluation ofAgency Management Impro~’ement /nitiati\es, GAO/HRD-89-42, July 1989; Health and Human Ser\ices Issues, GAO/OCG-93-20TR, December 1992, pp. 11-16;

Social Securify: Susrained Efjorf Needed, op. cit., footnote 2. National Research Council, Computer Science and Telecommunications Board,

Elemen/s of System Modernizafionjbr the Social Securiry Adminis/ra/ion (Washington, DC: National Academy Press, 1991 ). U.S. Congress,

Office of Technology Assessment, The Social Security Administration and Injiwnation Technology, OTA-CIT-31 I (Washington, DC: IJ.S.

Government Printing Office, (lctober 1986). John Harris, Alan F. Westin, and Anne L. Finger, Reference Point Foundation, “innovations for

Federal Service: A Study of Innovative Technologies for Federal Government Services to Older Americans and Consumers,” contractor Piiper

prepared for the Office of Technology Assessment, February 1993, see esp, pp. 47-64. OffIce of inspector General, Department of Health and

Human Services, “Social Security Client Satisfaction: Fiscal Year 1993,” June 1993.

13 see Swial security Administration, ‘“The Social Security Strategic Plan: A Framework for the Future,” September 1991; “SSA Strategic

Priority Tramition Guidance,’ ’June 1992; and “lmplernentation of the Social Security Administration’s Strategic Plan-A Status Report,” June

1993.

14 vice Resident Gore, op. cit., footnote ~.

15 U.S. congress, office Of Technology Assessment, Making (Wernment Work: Electronic De/i~’ery of Federal Ser\w’es, OTA-TCT-578

(Washington, DC: U.S. Government Printing Office, September 1993).

16 Also see U . . S Genera] Sewices Administration, Service IO the Cilizens: Project Report, KAP-93- I (Washington, DC: GSA, information

Resources Management Service, February 1993).

I T See letter from Frank W. Reilly, Director, Hunl~ Resources Information Systems, Infornlation Management and Technology Divkwn,

U.S. General Accounting OffIce, to Louis D. Enoff, then Acting Commissioner of the Social Security Administration, Mar. 30, 1993. SSA engaged in lengthy discussions with GAO. In a Nov. 17, 1993, letter from Lawrence H. ‘Ehompson, SSA’S Principal Deputy Commissioner, to

Donald A, Chapin, Assistant Comptroller General, SSA stated its belief that actions to date “are adequate to address all issues in GAO’s letter

and that the IWS/LAN pr(~~ct should proceed.” In a Dec. 23, 1993, letter from Frank W. Reilly, Director, Health, Education, and Human Services Infomlation Systems, Accounting and Information Management Division, to Lawrence H. Thompson, SSA’S Principal Deputy Commissioner, GAO responded that “we do not believe the issues [previousl~’ raised by GAO] have been addressed adequately to fully support funding

your [SSA’S] planned IWS/LAN acquisition.”
.—

Chapter 1 Summary and Policy Options 9

SSA's Intelligent work station and local

area network program IS intended to

provide most SSA employees with a

personal computer and ergonomic

furniture.

Top: Personal computers can support

walk-in counter service in an SSA office

Bottom left: An SSA employee

demonstrates use of the graphical user

interface on a personal computer.

Bottom right: Personal computers can

help SSA employees conduct client

interviews in an SSA office.

appropriated for FY 1994.18 The Senate Committee on Appropriations, citing similar concerns

about inadequate SSA justification as well as general funding constraints, appropriated $220 million. 19 The House and Senate compromised on a

$300-million FY 1994 appropriation for the IWS/

LAN automation program.20

The House Committee on Appropriations

asked OTA to conduct a review of the SSA’s automation program and address the concerns of the

I ~ U.S. Congress, House Conlrnj[[ee on ,4ppropr]atiom, Departments of Labor, Heal~h and Human Sen’ices, and Edu@ion and Related

Agencie.$ApproprlalionsA cf, Fiscal Year 1994, House Report 103-156 (Washington, DC: U.S. Government Printing Office, June 24, 1993), pp.

9(-91

19 ~[ s congress, senate Conlnllttee on Apprt)priatlons, Departments of Lubor, Health and Human Serl’ices, ati[.abor and Re/fllpdA~Cn-

. .

cie! Appropvaions Acf, F1.$ca/ Year 1994, Senate Report 103-143 (Washington, DC: U.S. Government Printing Office, Sept. 15, 1993), pp.

152-153. The Senate Committee on Appropriations expressed similar concerns in language accompanying FY 1993 appropriation for SSA. See

U.S. Congress, Senale Cmnrmttee (m Appropriations, Departments of Labor, Health and Human Senices, and Labor and Related Agencies

Appropriaflon$ Ac(, Fiscal Year 1993, Senate Report 102-397 (Washington, DC: U.S. Government Printing Office, Sept. 10, 1992), pp.

169-170.

20 The $300 millwn was appr(}priated as ‘“no-year” funds, meaning the funds do not have to be obligated in the year appropriated. See Social

Sccurlty Adminislrati(m, ‘“Appwti(mment and Reapportionment Schedule: Fiscal Year 1994,” OMB Fornl 132, Nov. 23, 1993.
10 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

committee and GAO. The committee directed

SSA to defer obligation of the FY 1994 appropriations until OTA completed its review, SSA could

respond to the OTA findings (as well as any continuing GAO questions), and SSA reports back to

the committee.21

This chapter summarizes OTA’s findings on

each of the issues raised by the House Appropriations Committee and GAO, and then presents

and discusses a range of relevant policy options.

Subsequent chapters discuss in greater depth:

SSA’s increasing workload that drives the need for

modernization; SSA’s strategic and information

systems planning process; SSA’s plans to use

IWS/LAN technology; and opportunities for electronic delivery of SSA services.

FINDINGS ON SSA’s IWS/LAN

TECHNOLOGY PROGRAM

OTA’s key findings are presented below in the

context of the concerns originally raised by GAO

and reiterated by the House Committee on Appropriations in its request for the OTA review.

Documentation for SSA’s

Technical Solution

GAO originally found that SSA had not documented the basis for its selection of IWS/LAN

technology.

22 From a narrow technical perspective, OTA concludes that SSA’s planned evolution

from “dumb” terminals (with only minimal local

processing or storage capacity) to networked microcomputers is well within widely accepted practices of both the government and private sector.23

Many agencies and companies have already made

this transition. OTA found that SSA has adequately documented the selection of IWS/LAN.24

(GAO has now reached a similar conclusion. )

The recommended microcomputer (using a

486 computer chip and IBM-compatible operating system) and local area network (token ring,

also IBM-compatible) are proven technologies

available off the shelf at competitive prices. The

term intelligent workstation is actually misleading because it suggests a more powerful (and more

expensive) workstation than is planned. PC/LAN

would be a more descriptive term for this technology.

The shift to networked microcomputers will allow SSA employees to benefit from the word-processing, records management, integrated file access, distributed processing, and other computer

applications that are difficult or impossible using

dumb terminals networked to mainframe computers.

25 With microcomputers, all of these applications can be executed with user-friendly windowstype screen displays (known as graphical user

interfaces). Microcomputers, when fully utilized,

should help decentralize SSA’s computer resources and increase its overall computer capacity

and flexibility. The local area networks permit microcomputers to be linked together at the local office level, and perhaps by regions or other geographic areas, and still be connected via file

2 I U.S. Congress, House Committee on Appropriations, op. cit., footm)te 18.

22 Letter from Frank W. Reilly, U.S. General Accounting Office, Mar. 30, 1993, op. cit., footnote 17.

23 The National Research Council reached a similar conclusion in prior studies. See National Research Council, C(mlputer Science and

Telecommunications Board, Systems A40derrzi:alion and/he Strategic Plans oflhe Social Set~/r~~Adminis/rarion (Washington, DC: Natitmal

Academy Press, 1990); and National Research Council, op. cit., footnote 12.

24 See Ch. 4 discussion, SSA conducted nunlerous studies and tests resulting in dozens of papers and reports. For the primary d(xummation, see Social Security Administration, “The S(~ial Security Administration Analysis of the Alternative Architectures for the Distributed

Data Processing Pi lots,” May 24, 199 1; ‘The Social Security Administration’s Analysis Methodology of the Performance and Benefits fr(m~ the

Distributed Data Processing Pi lots,” Jan. 17, 1992; ‘The Social Security Administration’s Analysis of Costs, Benefits, and Petiomlance fr(ml

the Distributed Data Processing Pi lots,” 1993 draft; and “Flexibilities and Capabilities of the Social Security Admin istrati(m’s IWS/LAN Architecture,” December I 993.

2s The Social Security Administration has identified 13 applicati(ms and 38 other software packages currently operating at vari(ms IWS/

LAN sites, and 59 tactical plans and 39 automatic data-processing plans that depend on IWS,’LAN implementation.
Chapter 1 Summary and Policy Options I 11

servers and telecommunication links to SSA’s

mainframe computers.

SSA’s selection of IBM-compatible microcomputers and LANs is a judgment call, but technically defensible. SSA operates an IBM-compatible

mainframe computing system, and this real it y was

weighted heavily in the technical evaluation process, especially for the token ring selected as the local area network technology. OTA reviewed

whether the selection of 486 microcomputers is

overkill with regard to the computing power really

needed on most SSA desktops, or, on the other

hand, whether the 486 microcomputer will be obsolete by the time the procurements are actually

executed and deployed, necessary software written and installed, and users properly trained.

OTA believes that the 486 microcomputer is a

prudent choice because it is off-the-shelf technology available at a low per-unit cost, and because

software and application advances usually require

more, not less, disk storage capacity and processing speed. Also, SSA has stated that the microcomputer specifications will be modified at the

time of actual procurement, if warranted (e.g., if,

by then, next-generation microcomputers are

available off the shelf at low cost). SSA has specified a flexible microcomputer platform that will

allow memory and application upgrades as needed and available.

In the course of examining the IWS/LAN plan,

OTA also briefly reviewed the SSA mainframe

computer operation at the National Computer

Center in Baltimore, MD, and concluded that SSA

has substantially upgraded its mainframe computers and peripheral equipment since the 1986 OTA

report on SSA automation. The mainframes and

disk storage units are the best available off-theshelf technology. However, the ability of the computer center to remotely manage, monitor, and

maintain a network of tens of thousands of IWSs

and hundreds of LANs has not been established.26

SSA needs to anticipate possible technical and

staff adjustments to address network management

problems that may develop as IWS/LAN testing

and implementation are scaled up.

Relationship of Technical Solution

to Service Delivery Strategy

GAO concluded that SSA has not completed its

service delivery plan and has not linked its proposed technology strategy to specific service delivery improvements. GAO questioned SSA’s

plans to implement IWS/LAN without first determining the service delivery improvements that

could result from IWS/LAN. GAO believes that

SSA may be missing significant opportunities to

use information technology to improve the quality

and cost-effectiveness of service delivery. GAO

further noted the absence of performance goals,

schedules, and resource requirements necessary to

improve service delivery .27

Before the GAO review, SSA did address service delivery in the context of the 1991 ‘*Agency

Strategic Plan” (ASP),28 the "Information System

Plan” (ISP, first issued in 1991, and updated in

1992 and in late 1993),29 and various tactical

plans intended to implement aspects of the ASP

and ISP. GAO credited SSA for improvements in

agency strategic planning, but concluded that this

effort fell well short of that needed to identify specific service delivery improvements.

Since the GAO review, SSA has agreed to prepare a service delivery plan and has taken some

initial steps in this direction. SSA upgraded its

service delivery planning to the level of the chief

policy officer (who reports directly to the principal deputy commissioner), who has prepared two

26 SSA does cenlrally manage the current 40,000 dumb [errninals, plus the IWS/LANs at pilot-test sites.

ZT Fr~k Reilly, GAO, {e[[er, op. cit., f{x)tnote ] 7, Mar. 3~, 1993.

28 &X1al Security Administrati(m, op. cit., fo(m)te I ~.

29 Social Security Administration, /~@rmarion S}.r/em.s P/an (Baltimore, MD: September 1991, 1992, 1993).
12 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

drafts of a service delivery concept paper.30 The

drafts develop some goals and principles for service delivery. The first draft included a fairly detailed discussion of delivery alternatives and implications for reorganizing SSA. SSA’s senior

management concluded that this latter discussion

was premature; thus, the second draft is philosophical and conceptual in nature. SSA also developed an outreach strategy for obtaining further

input on strategies for service improvement,31 although its status is uncertain given the absence of

detailed service delivery scenarios and the apparent lack of consensus on which scenarios warrant

serious consideration.

OTA’s review of prior and current SSA planning efforts indicates that, while strategic and information system planning has improved markedly in recent years, service delivery planning is still

in the very early stages. SSA appears to have made

only limited progress since the 1991-92 timeframe when GAO32 and National Research Council (NRC)33 reports found SSA’s service delivery

planning to be inadequate. About 1 year ago, SSA

set a goal of completing a service delivery plan by

the end of 199334—a goal it was unable to meet.

The limited effort on service delivery planning

over the last 3 years contrasts sharply with the substantial staff and resources devoted to the planning, testing, and implementation of IWS/LAN.

SSA also has been slow to develop a human resources plan, although a draft now exists.35 The

plan provides a useful conceptual framework for

developing and managing human resources, but

does not address specific staffing, training, or

work environment issues associated with IWS/

LAN deployment or reengineering. SSA has prepared numerous tactical plans for implementing

aspects of the 1991 Agency Strategic Plan, which

SSA is currently updating. But it is unclear how

the ASP update ties into service delivery and human resources planning; perhaps the several efforts should be fully integrated.

M S{xial Security Adminishation, “lmpr(}ving Service Delively at the Social Security Administration: A Conceptual Proposal,” drafts

dated Oct. 21, 1993, and Dec. 30, 1993.

31 S(xla] Security Administration, Memorandum, “Next Steps in Service Delivery Planning—-Action,” Nov. 10, 1993.

M u s Congress, Genera] Accounting office, Report to the Chaim]an, Senate Special committee on Aging, 5’SA ComPu~er~: l-ong-Runge . .

Vision Needed To Guide Fufure Syslems Modernization E“orls, GAO/lMTEC-91-44 (Gaithersburg, MD: September 1991 ), p. 10, recon~-

mended that SSA “articulate a clear, consistent vision of how it intends to use information technology to do business in the future. The vision

should go beyond automating current processes; instead, it should be based on a fundamental reconsideration of the agency’s organization and

business processes in light of opportunities offered by current technology.” U.S. Congress, General Accounting Office, lnjmm~ion Munqqement and Technology Issues, GAO/OCG-93-5TR (Gaithersburg, MD: December 1992), p. 1 I, noted that ‘*For the most part, however, SSA has

foased on automating its existing paper-driven, labor-intensive work practices in an incremental, piecemeal fashion. While resulting in some

immediate benefits in improved service, this approach will not put SSA in a position to cope with the surge in beneficiaries looming on the

horiz(m. To capture the critically needed benefits of modernization, SSA must direct its system modernization efforts toward fundamentally

improving the way it does business.”

33 NatlOna~ Research council, op. cit., f(x)tnt)te 12, p. 3, concluded that “The SSA does not have a vision for its infOrrnatlOn systems that

encompasses what will be needed to support the agency’s mission and operations into the next century. “’’The SSA does not today have well-defined targets for levels of service to the public, nor does it convey the view that its operations are governed by such targets” (p. 27). Willis H.

Ware, Chairman, Committee on Review of SSA’s Systems Modemizati(m Plan and Agency Strategic Plan, Computer and Telec(mmmnications

Board, National Research Council, Letter Report, June 30, 1992, p. 1, concluded that “’Although the SSA has made important strides in automating its processes, it still has a long way to go before the full benefits ot”automation can be real ized. In particular, SSA needs to develop an overall

management approach that encourages active, continual improvements in quality and productivity, rather than electronically embalming current practices. ”

34 see S(xiat security Administration, “Report to the Senate Appropriati(ms Committee on the IWS/LAN ProJect,” Apr. 5, 1993, pp. 2,28.

35 S(xial security Adn~inistration, “Hun]an Resources Strategy and Implementati(m Plan,” draft, January 1994.
Chapter 1 Summary and Policy Options 13

c1 m EEJ

Top: SSA's “System Zero” serves as a test

bed for evaluating personal computer

applications.

Bottom left: An SSA employee

demonstrates the varied uses of personal

computers that SSA hopes to implement

nationwide,

Bottom right: SSA is testing personal

computer applicatlons for employees with

hearing or visual Impairments.

1 I

Also, SSA management only recently has included meaningful customer and labor participation in planning efforts. The first round of SSAsponsored customer focus groups took place in

late 1993.36 And SSA appears to be moving toward more productive labor-management collaboration on agency planning and other matters,

spurred in part by the National Performance Review’s emphasis on labor-management councils.

In the absence of a service delivery plan, SSA

has been unable to link the IWS/LAN technology

program to specific planned improvements measured against the service delivery objectives. SSA

argues that the IWS/LAN technology should be

viewed as part of an SSA information technology

infrastructure that is flexible enough to support

whatever objectives and alternatives ultimately

result from service delivery planning, and that delivery alternatives are unlikely to be so dramatic as

to disrupt the planned IWS/LAN deployment.37

GAO continues to believe that SSA should be able

~~ An OTA contractor” conducted a lin~ited series of f(~us groups during the same timeframe. See partners In EnteTtise, Inc.. “lnllJr(Jving

Social Security Services: Focus Group Discussi(ms in the Washington, DC, Area,” c(mtractor paper prepared for the Office of Technology Assessment, Novemher 1993.

37 SSA has iden[ifi~d S9 tac[lca] plans and 39 automated data-processing plans that depend on IWS/LAN ind~mentation.
14] The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

to make better linkages or connections between

the technology and measurable improvements in

service delivery, even if only as an interim step in

completing the delivery plan.

OTA concludes that, while the IWS/LAN is a

flexible technology and can be properly viewed as

part of the SSA infrastructure for service delivery,

a tighter connection needs to be made between the

technology and expected service delivery improvements to make best use of IWS/LAN. OTA’s

review suggests, however, that strengthening and

accelerating the planning effort for improving service delivery will require the allocation of more

staff operating with full authority from the SSA

commissioner and principal deputy commissioner. Also, the planning group needs authority for integrated strategic planning and management that

cuts across all SSA offices and programs. OTA believes that a larger full-time planning staff and

stronger coordination are essential. The integrated

planning and management group needs to cover

the strategic, operational, service delivery,

technology, human resources, and facilities components that will, collectively, determine SSA’s

future directions and performance. The group also

needs people who have strong expertise in electronic service delivery.38

The recently initiated SSA reengineering project may provide results helpful to both the process

and substance of service delivery planning. “Reengineering” is intended to be a fundamental rethinking about how an organization, in this case

SSA, carries out its mission. The objective is to

identify new, radically improved ways of doing

business, not just marginal improvements to current activities. SSA initiated its reengineering task

force activities in mid-1993 and decided to focus

initially on the disability benefit determination

process-generally agreed to be the SSA service

in greatest difficulty. SSA top management has

thrown its full weight behind reengineering by

providing seminars, teleconferences, videos, and

an 18-person staff (on 6-month detail) that reports

directly to SSA’s commissioner.39 The staff has already conducted over 1,000 interviews and visited

SSA offices and Disability Determination Service

(DDS) offices in a majority of states.40 A draft report on disability reengineering, expected by

March 31, 1994, will give a strong indication of

SSA’s ability to identify ways to dramatically improve service delivery and to leverage the role of

information technology—including IWS/LAN—

in making those improvements.

Documentation and Rationale for

Planned Use of IWS/LAN

GAO concluded that SSA had not adequately evaluated and justified its proposals for widespread

deployment of IWS/LAN. GAO noted that SSA

did not assess a range of alternative technical solutions and deployment strategies.41 The issue here,

as framed by OTA, is not whether IWS/LAN is an

appropriate evolution from dumb terminals (OTA

concluded that it is, as discussed earlier), but

whether SSA has adequately assessed alternative

ways to deploy and use IWS/LAN alone and in

concert with other information technologies.

SSA’s current plan envisions the purchase of

about 95,000 personal computers—82,000 for

SSA offices and 13,000 for state DDS offices.

About 13,000 computers were funded out of FY

~~ SSA could reengineer its top rnanagernent by, ft)r example, transforrmng the deputy commissioner for finance, aSSeSSnlent, and management intt) a deputy commissioner for strategic planning and management.

39 see ~)utllne of yjASenlinar by Michael Hammer, Management c~~nsultantt .’Reengineering: From Concept t{) Reality,” November 1993;

and an SSA-produced video on ‘. Creating Change” in which the SSA commissioner and principal deputy commissioner discuss SSA’S service

delivery planning and reengineering activities.

w see S[)clal Securi[y Administration, “Internal Communications Plan-–Action,” disability reengineering pr(~~ct memorandum, Nov. 9.

1993.

41 See Fr~k Reilly, GAO, letter, op. cit., footnote 17, Mar. 30, 1993.
Chapter 1 Summary and Policy Options I 15

1992 and FY 1993 budgets and are, or will be,

installed in selected SSA offices and a few DDS

offices. The remaining 82,000 are to be funded out

of the proposed $1. 125-billion IWS/LAN automation investment program, placing first priority on modernizing the SSA field offices and second priority on other SSA offices and the state

DDS offices.

OTA’s review suggests that SSA has been approaching IWS/LAN planning primarily as an infrastructure initiative. SSA has prioritized IWS/

LAN installation according to current SSA

operational and service delivery needs-essentially automating marginal improvements in the

status quo. SSA has placed less emphasis on identifying priority needs that, if met, would translate

into more dramatic improvements in service delivery. The lack of more aggressive performance

improvement objectives for IWS/LAN is understandable, given the absence of a service delivery

plan (or working performance measurement program, see later discussion), but not desirable.

SSA has deferred DDS office modernization in

most states, awaiting full development and pilot

testing of the Modernized Disability System

(MDS) that preceded the current disability reengineering project.

42 Also,

, prior SSA-sponsored

studies have suggested that the role of automation

in improving the disability process will be small

in comparison to the effects of radically changing

the organization and flow of disability work.43 It

—

remains to be seen whether SSA's disability reengineering task force will identify opportunities to

accelerate improvements using information

technology.

OTA’s review also suggests that SSA’s electronic delivery program is exploring a wide range

of technologies and applications,44 but is underfunded and missing some key information

technology opportunities. As a consequence, SSA

is not developing a complete understanding of

how IWS/LAN technology fits into the larger context of electronic delivery. Again, this situation is

understandable, given the lack of an SSA service

delivery plan and because the SSA strategic and

information systems plans—while well done—

predate the heightened interest in, and knowledge

about, electronic delivery. Also, OTA concludes

that SSA is overly conservative in its assessment

of the ability of current and future customers to

use electronic delivery (see figures 1-1 and 1-2),

and is moving too slowly on developing and test45 A more aggres- ing electronic delivery options.

sive, innovative, creative approach is needed—

one that engages the range of options and issues

presented in OTA’s 1993 report, Making Government Work: Electronic Delivery of Federal Services. 46

OTA applied the analytical framework of electronic delivery ● ’success factors” developed in

Making Government Work47 to current SSA acti4Z StKlal Swurlty Admlnistrat]tm. “Modcmlmd Disability System,” n.d.

~~ ~,llll:ir,)s, Adlc. & c(). and Planning Analysls CIlrp.~ “Review and Anal ysis of Office Auttmlati(m Qucstionnalrc ft~r the State Disability

Dctu-nllnatit~n Scm Iccs,” c(mlr;ictor riqxm prepared for the Social Security Adrninistrati(m, lnf(~m~ati(m Technt~i(~gj Systems Ro iew Staff,

June 30, 199?.

~ ]ncludlng, f{~r ~Iarllple, (JptICaI disk stf)rage, 800-nunlber expert systems, paperless records storage and pr(~ccssing, viik(mnfmncing,

and numw~us r]~lcr(~’t~rl~pl]ter-based prt)jccts. See Sf)cial Security Administration, /rr@narion Sysrems P/an, op. cit., f(xxnfm 6.

4$ Scc ~h, s disc.ussl(~n. llc c(~nlnlunlty of Pers(ms with disabilities, for example, has found computers and computer networking to h’

valiiablc ~ind c-t lst-effect i \ c. A IS(I see Richard P. Adler and Mary S. Furlong, SeniorNet, “Electronic Del i very of S(}cial Security Servms,’” c(Jntract{~r paper prcpiircd for the Office of Techmdt)gy Assessment, February 1994; William A. Beasley, Nati(mal Public Telecomputing Network.

‘The OTA NPTN Tclcf[wum PTt)ject Use t~fTclect~n~n~unicatit~ns Resources by the Social Security Adn~inistrati~m,” contractor paper prepared

f<)r the office (If Tcchnt)l{)gy Awssment, Feb. 10, 1994; and Nancy G. Shor, Natitmal Organization of !lwial Security Claimants’ Representa-

[i~ es, “SSA Scrvicc Dellverj. A Prcsentatl{m (If Current problems and Opportunities for lrnprovernent,” c(mtractor paper prepared for the Office (~fTcchn{~l(~gj Assessment, Jan. 13, 1994.

% 11 s Conurcsf ~-!office of Tcchnol(~gy Assessment, op. cit., footnote” 15.

47 lbld.
16 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

5-- 4

PCS 1

PCS and modems

1980 1982 1984 1986 1988 1990 1992 1994

SOURCE. Institute for the Future, cited m Richard P Adler and Mary S

Furlong, “Electronic Delwery of Social Securty Services, ” contractor

paper prepared for the Off Ice of Technology Assessment, February

1994, 0 4

vities. The results suggest that SSA could justifiably give higher priority and increased funding to:

●

●

●

■

■

grassroots involvement of SSA’s customers in

electronic delivery—including local advisory

groups, focus groups, pilot studies, and user

evaluations;

development and involvement of the community infrastructure (e.g., libraries, schools, and

senior citizen centers) directly or as intermediaries in electronic delivery of SSA services;

encouraging innovation in electronic delivery

of SSA services through budget set-asides,

staff development, performance awards, and

other incentives;

creating and participating in electronic directories to SSA services-as part of larger government-wide and private sector directories; and

strategic partnering in SSA service delivery—

including collaboration with other federal and

state agencies responsible for delivery of social

and other (e.g., employment and medical) services.

OTA identified several specific electronic delivery initiatives that warrant intensified SSA

attention: 1 ) full-scale pilot testing of integrated

electronic records and automated disability determination; 2) multiprogram electronic benefits

transfer (using magnetic stripe, smart, and hybrid

card technology); 3) electronic interagency eligibility determination; 4) electronic bulletin boards

and computer networks; and 5) “one-stop shopping” for electronic services.

SSA has intensively pursued and implemented

the use of toll-free 800 telephone numbers for service delivery, electronic data interchange for filing of earnings reports by businesses, and direct

electronic deposit of benefit payments. SSA

eventually intends to fully test integrated electronic records and automated disability determination, but needs a more aggressive, innovative pilot

test strategy—including abetter developed evaluation component. SSA tends to underfund true pilot tests in favor of what are really pre-operational

tests. SSA is underinvesting in exploratory, develi

35 - - -

t

30 - -

+

25 - - - -

1

20 - - - - -

15 - ‘ -

10+ - - -

/.”. A

-/

All U.S.

Households

/

-/-” -

- /

, 77 j

. . . . . . . . . . . . . . . . .

“/ 55+ -

------ -

1975 1980 1985 1990 1993 1995

—

SOURCE Sen{orNet, cited m Richard P Adler and Mary S Furlcmg,

“Electronic Dellvery of SoctalSecurty Serwces,” contractor paper prepared for the Off Ice of Technology Assessment, February 1994, p 12
Chapter 1 Summary and Policy Options 17

opmental pilot activities. SSA is participating in

electronic benefits transfer (EBT) and electronic

kiosk projects, but at minimal levels,48 and its

limited electronic bulletin board and computer

network projects do not as yet involve SSA recipients.

Again, SSA’s Agency Strategic Plan and followup tactical and implementation plans recognize many of the technical areas of opportunity

mentioned in OTA’s report Making Government

Work. However, electronic delivery oriented toward end users is given low priority and minimal

funding, and there is no ● ’mid-level” service delivery plan that links high-level strategic goals and

directions with specific “low-level” tactical pilot

tests and implementation plans.

SSA has argued that the full, on-schedule deployment of IWS/LAN technology is imperative

to: 1 ) provide an infrastructure that will stimulate

and support electronic delivery and reengineering

initiatives; 2) avoid problems and expenditures

that will result from breakdowns of the existing

dumb terminals;49 and 3) minimize the delays that

inevitably accompany large-scale federal information technology procurements. GAO and

others contend that deploying the IWS/LAN

technology before electronic delivery and reengineering opportunities are understood means that

the technology will be underutilized, perhaps mislocated, and possibly even obsolete before full implementation.

GAO believes that SSA has not adequately justified either the total number of terminals or their

deployment. GAO also notes that judicious use of

the many dumb terminals with useful life remaining could allow for a more flexible IWS/LAN deployment than proposed. GAO is concerned that,

in the absence of service delivery plans and goals,

IWS/LAN technology could be deployed in offices that might be reorganized. The technology

might then need to be reconfigured or physically

moved, depending on the results of ongoing reengineering and service delivery planning efforts.

This could, in turn, result in inefficient or wasteful

use of funds spent on equipment, site preparation,

wiring, and furniture.

In balancing these considerations, OTA believes that resources could be reprioritized and

reallocated to significantly increase—not decrease—the chances that the IWS/LAN technology program will succeed. IWS/LAN is a logical

successor to the dumb terminals and is arguably a

key part of SSA’s future infrastructure. But SSA

has not persuasively documented the urgency or

need for the full complement of microcomputers

(13,000 already procured or in the pipeline;

41,000 in a phase 1 buy with FY 1994 funds;

another 41,000 in a phase 2 buy with FY 1995-98

funds). OTA concludes that SSA’s current IWS/

LAN automation investment program can be improved. A range of modifications warrant serious

consideration (see later policy discussion).

Methodology for Measuring and

Tracking Results of IWS/LAN

GAO concluded that SSA had not developed a

framework for tracking the costs and benefits of

automation—including IWS/LAN—and for

comparing the impacts of automation against specific performance goals. As a consequence, GAO

said, establishing accountability of SSA’s automation program will be difficult or impossible.

GAO noted that other agencies, such as the Inter-

& Sce ft)r ~xanlp[e, S(Kia] Security Administration, “Visual Communications Plan,” April 1993, for discussion of kiosk projects. See generally, S(wial Secutity Administrati(m, 1993, op. cit., footnote 6.

49 A~~unllng a 5-year Ilfe for the dunlb teminals, SSA es~lma[es that, in FY ] 995, 26 percent of the dunlb terminals will be ~ years be> (md . .

expected Ilfe, 34 ~rcent will be 2 years beyond, and 9 percent will be i year bey~md.
18 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

Left: The POMS compact disc

includes material that in paper form

would require an entire bookcase,

Right: SSA has placed its entire set

of regulations on one compact

optical disc, known as the “Program

Operations Manual System” or

POMS disc, that is accessible via

personal computer,
Chapter 1 Summary and Policy Options 19

nal Revenue Service, are implementing specific

accountability programs to measure the costs and

benefits associated with major automation initiatives. 50

OTA’s review suggests that SSA’s limited ability to estimate the costs, benefits, and performance impacts of IWS/LAN is primarily due not

to the lack of methodology for assessing such impacts, but to deficient use of existing methodology

and to inadequate planning for service delivery.

SSA has a comprehensive planning and budgeting

system that requires a cost-benefit analysis for all

tactical plan initiatives where implementation is

proposed (and updated cost-benefit analyses for

ongoing projects if benefits or costs change sign ificantly). 51 SSA does not require a cost-benefit

analysis for demonstrations, prototypes, and studies. SSA issued comprehensive cost-benefit analysis instructions in November 1993.52 SSA requires that all tactical plan initiatives include: 1 ) a

schedule of deliverables; 2) an analysis of the anticipated impact on SSA work processes; and 3) a

description, quantified where possible, of likely

effects on the service delivery goals and objectives stated in the Agency Strategic Plan. SSA has

identified 7 broad goals and 64 more specific objectives for improving service delivery that flow

from the strategic plan:53

1. issue Social Security numbers properly

jectives);

2. maintain earnings records properly (6

tives);

3. pay benefits correctly (12 objectives);

4. pay benefits when due (13 objectives);

(4 obobjec -

5.

6.

7.

provide prompt, courteous service (16 objectives);

inform the public of its rights and responsibilities (8 objectives); and

ensure integrity of payments and records (5 objectives).

Even with an acceptable method, SSA has difficulty developing meaningful cost, benefit, and

performance impacts of infrastructure technologies like IWS/LAN because these technologies

work in concert with other technologies (along

with current, modified, or even reengineered work

processes) to affect service delivery. A service delivery plan would seem to be essential as part of

the framework for understanding and estimating

the impacts of IWS/LAN. Even if the Agency

Strategic Plan and the individual tactical plans

continued to be substantially valid, a service delivery plan might well suggest significant changes

in priority and funding for testing and implementing the tactical plans—based on new cost, benefit,

and performance estimates.

For all these reasons, SSA did not, and perhaps

could not, conduct a full cost-benefit analysis of

IWS/LAN. SSA based its analysis on comparisons of the time required to perform certain functions before and after IWS/LAN installation in 10

pilot-test offices. SSA extrapolated results from a

few hundred terminals at the 10 test offices to a

projected 41,000 terminals at more than 1,300

SSA offices. SSA estimated a cost-benefit ratio of

2.5 to 1 (benefits to costs), suggesting that IWS/

LAN is a cost-effective replacement for the dumb

terminals. 54 The SSA results have limited appli50 Frmk Rcllly, GAO, letter, op. cit., footnote 17, Mw. 30, 1993.

s I social Security Adnlinistration, “Planning & Budgeting System: Schedule and lnstructi(ms for Fiscal Year 1996 Cycle,” J,anuary 1994.

52 !+wial Security Administration, “Agency-Level Comprehensive Cost Benefit Analysis Instructions,” N(}vember 1993.

$3 S(wlal Securl[y Adn}inis[ratjon, “Agency Strategic plan>” op. cit., fmmmtc 13, pp. 51 -55; !Xwial Security Administra[i(m, “office of

Tcchm)h)gy Assessment Orientation Briefing Materials,” Aug. 10, 199.3.

~J S(xla] Security Administration, “Report to the Senate Appropriations Committee on the 1 W!NLAN prx~ject,” Apr. 5, 1993. Note. ht)wtwer,

that SSA reduced the 1 W.YLAN cost by the am(wnts needed to purchase erg(m(~mic furniture ([hat would be needed anywa}, SSA argues) and to

replace and operate dumb terminals (if I WS/LANs were not installed). Without the erg(m(m~ic fumlture {) ffset, the cost-benefit ra(io w OUICI have

been 2 to 1; and without both offsets, the cost-benefit ratio would have been I to 1.
20 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

cability for understanding major opportunities to

improve service delivery because:

1.

2.

3.

4.

SSA assumed no significant changes in work

processes;

most of the projected work-year savings were

marginal in nature—more than half due to SSA

employees not having to walk from their desks

or wait in line to use a shared personal computer;

the personal computers in the pilot offices were

used primarily in terminal emulation mode—-

meaning most functions were dependent on the

mainframe computers as they are with dumb

terminals; and

SSA assumed no significant additional requirements for training and staffing due to IWS/

LAN (SSA proposes to monitor and maintain

the IWS/LAN networks from the National

Computer Center in Baltimore, MD).

OTA believes that IWS/LAN, if properly

deployed, could contribute to major improvements in service delivery. But SSA’s currently

available cost-benefit analysis provides little help

in determining the optimal IWS/LAN deployment strategy or in understanding the potential of

IWS/LAN to improve service delivery or reinvent

SSA work processes. The absence of a service delivery plan also impairs SSA’s ability to develop

cost estimates of long-term automation, beyond

IWS/LAN. GAO estimated total costs in the

$5-billion to $ 10-billion range over a 5- to 7-year

period. 55 SSA disputes these estimates, noting

that they include significant costs for normal upgrades of mainframe computers and other technologies that would be needed regardless of the

modernization and service delivery strategies ulti -

mately adopted. SSA is developing its own estimates (not provided to OTA). But whatever the

numbers, GAO’s point is that the $1.125 billion is

not a total cost for SSA modernization. Also, OTA

believes that the $3 13-million reengineering component 56 of the $1.125 billion is simply a placeholder, and cannot be credibly detailed until

completion of reengineering and service delivery

plans.

Another GAO concern is tying actual performance of IWS/LAN (and other information

technologies) to projected service delivery improvements. GAO would like to see greater accountability for results. An SSA contractor is currently developing a methodology for improving

accountability y of automation projects .57 The contractor is reviewing methodologies used by other

agencies such as the Internal Revenue Service.

Implementation of an accountability methodology will depend, however, on establishing realistic

and specific performance improvement objectives

and on credibly linking these objectives to modernization activities—again, difficult to do in the

absence of reengineering and service delivery

plans.58

Relationship of IWS/LAN to the

State Disability Determination Process

GAO concluded that SSA has not considered a

range of alternatives on how automation could improve the disability determination process, in

which states have major responsibilities. GAO

noted that SSA appears to be imposing its technical solution on the states without adequate consideration of the needs of states or the implications

for their role in delivering SSA programs.

55 SW u s congre~~, Genera] Accounting Office, Op. cl[., f~x)tnole 2. An SSA contractor estimated costs in the $5-billion tO $10-billion . .

range over a 12-year period, but SSA does not have confidence in this work. See George M. Kolenaty and Charles F. Swett, Birch & Davis

Associates, Inc., “Preliminary Cost Estimates for the Social Security Agency’s Agency Strategic Plan,” c(mtractor paper prepared for the Social

Security Administration, July 22, 1991.

S6 &crea5ed t. $237 nll]]ion in SSA’S revised budget estimates

57 see Brown & co., *.Meth(~oh)gy Out]lne: ssA s[~tegic planning Initiative—Project Tracking and Accountability,” contractor ProJect

conducted for SSA, Nov. 2, 1993, draft.

58 Also see us. con~ess, Genera] Accounting OffiCe, op. cit., f(x)tnote 2
Chapter 1 Summary and Policy Options 21

The initial and continuing determination of eligibility for disability benefits is acknowledged as

the most troubled SSA service. At present, applicants apply for disability at their local SSA field

office, which forwards the paperwork to the nearest state Disability Determination Service (DDS)

office. State DDS offices do the actual evaluation,

obtain necessary medical evidence and examinations, make the initial decisions on eligibility, and

conduct continuing reviews of eligibility. State

DDS decisions may be appealed to SSA’s Office

of Hearings and Appeals for consideration by an

administrative law judge. SSA’s federal DDS office provides backup to the states as needed, and

serves as a model office to test new technologies

and work processes.

State DDS offices are fully funded by SSA, but

staff are state, rather than federal, employees and

operate pursuant to numerous state, as well as federal, regulations and procedures. The SSA’s IWS/

LAN technology program includes modernization of the state DDS offices, whether as part of the

Modernized Disability System or alternative approaches developed by SSA’s disability reengineering task force. Experts differ on the role of

technology in improving disability processing.

SSA’s disability reengineering task force is studying how to best leverage the IWS/LAN and other

information technologies.

SSA has funded the modernization of about

one-fourth of the state DDS terminals from the FY

1992-93 budget—about 4,000 terminals and

about 70 LANs principally in eight states (Alabama, Alaska, California, Illinois, Michigan, Oregon, Pennsylvania, and Virginia).59 Although

procured separately from the formal IWS/LAN

program, the terminals are consistent with the

IWS/LAN concept but may vary slightly in terms

of technical specifications and configuration, depending on the state. The remaining 12,000 terminals and 155 LANs for state DDS offices are included in the SSA’s IWS/LAN technology

program.60 SSA is proposing to accelerate state

DDS modernization by providing additional

funds from the SSA’s $1.1-billion annual budget

for state DDS operations.61

OTA’s review, based in part on input from the

National Council of Disability Determination Directors and selected state DDS and information

management officials, indicates strong overall

support among the states for modernization of

state DDS offices, but considerable concern about

federal-state relationships.62 One major concern

centers around SSA’s perceived inflexibility in attempting to impose its IWS/LAN technical solution on state DDS offices. States vary widely in

their level and type of automation. State DDS officials would like to see a more flexible-and perhaps a more functional, rather than hardware/software-specific-modernization approach that can

more easily accommodate individual state information technology plans and procurement procedures. Some state officials feel SSA is acting as

if the state DDS offices were federal, rather than

state, offices. Another concern is perceived redundancy and inconsistency in the SSA approval

process where multiple signoffs are required and

one branch or level of SSA may contradict another. A further concern is SSA’s inadequate attention

to initial and continuing training and maintenance

requirements for IWS/LANs installed in state

DDS offices.

59 S(xia] s~~urity AdnlinistratiOn, “DDS System Life Cycle to IWS/LAN—Status of the FY93 Funding Cycle,” Dec. 2, 1993.

a Ibid.

b] This effon CouId focus on the I o states that collectively acc(mnt for over half of the total DDS wi)rkl(~ad<alift~mia, New y(~rk Texas,

Florida, Illinois, Ohio, Michigan, Pennsylvania, Georgia, and Louisiana. Also see S(}cial Security Adnunistrati(m, “Draft SSA M(demized Disability System lrnplementati(m Plan and Coordination with IWS ‘LAN lnstallati(m,” Oct. 19, 1993.

62 see ~tatement of Stan Kress on &ha] f of the Nati(~na] Council of Disabi] ity Delerminati(m Directors before a hearing ‘)f the ‘{)use con’-

mittee on Ways and Means, Subc(nmnittee on Social Security, Oct. 28, 1993. Also see Charles Jtmes, President, Nati(mal C(mncil of Disability

Determinati(m Directors, letter tt~ OTA, Jan. 13, 1994.
22 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

SSA is participating in the development and pilot testing of

electronic kiosks for delivering selected services Early

prototypes are limited to dissemination of basic informatlon,

later applications may include transactional services,

Some tension and disagreements between state

and SSA officials are inevitable whenever a federal] y funded and monitored state procurement is involved. SSA is trying to assure itself that state

DDS offices are pursuing cost-effective, compatible, and technically sound modernization. SSA is

showing some flexibility regarding both technical

solutions and procurement procedures, but is insisting, understandably, that state DDS proposals

be cost competitive and interoperable with the

evolving SSA-wide IWS/LAN system. Continuing differences in federal and state perspectives

suggest that a joint SSA-state review is in order to

attempt to further streamline the process and to

make best use of available funds.

A joint SSA-state review team might also reconsider SSA’s priorities for IWS/LAN installation in state DDS offices. The logic of the current

deployment plan is not convincing. SSA needs to

determine, in collaboration with the states, what

deployment plan will be most highly leveraged in

improving disability processing as soon as possible and will be compatible with the Modernized

Disability System (MDS) or reengineered disability process when implemented. A joint SSA-state

team could review SSA’s disability reengineering

report (when available) regarding implications for

IWS/LAN deployment. SSA also needs to assess

relative priorities between state DDS office modernization and IWS/LAN installation at SSA offices. A further acceleration of state deployment

might make a significant difference (SSA appears

to be moving in this direction).

MDS also highlights what OTA believes to be

confusion at SSA over the distinction between pilot testing and pre-operational testing. SSA’s current schedule calls for the first full state MDS pilot

test to begin in June 1995 in Northern Virginia and

expand to the rest of Virginia in January 1996; pilot testing would be expanded to four other states

in July 1996. These pilot tests are actually part of

MDS implementation, and are more accurately

described as pre-operational, not pilot, tests. One

reason for the delay is to allow time for development of the software to run MDS on an operational

basis. A true pilot test would, for example, attempt

to model the desired MDS functionality in one or a

few locations using software/database adaptations and simulations. SSA would benefit from

true pilot tests in MDS and other areas of SSA

modernization and electronic service delivery.

Some state DDS officials expressed concern

that SSA did not seem sufficiently aware of broader state plans and initiatives for electronic service

delivery, such as electronic kiosks, electronic

benefits transfer, electronic bulletin boards, and

computer networks. SSA’s current electronic delivery program gives minimal attention to related

state activities. As a consequence, opportunities

for synergy and partnering between MDS and other electronic delivery initiatives may be missed.
— . —. —— . . . . . .

Chapter 1 Summary and Policy Options 23

POLICY OPTIONS FOR IMPLEMENTING

THE IWS/LAN TECHNOLOGY PROGRAM

The policy options relevant to this OTA review involve the timing, levels. allocations, and conditions of funding for SSA’s current automation program and, perhaps, for limited aspects of SSA’s

general management and operations. The FY

1994 House Committee on Appropriations report

language already requires SSA to respond to any

OTA and GAO concerns and report back to the

House Committee on Appropriations at least 30

days before obligation of FY 1994 automation

funds ($300 million).63 If it wished, Congress

could ask that SSA meet additional conditions before obligation of the FY 1994 appropriation.

Congress could reflect priorities for reengineering

and service delivery planning and implementation

in language that accompanies the appropriations

for FY 1995 (and subsequent years).

This OTA review is limited to consideration of

SSA’s automation investment fund, specifically

the IWS/LAN program, and does not include a

broad-scale consideration of SSA’s overall information technology programs, the financial

health of various SSA trust funds, or proposals for

major regulatory or institutional change (e.g.,

converting SSA to an independent agency or statutory revisions to SSA’s charter). OTA notes that

frequent changes in SSA’s top management make

coherent and sustained planning difficult.

Options for Obligation of

Fiscal Year 1994 Appropriation

Defer the IWS/LAN Procurement

Congress could request SSA to holdup the IWS/

LAN procurement process until much later in FY

1994 or indefinitely (or, theoretically, could ask

SSA to reprogram these funds for other purposes). 64

A lengthy deferral or reprogramming would

seem reasonable only if the IWS/LAN technical

solution was seriously flawed and/or the SSA organizational structure was so uncertain that no

prudent procurements could be made. OTA believes that neither of these conditions applies.

A lengthy deferral could, on the other hand,

compromise an orderly procurement process,

delay the realization of benefits of IWS/LAN

technology, slow the SSA modernization initiative, and possibly incur some additional costs for

interim replacement of dumb terminals.

Proceed as Planned With the

IWS/LAN Procurement

Congress could allow SSA to proceed with the

IWS/LAN procurement as planned. This option

would apply if Congress judges that the IWS/

LAN technical solution and deployment plan are

sound, and that the SSA reengineering/service delivery planning is well balanced and unlikely to

result in changes that might significantly affect

the IWS/LAN procurement.

OTA concludes that, while the IWS/LAN technical solution is sound, some adjustments in procurement and deployment plans are likely to be

needed. OTA also concludes that the service delivery planning needs to be strengthened, and that results of the disability reengineering project

(scheduled to be available March 31, 1994) could

affect the IWS/LAN procurement.

Proceeding as planned without further conditions or modifications presumably would expedite the procurement process and obligation of FY

1994 funds, and perhaps somewhat accelerate the

realization of IWS/LAN benefits. On the other

63 ~1$ is ;l so-called .no. )clir’” ~ipproprlatlon,”nleaning that SSA need not obligate the funds in FY 1994. me Senate apprt)priallOnS r~~~fl

IIkcw ise requires SSA t{) reptwt back tt) the Senate Committee (m Appr(~priations on I WS ‘LAN concerns at least 30 days I_wf(m (~bl iga[itm of FY

1994 autorna(ion funds, Scc (J. S. C(mgrcss, H(nrsc Comrnittec (m Appropriati(ms, op. cit., f(x)tni~te 18; U.S. C(mgrms, Senate Cormnittec on

Appr(~priati(ms, Senate Rep(wt 103-143, op. cit., f(mtm)te 19.

~~ SSA ~x~c[s t. actu:illy (Jbllga[c the F’y’ 1994 IWS, LAN funds in FY 199S, since (Jbllgati(m occurs not when the r~qUcst for pr(~p)sals is

issued, but when a c(mtract IS awarded.
24 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

hand, this approach would increase the likelihood

of a mismatch between the IWS/LAN procurement and reengineering or service delivery priorities, and could result in less than optimal use of FY

1994 funds.

SSA could proceed as planned and issue the request for proposals on IWS/LAN, with the understanding that the final IWS/LAN procurement

package and later deployment would be modified,

to the extent needed, based on reengineering and

service delivery planning results. The concern is

that SSA has not satisfactorily responded to prior

GAO and congressional committee requests for

service delivery plans and more comprehensive

IWS/LAN justifications. SSA’s credibility on this

score is low.

Proceed With a Modified

IWS/LAN Procurement

Congress could request that SSA proceed with a

modified IWS/LAN procurement, incorporating

the results of interim reengineering and service

delivery planning, this OTA review, and GAO’s

continuing evaluation. SSA could both reprogram

funds (e.g., from IWS/LAN and ergonomic furniture to reengineering) and prioritize funds within

current allocations (e.g., on locations for IWS/

LAN installation).

OTA believes that proceeding with prudent

modifications to the IWS/LAN procurement need

not significantly slow the procurement process or

the realization of IWS/LAN benefits. OTA also

believes that this option could improve the planning process for reengineering and service delivery. It could also help assure that IWS/LAN

technology procurement is optimized and that

greater benefits accrue from IWS/LAN than might

otherwise be realized.

OTA concludes that SSA would achieve the

best results through a combination of modifications including reprogramming and prioritizing of

allocated funds. SSA could reprogram a percentage of IWS/LAN (and related ergonomic furniture/site preparation) funds to reengineering and

implementation of the Agency Strategic Plan—

including service delivery planning and testing.

Even 5 percent ($ 15 million) would go a long way

toward providing a better balance within the overall SSA automation initiative. (Note: SSA also

could reprogram a fractional percentage of its operating budget to free up funds for service delivery

initiatives.)

Possible uses for reprogrammed funds include:

additional staffing and support for the activities

of the reengineering and service delivery

teams;

implementation of the electronic delivery success factors identified by OTA (e.g., grassroots

involvement and community infrastructure development);

3. design and implementation of a new or modi4<

5.

6.

fied series of pilot tests (e.g., integrated electronic records, automated disability processing, electronic benefits transfer, and computer

network services), including testing of ideas

emerging from reengineering studies;

design and implementation of service delivery

performance tests;

intensified participation in government-wide

electronic delivery pilots and projects; and

review and streamlining of state disability automation support.

SSA also could prioritize the FY 1994 IWS/

LAN procurement to cover offices and locations

that offer the greatest near-term leverage for service improvement, and are most likely to remain

stable under a range of reengineering and reorganization scenarios. SSA could, for example, further accelerate the IWS/LAN procurement for

some state DDS offices; this, in turn, might affect

technical specifications, especially if SSA were to

offer more flexibility in meeting state needs. Also,

SSA would need to be assured that state requirements for IWS/LAN are consistent with, or at least

would not markedly change as a result of, the disability reengineering project.

Early milestones that would increase OTA’s

confidence in SSA’s ability to fully utilize the

IWS/LAN technology and significantly improve

service delivery include the SSA: satisfactorily

completing the disability reengineering project
Chapter 1 Summary and Policy Options 25

~seniorNetonline

.

Social Security Online

Information from the

Social Security Administration

* ~~

B Announcements SSA Documents

~ What’s New

Library and files

~ Description of SSA Programs

b Frequently Asked Questions ; IM#lti

~ How to Contact SSA SSA Talk

Q Forum to SSA

~

SOURCE Richard P Adler and Mary S Furlong, “Electronic Delweryof Soc{al Security Services, ” contractor paper prepared for the Off Ice of Technology Assessment, February 1994, p 19

(draft report due March 31, 1994); strengthening

its service delivery planning process; improving

the balance and increasing the funding for SSA’s

portfolio of electronic delivery projects (see figures 1-3 and 1-4); and initiating an SSA-state review of the disability modernization program.

Options for FY 1995 Appropriation

Provide Zero Funding for IWS/LAN in FY 1995

Congress could defer appropriation of further

funds for the IWS/LAN program. Zero funding

for IWS/LAN in FY 1995 would logically apply if

the IWS/LAN technical solution was highly uncertain, and SSA’s progress on reengineering and

service delivery planning was judged unsatisfactory. Assuming funds were otherwise available,

zero funding would signal low confidence in

SSA’s modernization initiative.

Zero funding for FY 1995 would allow SSA

more time to develop reengineering and service

delivery plans. It would, however, significantly

delay IWS/LAN procurement and installation,

and any benefits that might result, and would run

the risk of seriously disrupting SSA’s modernization.

OTA is modestly optimistic that SSA’s planning efforts for reengineering and service delivery

will bear fruit, especially if revised and strengthened in accordance with the results of this OTA review.

Provide Requested FY 1995 Funding

With No Strings Attached

Congress could appropriate only the $100 million

originally requested for FY 1995 or the $130 million SSA intends to request (to make up for the

$30 million shortfall in the FY 1994 appropriation) without any conditions or modifications.

This option would apply if Congress concludes

that the IWS/LAN technical solution is sound,

SSA’s reengineering/service delivery planning is

proceeding satisfactorily, and the requested FY

1995 funding level is adequate.
26 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

iiZTF

+’— — a::Transactions

Status of acct.

Change of

address

- Guide to

the Center

SOURCE Richard P Adler and Mary S Furlong, “Electronic Delivery of

Social Security Serwces,” contractor paper prepared for the Off Ice of

Technology Assessment, February 1994, p 22

This option would allow SSA to continue with

the IWS/LAN procurement, but would require

SSA to go through separate appropriations requests and justifications for subsequent fiscal

years. This would permit additional congressional

oversight and opportunities for guidance, but

would somewhat complicate SSA’s planning and

increase the level of uncertainty. OTA believes

that SSA maybe able to justify the $100 million or

$130 million for FY 1995, contingent on continuing improvements in SSA's service delivery planning, among other areas. Just as OTA’s review

suggests the need for modifications to SSA’s

planned use of FY 1994 funds, some combination

of conditions and modifications for FY 1995

funding should be helpful.

Provide FY 1995 or 1995-96 Funding

With Strings Attached

Congress could appropriate funds with conditions

and modifications. This option could include appropriation of funding levels covering 1 or 2 additional years of the SSA budget plan, reprogramming of funds (e.g., from IWS/LAN and

ergonomic furniture to reengineering and electronic service delivery), prioritizing within current planned allocations (e.g., on locations for

IWS/LAN installation), and establishing benchmarks for SSA progress on reengineering and service delivery improvement.

Appropriating FY 1995 (and perhaps FY 1996)

funds with conditions and modifications would

allow SSA to continue generally on schedule, but

with added incentives to assure best use of available monies. This option should help keep the

SSA program on track, while permitting more effective congressional oversight and holding SSA

more accountable for performance. Benchmarks

or milestones could be established as a basis for

determining appropriations in subsequent years.

Possible conditions and modifications for

SSA’s obligation of FY 1995 and FY 1996 appropriations include:

FY 1995

continued commitment to staff and resources

for service delivery planning;

completion of service delivery plan that addresses the findings of OTA’s Making Government Work65 (including success factors for

electronic delivery) and GAO’s general management review of SSA;66

startup of intensified electronic delivery pilot

projects that include opportunities identified

by OTA;

accelerated completion of full-scale pilot testing (as distinguished from pre-operational testing) of IWS/LAN, MDS, and disability reengineering;

completion of federal-state review of disability

automation strategy and priorities;

completion and initial pilot testing of performance measurement methodology;

65 u s Congress, office of Technology Assessment, op. ~lt., fm)tnote 15.

. .

66 us, congress, &n~ra] Accounting Office, ~~p. cit., f(~)tnote 2.
Chapter 1 Summary and Policy Options 27

● intensified commitment to grassroots involvement and community infrastructure

ment for SSA service delivery; and

- initiation of followup reengineering

other (nondisability) service areas.

developstudy of

m

●

●

●

■

■

FY 1996

achievement of specified service delivery improvements based on use of IWS/LAN and other information technologies;

implementation of reengineered disability

process in selected states;

implementation of selected electronic delivery

improvements;

completion of second-generation plans for service delivery and reengineering;

continued commitment to grassroots involvement and community infrastructure development; and

continued electronic delivery pilot-testing with

emphasis on strategic partnering opportunities.

Congress could appropriate only the FY 1995

funds ($100 million or $130 million), but make

clear that a strong SSA performance in meeting

FY 1995 conditions would favorably influence

consideration of a multiyear appropriation in FY

1996 (e.g., for FY 1996-98). Or Congress could

make a 2-year appropriation in FY 1995 (for FY

1995-96), but make obligation of the FY 1996

portion ($285 million or $255 million) contingent

on satisfactory compliance with conditions placed

on fiscal year 1996 as well as FY 1995 funding.

OTA’s estimation of the merits of a 2-year versus

l-year appropriation depends significantly on

SSA’s ability to meet early milestones for use of

the FY 1994 appropriation (see prior discussion).

Appropriations beyond FY 1996 would not appear to be prudent at this time (the FY 1995 budget

cycle), in OTA’s judgment, given the lack of clarity and documentation for use of the out-year

funds.

Provide Full Multiyear Funding

Congress could appropriate $825 million ($1. 125

billion less $300 million already appropriated for

FY 1994) in no-year funds (i.e., funds that could

be used at SSA’s discretion during FY 1995-98).

This option would warrant consideration if the

IWS/LAN technical solution is sound, confidence

in SSA’s reengineering and service delivery is

very high, and funds permit appropriating the rest

of the 5-year request in no-year money.

This option would give SSA maximum flexibility in allocation and obligation of funds, send a

strong signal of support for SSA’s modernization,

and eliminate the need for annual appropriations

justifications and the uncertainties of future funding actions. Full multiyear funding, especially

with no strings attached (and probably even with

conditions), would exceed OTA’s level of confidence, and would make it more difficult for Congress to set direction or priorities and encourage

improvements that OTA believes are needed.

Also, SSA has not adequately documented its

need for the out-year IWS/LAN procurements.

And about one-third of the FY 1996-98 funds is

for out-year activities related to reengineering and

implementation of the strategic plan that are not,

and cannot be, credibly specified at this time.

Attach Conditions to SSA Operating Funds

Congress could appropriate SSA operating funds

with conditions and modifications relevant to reengineering and service delivery. The 5-year,

$1 .125 -billion SSA automation investment program is separate and apart from the annual SSA

operating budget that totals about $5 billion (of

which about $250 million funds SSA’s annual information technology budget67). Funds could be

reprogrammed or prioritized within SSA’s operating budget to cover reengineering/service delivery priorities, and/or to strengthen SSA’s strategic

67 SSA15 ~rsonne] COSIS ass(~ia[ed with infom]ati(m technology” total approximately another $150 nlillion.
28 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

management that could be a key to successful reengineering.

This option could permit full funding of IWS/

LAN in FY 1995, for example, with additional reengineering/service delivery funding provided or

supplemented from operating budgets. Ultimately, the reengineered SSA service delivery, when

fully operational, presumably will be funded in

large part from the operating budget. The operating budget could be tapped sooner and more

aggressive y to fund reengineering and service delivery priorities, which would complement or substitute for funds included in the current automation investment plan.

This option also could provide a greater incentive to SSA to strengthen its strategic management team. This would improve the integration of

agency planning for service delivery, information

systems, human resources, and facilities across al1

SSA operational components. OTA’s review (as

did GAO’S

68) concluded that a strengthened strategic management team is necessary and probably

essential to assure that SSA meets whatever

conditions Congress may place on annual appropriations.

68 U.S. General Acamnting office, op. Cit., fW)tnote 2.
The

Challenges of

SSA’s

Growing

Workload 2

T

he Social Security Administration, in many respects, is

the nation largest government service agency. More than

45 million people receive almost $350 billion each year in

SSA benefit payments. 1 This represents 24 percent of all

federal expenditures and over 6 percent of the gross domestic

product. SSA is a key component of the Department of Health and

Human Services (HHS) and accounts for more than half of the department’s staff and 56 percent of its budget. As the U.S. population grows and its average age increases, SSA projects that its

workload will continue to grow.

Information technology is one of the primary tools SSA has

used to ensure that it continues to provide its legislatively mandated services to its customers. Because of growing workloads

and declining staff levels, the agency believes that information

technology will play an even greater role in the future. To provide

a basis for evaluating SSA’s information technology planning,

this chapter describes its programs and the challenges it faces.

SOCIAL SECURITY ADMINISTRATION PROGRAMS

The Social Security Administration administers several important programs that currently provide benefits to more than one in

seven Americans. The three main programs are the Old Age and

Survivors Insurance (OASI) Program, the Disability Insurance

(DI) Program, and the Supplemental Security Income (SSI) Program. A beneficiary may receive benefits from more than one program—for example, a disabled worker may be eligible for both

I S(xlal Security Administration, “Folder I: Intrfxiucti(m and Overview of SSA,”

1993, p. 2.

2 9
30 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

the Disability Insurance and Supplemental Security Income Programs.

E Old Age and Survivors Insurance

The retirement insurance program is the largest

SSA program. Old Age and Survivors Insurance

is a national program of contributory social insurance under which employees and employers pay

contributions into a trust fund. OASI then pays

monthly benefits when the worker retires: each

year, about 3 million newly retired workers apply

for benefits. In 1993, SSA paid approximately

$270 billion in benefits to 36.7 million individuals.2 More than 90 percent of all Americans over

the age of 65 receive Social Security benefits.3

Computers in the National Computer Center at

SSA headquarters in Baltimore, MD, play an important role in administering the OASI program.

Using modern storage technologies, SSA maintains earnings records for 125 million workers.4

Because monthly retirement benefits are determined by the amount of an individual contributions to the trust fund, the agency is required to

keep track of each worker’s earnings history. Every year, SSA processes about 220 million wage

reports from employers detailing workers’ contributions.5 In the past, these reports were received on paper, but now the majority are received

in electronic form.

Workers who have reached the age of 62 are eligible to receive retirement benefits. Claims for

benefits are filed atone of the agency’s 1,300 field

offices located throughout the United States, or

via the agency’s toll-free 800 telephone number.

Often, applicants call the 800 number to make an

appointment for an interview either at a field office or by telephone. SSA employees call up the

applicant’s earnings history by using computer

terminals connected to the main computers in Baltimore. This information is then used to compute

the monthly benefit. Computer support for most

aspects of the retirement program allows SSA to

process claims in an average of 15.5 days.6

I Disability Insurance

The Disability Insurance Program pays monthly

benefits to disabled workers and their dependents.

DI, like OASI, is mandated under Title II of the

Social Security Act, and is also funded by a trust

fund. As of December 1992, the disabled represented 11 percent of the total combined (OASI and

DI) Title H benefit program beneficiaries. The

1993 projected budget outlay for DI was $34.3 billion serving 5.1 million individuals.7

The determination of eligibility for disability

benefits is considerably more difficult than the determination of eligibility for retirement benefits.

The law requires that SSA determine whether an

individual has a medical impairment expected to

last at least 1 year that prevents the individual

from not only doing his or her usual work, but also

from doing any form of work that exists in significant numbers in the economy given his or her age,

education, and work experience. Complex rules

and procedures have evolved in order to implement these criteria. There is often significant disagreement with decisions made on disability

claims, given that the determination of how disabling a medical condition may be is inherently a

judgment decision.

The disability program is also complicated by

the fact that responsibility for it is shared between

the federal government and the states. As with retirement insurance, the claims are taken by SSA

field offices. Evaluations of the severity of the applicant’s disability, however, are made by state

21bid.

31bid, p. 3.

@(xlal Securi[y Administration, ‘“Folder 5: Primary Service Delivery/Public Contact,” 1993, p. 2.

‘Ibid.

~S(xlal Security Administration, op. cit., footnote 1, p. ~.

‘I bid., p. 5.
Chapter 2 The Challenges of SSA’s Growing Workload 31

government Disability Determination Services

(DDS), The applicant’s file is mailed from the

SSA field office to the state DDS office, which

then gathers medical evidence from the applicant “s physician and other sources, makes a determination, and mails the file back to SSA to determine the monthly benefit. Many believe that the

number of handoffs and stages in the process is a

source of inefficiency.

I Supplemental Security Income

The third major program operated by SSA is the

Supplemental Security Income Program (Title

XVI of the Social Security Act). It is designed to

provide a minimum level of income for the aged,

blind, and disabled. The projected SSI outlays for

1993 were $23.4 billion serving 5.5 million individuals.8 SSI differs from the retirement and disability insurance programs in that it is funded out

of general federal revenue, not a trust fund. It is a

means-tested program; eligibility does not depend

on prior contributions to a trust fund, but on the

applicant’s income and assets. As a result, it is

possible for disabled children to receive SSI benefits; the number of new claims for children’s benefits has grown rapidly since 1990.

Administering SSI is more costly and complex

than the Title 11 programs because SSA must monitor income, resources, living arrangements, and,

in cases where a disability is involved, medical

conditions. To receive the full amount, an individual must have no other countable income. Individuals with more than $2,000 in assets cannot qualify for SSI. The component of SSI related to

disability is difficult to administer for the same

reasons that apply to the DI program, as well as the

added challenges that are unique to SSI. Today, 72

percent of SSI recipients are disabled, further adding to the administrative burden.9

SERVICE DELlVERY CHALLENGES

The Social Security Administration is facing serious challenges because of a growing workload,

declining staff levels, and outdated work processes. Over the past several years, the agency’s

performance has improved in some areas, but in

many others the level of service experienced by

the agency’s customers has declined. In a recent

document outlining issues in service delivery, the

agency observed that “SSA does not deliver service as effectively as it once did and is unable to

respond to change as quickly as it should. ”]”

Among the problems that have been identified are

an inability to answer telephone calls and provide

service during periods of peak demand, a growing

disability backlog, difficulty responding to new

workloads, and uneven delivery of services to

some segments of the population that do not understand English.

I Growing Workloads and

Declining Staff Levels

In the late 1980s, the Social Security Administration suffered a rapid decline in staff as a result of

federal budget constraints. In 1984, SSA had almost 80,000 employees; today, the agency has

only 63,000 employees. At the same time, the

workload has been increasing. This is especially

acute in the area of disability, both DI and SSI,

which involves an especially complex and laborintensive process. From 1990 to 1993, the number

of disability claims increased 47 percent, from 1.7

million to 2.5 million.11 The reasons for this increase are unclear, but may reflect worsening eco-

‘! b]d., p. 6.

glbld., p. 8.

1‘JS(xlal security Administration, “improving Service Delivery at the Soaal Security Administrati(m A C(mceptual i%~p)sal,”’ Dec. 30.

1993. p. Il.

11 Ibid,, p. 6.
32 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

nomic conditions in the early 1990s, as well as

demographic changes and an aging population.

Today, the disability workload is consuming over

half the agency’s administrative resources, despite the fact that it represents only 10 percent of

the beneficiary population.

SSA believes that large investments in information technology in the late 1980s have

helped it to compensate for some of the decline in

staff. Beginning in 1987, SSA deployed 40,000

computer terminals to its field offices, allowing its

employees online access to earnings records. The

claims process for the retirement program was automated and the agency also encouraged electronic filing of wage reports and direct deposit of

benefits. However, there is clear evidence that the

quality of service delivery has declined in significant areas and that the agency has not been able to

accommodate the growing workload and staff

cuts.

Given the budget climate, SSA seems resigned

to little growth in staffing or even further cuts over

the remainder of the decade. This is recognized

in the Agency Strategic Plan: “Because we expect

Federal budget deficits to continue through the

mid- 1990s, our available administrative resources are likely to grow at a much slower rate

than increases in the volume of our work would

warrant.”] 4 As a result, SSA is looking to the increased use of computer technology to automate

as many tasks as possible. In 1991, the agency began planning the IWS/LAN (intelligent workstation/local area network) project to distribute

microcomputers throughout the organization. It

also began to develop software for the SSI and disability programs, which had little computer support. More recently, the agency has begun a more

comprehensive evaluation of its disability program to determine if there are inefficiencies that

can be avoided by redesigning the process.

1 Disability Backlogs

The growth in disability claims has caused a crisis. The new workload has imposed large administrative costs on SSA and has led to a rapid decrease

in the quality of service provided to applicants for

disability benefits. The average processing time

has increased from 87 days in 1990 to 128 days in

1993; SSA projects that the processing time may

reach 185 days in 1994. ] 5 By contrast, the Agency

Strategic Plan established a target of 60 days.16

The number of unadjudicated cases has now

reached 725,000,17 and is projected to grow to 1.3

million by September 1994.18 The situation varies

from state to state; in California and Ohio, for example, the processing time is 140 days, while in

North Carolina it is under 70 days.

One response to the growing workload has

been to severely curtail the use of continuing disability reviews (CDRs). By law,19 SSA is required

to periodically review whether recipients of disability benefits continue to be entitled to benefits.

However, because of the growth in the number of

new claims, the agency has been forced to divert

resources from doing CDRs. As of the middle of

Itstxial security Adminis~atitJn, op. cit., footnote 1, Pp. IO-11.

I ~“[R]e]ying simp]y (m additional staff is no Ionger ~ optiOn.” Social Security Administration, op. cit., footno(e 10, p. iii.

] 4S(xial security Administration, Offlce of Stmtegic Plmning, “~~e S(xlal Security Stmtegic plan: A Framework for the Future,” SSA Pub.

No. 01-001, September 1991, p. 7.

1 Ss(wla] security Administration, 0p. Cit., f(x)tnote 1‘~ P. 6.

16s(wla] Security A&niniWatkm, Op. cit., f(Wllote 14, P. so.

I 7Lawrence H. ~omps{)n, ~incipal Deputy commissioner” for Smia] Security, persona] communication, Jan. 7, ] 994, p. ~.

18~panment of Health and Human Services, “Fiscal Year 1994, Justification of Estimates for Appropriations Committees,” in testim(my

of Stan Kress, President, National Council of Disability Determination Directors, before the House Subcommittee on Social Security, Committee (m Ways and Means, Oct. 28, 1993.

IgS{Kial security Disability Amendments, 1980.
—

Chapter 2 The Challenges of SSA’s Growing Workload 33

1993, SSA had over 1 million beneficiaries scheduled for reviews. In FY 1992, only 58,000 reviews

were conducted.20 There is concern that the inability to carry out CDRs is leading to benefits being paid to ineligible recipients. SSA’s Office of

the Actuary has estimated that there will be $1.4

billion less in the trust funds because of failure to

perform CDRs in the early 1990s.21

SSA believes that increasing its computer capabilities is one way to handle the disability backlog. Today, computer support for the disability

program is limited. Each state Disability Determination Service uses different hardware and software, and the links between the state and SSA systems are limited. One of the objectives of the

IWS/LAN initiative is to install computers

throughout SSA and the state DDS offices, providing a common system, and to develop a new

software package to handle the disability programs. An important component of the new system is that it will permit the electronic transfer of

records between the SSA field office and the state

DDS, eliminating the time that the file spends in

the mail.

While increased computer capability will have

some impact, it will not cut the backlog dramatically. A private contractor hired by SSA to determine the effects of automation on the disability

process found little correlation between the degree

of automation in a state DDS and performance

measures.

22 As the process is currently structured,

only one day of the several months needed to handle an initial disability insurance application is

spent in an actual processing activity that could be

affected by automation (see table 2-1). For this

reason, SSA has established a “reengineering”

task force to look at more substantial changes in

the disability claims process.

I Slow In-Person and Telephone Service

Each year, 56 million individuals reach SSA

through the toll-free telephone service, and 24

million use the field offices. The toll-free number

is often used for more routine business such as answering general inquiries or handling “postentitlement events” such as changes of address. The

field offices are used for more complex tasks or

tasks that require documents to be verified. However, the Agency Strategic Plan states that clients

should have a choice as to how they interact with

the agency;23 some clients prefer to use the field

offices.

Wait-times in the field offices have been getting

longer, especially in the busy urban offices that

were hit disproportionately by staff reductions in

the 1980s. The toll-free number, originally intended to take some of the load off the field offices, has been overwhelmed as well.24 During

peak days, the busy signal rate can be as high as 75

percent.

25 SSA prefers to look at the access rate--

the percentage of callers who try to reach the

agency and are able to get through on the same

day. On peak days, the access rate is about 67 percent. 26 Even among callers who get through, the

“hold” times can be significant. In FY 1991, SSA

z~Jane L, Ross Ass{~ia[e Director, Income security Issues, General Accounting office, testimony before the House Select Conlnliltee on

Aging, Mar. 9, 1993.

211bid.

22 Williams, Adley & C()., “Final Report to the Social Security Administration: Review and Analysis of Office Automatism Questitmnaire

for the State Disability Determination Services,” Washington, DC, June 30, 1993.

23 Social Security Administrati(m, op. cit., foomote 14, pp. 38-39.

24’T(x) many callers receive busy signals, especially at peak hours, and some people receive inc(mlplete and inaccurate advice. The agency

canm~t expect applicants and beneficiaries tt~ use a system that limits access and dispenses inaccurate or inadequate ad~ ice.” Testimony of Robert Shreve, American Ass(~iation of Retired Persons, before the House Subcommittee on Social Security, Committee (m Ways and Means, Oct.

28, 1993.

25 Social Security Administrr[ion, op. cit., fmmmte 1, p. 19.

‘bIbid., p. 20
34 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

Employee Number of

Time hours employees

Type of case Sitesa

(days) binvolved involved

Denial of initial DI claim 4 120 9.6 16

Award of Initial DI claim 6 155 12,8 26

Award of initial SSI claim 5 150 14,7 19

Denial of initial DI claim and denial of claim after

Reconsideration 8 223 16,0 24

Denial of initial DI claim and award of benefits after

Reconsideration 10 258 19.2 36

Denial of initial SSI claim and award of benefits after

Reconsideration 9 264 2 1 0 29

Denial of initial DI claim, denial after Reconsideration, and

denial after Hearing 10 506 281 34

Denial of initial DI claim, denial after Reconsideration, and

award after Hearing 10 553 3 3 0 45

Denial of initial SSI claim, denial after Reconsideration, and

award after Hearing 10 528 3 0 6 33

Denial of Initial claim, denial after Reconsideration, denial after

Hearing, and denial after Appeals Council 14 739 3 5 8 43

a This number represents the number of Ilmes a customer’s case passes thrcugh a site Multiple passes count as another processing “site “

b Cumulatwe ttme, from the customer’s point of wew, that It took from Imhal clwm mqulry to final settlement

SOURCE Social Security Admlnlstratlon, “lmprowng Service Delwery at the %clal Security Admlnlstratlon A Conceptual Proposal, ” Dec 30, 1993,

p 9

spent over $11 million in long-distance charges

for callers on “hold.”*’

SSA attempts to handle the call volume in a

number of ways. A control center in Baltimore

tries to balance the load among the various teleservice centers by rerouting calls as needed. In addition, the agency has “spike units’’—additional

staff that can be diverted from other duties to handle calls on busy days. In total, about 650 employees are available to complement the core

group of teleservice representatives. 28 Despite

these attempts, congressional testimony, General

Accounting Office reports, and HHS Office of the

Inspector General reports have consistently found

that SSA is well short of its goal of toll-free service that is as good as the best in the private sector.29

One objective for the new computers that SSA

plans to acquire is to make teleservice representatives more efficient. The goal is for staff to handle

calls more quickly and to ensure that a caller task

can be handled with one call, limiting the number

of cases in which a customer has to make multiple

calls to resolve a problem. One of the tools for accomplishing this is an “expert system” that pro271bld.

Zsfj(xlal Securi[y Administration, “Social Security 800: It Never Stops Working,” 1993.

29 SSA’S service delivery “vision” includes the objective that “Telephone service is as gtx}d as the best in the private sector and provides a full

range of services.” St~ial Security Administration, op. cit., footnote IO, p. i.
Chapter 2 The Challenges of SSA’s Growing Workload 35

Year 1990 2015 2020

Beneficiaries

(millions) 4 3 9 5 4 5 66,7 7 5 6

% increase as

compared with

1990 n/a 24% 52% 72%

SOURCE Social Security Admmlstrahon, “Folder 1 Introduction and Overwew of SSA “ 1993 p 12

vides a series of automated scripts for responding

to caller inquiries. This system is intended to ensure that all important points are covered and that

the agency gives consistent responses to inquiries.

As with disability processing, however, other

approaches beyond the use of new computers may

also prove effective. The most difficult problem in

managing the toll-free service is that call volume

is unevenly distributed throughout the month.

Nearly 45 percent of all calls occur during the first

week of the month .30 This is because all Social SeAverage age Average age

Year of men of women —

1960 5 7 3 56.7

1965 54.4 5 5 2

1970 5 3 9 5 5 0

1975 53.5 54,4

1980 5 2 9 5 3 7

1985 51.9 52,6

1990 5 0 4 5 0 8

1992 49.9 50.2

.

SOURCE Social Security Adrnmstrat!on, 1993

curity checks are issued at the beginning of the

month, and customers call with questions about

lost or stolen checks and other inquiries about

their benefits. Several outside reviewers have suggested distributing mailing dates throughout the

month, at least for new recipients.31

1 An Aging Population and

Other Demographic Changes

One major challenge facing SSA is an expected

increase in the number of beneficiaries as the

“baby boomers” born between 1947 and 1964 begin to retire in 2010. Table 2-2 provides SSA’s estimate of total growth in the beneficiary population as a result of the aging baby boomers. A more

immediate problem is that, as baby boomers reach

their fifties, the percentage expected to qualify for

disability payments will increase dramatically,

placing further strains on an already problematic

disability system (see table 2-3).32

In addition to growing workloads due to the

baby boomers, the agency must address changes

in workload resulting from judicial and legislative

actions. Currently, SSA estimates that it faces

about 100 class action lawsuits33 that could necessitate the readjudication of thousands of claims.

For example, a 1990 U.S. Supreme Court decision

~~soc]a] Secuflty Administration, op. cit., f(M)tnOte 1, p. 19.

~ I Wl]lls H W’are Chajrman, Conlml((ee on Review Of Sfj A’s Systems klodemizati(m Plan and Agency Strategw plan, k?ttef to Gwendolyn

S. King, C(mwnissioner, Social Security Administration, June 30, 1992, p. 10.

32 Soeial Security Administration, op. cit., footrmte 14, p. 6.

ll~{)nlpson, op. cit., fOOtnOte I 7, P. 4.
36 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

is expected to result in 175,000 new SSI beneficiaries. 34 The Court ruled in Sullivan V. Zebley that

SSA would have to change its rules for evaluating

children’s claims for SSI disability benefits; no

longer could the agency use different procedures

for evaluating child and adult disability claims.

Legislative action can affect SSA’s workload as

well. SSA will have to begin providing annual

Personal Benefit Statements (PEBES) to persons

over 60 in 1995, and to all workers 25 and older in

the year 2000. The resulting workload, both in issuing PEBES documents and responding to inquiries, will further strain SSA.

SSA will also have to adapt to changes in its client population. In particular, there are growing

numbers of non-English-speakers and a shifting

population with regard to geographic distribution.

SSA must serve an increasing percentage of persons who are non-English-speaking (primarily

Spanish, Vietnamese, and Chinese). The most recent national census indicates that one in seven

people in the United States speaks a language other than English at home—a 38 percent increase

over the past decade. To some extent, SSA tries to

handle these tasks—the 800 number is answered

in several languages. SSA must also be flexible

enough to handle a shifting population distribution. For example, the overall U.S. population is

expected to grow by 7 percent between 1993 and

the year 2000, but the population in the South is

expected to grow by 15.8 percent and in the West

by 19.8 percent.

THE NEED FOR CHANGE

SSA’s processes and procedures have evolved

over a period of decades. Most SSA processes

341bid.

Jss(xla] Security AdmirliWrMi(m, Op. cit., f(~)tnote I o, P. 9.

were initially designed to be carried out in a “highly specialized, sequential and manual environment.” 35 Over the past 20 years, SSA has acknowledged the need to reformulate its processes

and procedures, as well as to make better use of advancing information technology. The 1975 SSA

Master Plan, for example, recognized that

technology would be important, but that fundamental redesign of the SSA work process was key.

Two statements, one from the Master Plan prologue and one from the document’s summary, indicate this best:

The SSA is faced with the need to redefine its

processes if it is to cope with the ever-increasing

workloads.

Moreover, a projection of future workloads and

related administrative costs clearly demon--

strates that the current process, already under

stress, will be unable to support the magnitude

of growth expected. A comprehensive examination of current processes and the development of

a totally new plan for the future of SSA processes are necessary if the agency is to continue to

perform its program responsibilities.36

These quotations could appear in an SSA document today; overall redesign of SSA work processes is still required. SSA has developed a conceptual vision of service delivery (see box 2-1).

The challenge now is to translate this vision into

reality using both technology and process redesign or reengineering, linked together by strategic

and service delivery plans.

~6Reference point Foundation,” ‘-Innova[lons” for Federal Service: A Studv of Innovation Technologies for Federal Government Services to

Older Americans and Consumers,” contractor report prepared for the Office of Technology Assessment, February 1993, p. 49.
. ——— — -- ——..—. ——-

Chapter 2 The Challenges of SSA’s Growing Workload 37

The Social Security Administration has begun moving to address weaknesses in its service delivery In

1993, the agency outlined several goals that it would like to achieve in the future

Each person has a choice of how to interact with SSA—in person, by telephone, by mail, by fax, or by

personal computer

Addresses and telephone numbers for local offices, toll-free numbers, fax numbers, and personal computer mailbox addresses are well publicized.

Telephone service is as good as the best in the private sector with

● the telephone being answered on the first try by the public,

● live service available to meet public demand,

● service available in most languages,

■ all business, including claims and postentitlement, conducted by phone,

● all business conducted with one call with no need for additional call back, and

● information and referral to other services for the aged and disabled, Including health care, can be accessed

Through its network of local SSA offices

■

●

m

■

●

waits for In-person service are minimal,

virtually all Important decisions can be made by someone whom the public can see and deal with directly,

including disability determinations,

service IS available in most languages,

all business IS conducted with one contact with no need for additional contact, and

Information and referral to other services for the aged and disabled, including health care, can be accessed

Through the network of SSA contact stations located in places where the public congregates (including

shopping centers, community centers, etc.)

■ all business IS conducted, including claims and postentitlement actions, for those located in rural areas

and areas Isolated from local offices, and

■ high volume business IS conducted (e g,, SSNs [Social Security Numbers] in INS [immigration and Natu -

ralization Service] offices, SSI [Supplemental Security Income] claims in welfare offices) for those located

in third party offices

For those persons unable to interact with SSA by phone or visit a local office, In-person service will be

provided at the person’s place of residence

All SSA services, whether by phone or in person, are accessible to persons with disabilities

Facilities for electronic contact with SSA are located in communities to provide access to information

about Social Security and SSI benefits and for simple claims and postentitlement actions

Help in filing for Social Security and SSI benefits is provided by third parties and outreach programs are

conducted by Social Security to find people who may be eligible for benefits

SSA Information and actions are accurate and timely, SSA employees are courteous, and SSA does everything possible to minimize any inconvenience associated with mistakes or with delays

SOURCE Social SecurityAdmlnlstral}on, “lmpmvmg SewIce Dehvery at the Social Security Admlnls\rallon A Conceptual Proposal, ”

Dec 30 1993 pp 2-3
Social

Security

Administration's

Planning m

Process J

T

he Social Security Administration intends to spend about

$1.1 billion on information system procurement and

modernization over the next 5 years. Critics of the

agency especially the General Accounting Office

(GAO)—assert that SSA does not have a defensible justification

for this huge investment, and has not shown it will significantly

improve either service delivery or the work environment. 1

In discussions with Office of Technology Assessment (OTA)

analysts, GAO officials have stated that the core of their criticism

of SSA is the agency’s perceived unwillingness to undertake a

rigorous, systematic restructuring of the entire process of eligibility determination and delivery of Social Security benefits before

major additional procurements of information technology are

carried out.

SSA, however, maintains that:

~ meeting GAO’s demand that SSA first review and restructure

the entire service delivery process, which may require regulatory changes, would delay technological improvements for a

number of years;

) Specifically, GAO has urged SSA tt~ “link technology systems redesign to a longrange business strategy” by setting Perfomlancc g(~als; demonstrating institu[i(malized

plans and timeframes to achieve the goals; and identifying the financial, information, and

human res{mrces needed for implementation. See letter from Frank Reilly, Director of Human Rcsf~urces and lnfom~ati{m Systems, GAO, to L(mis D. Ent)ff, Acting Commissi(mer

t)f Social Security, Mar, 30, 1993. GAO also urged SSA to: 1 ) document [he justificati(m

for SSA”S technical soluti(m, 2) better define SSA’S need for intelligent work stations and

h~a] area networks, 3) develop an acc(mntabil ity methodology, and 4) better define state

disability requirements. GAO analysts say that SSA has made significant progress in respfmding to GA() criticisms ,and suggestions.

\ 39
40 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

■

m

■

the present “dumb terminals” are at the end of

their life, no replacements are available, and

failing devices are being cannibalized to repair

the inadequate number still in use;

new workstations and networks are necessary

to allow SSA to cope with a rapidly increasing

workload and to solve persistent and worsening

problems in processing disability claims; and

SSA has chosen technology that is flexible

enough to accommodate all changes that will

result from strategic planning and agency reengineering, both of which it is diligently undertaking.

GAO’S criticism mirrors criticisms leveled at

SSA a decade ago, during an earlier cycle of information technology procurement. In 1982, SSA

announced a 5-year “Systems Modernization

Plan.” This was a response to serious problems

that had developed during the 1970s, threatening

to disrupt SSA’s service delivery operations. It

was also a desperate attempt to prepare for the

coming decimation of SSA’s workforce by the Office of Management and Budget (OMB), from

which the agency has not yet recovered.

GAO2 and OTA3 both concluded that the Systems Modernization Plan was defective because it

was not based on a long-range strategic plan for

solving SSA’s deeper management and service delivery problems. The OTA assessment pointed out

that SSA’s attempts at strategic planning were

flawed because the agency failed to:

●

■

■

■

include strategic as well as operational planning;

have an effective vision of the future, with strategies for using new technology to accomplish

government missions;

involve users, clients, and the interested public

in the planning process;

identify innovative opportunities for use of information technology; and

■ effective y connect planning to implementation.

PLANNING IN THE 1990s

In the late 1980s, SSA set up a new strategic planning office and developed an Agency Strategic

Plan (ASP) released in January 1988. A revised

strategic plan appeared in September 1991, which

included some objectives for service delivery. The

ASP is now about to undergo its third iteration.

But only in mid-1993 did SSA move to correct

some of the deficiencies noted above:

m

●

The ASP of 1991 defined some service delivery

objectives and looked to modernized systems

to achieve them; thus, SSA is beginning to

forge a link between strategic planning, operational or service delivery planning, and systems planning.

SSA is in the early stages of developing a Service Delivery Plan that is intended to operationalize the goals of the ASP and move a step

further in generating “a vision of the future.”

A “framework for human resource planning”

has been developed.

The Systems Modernization Plan has become

firmly focused on “user needs” and users are

consulted in architecture design.

The new planning process includes parallel initiatives to develop and schedule steps toward

implementation.

In late 1993, SSA began to reach out to clients

and “the interested public” in service delivery

planning through the use of focus groups, surveys, and similar techniques.

SSA began, also in late 1993, the process of “reengineering” some especially troublesome service delivery processes; this is still in the early

stages.

These signs of progress are somewhat suspect

because systems planning still has first priority

2 U.S. Congress, General Accounting Office, Social Security Administration: Stable Leadership and Better Management Needed To lntpro}’e Ej2c~i\eness, GAO/HRD-87-39 (Gaithersburg, MD: Mar. 18, 1987).

3 U.S. Congress, OtTice of Technology Assessment, The Sucial Securify Administration and Information Technology+peciai Report,

OTA-CIT-311 (Washington, DC: U.S. Government Printing Office, October 1986), p. 15.
-.

Chapter 3 Social Security Administration’s Planning Process 41

and receives most of SSA’s planning resources; it

is already in the implementation stage. Strategic

planning and service delivery planning lag far behind systems planning, and therefore seem to be

the post-hoc rationale for systems procurement

rather than its purpose. The signs of progress are

also suspect because many of them have appeared

during the few months that SSA procurement

funding and authority have been clearly threatened by continuing GAO criticism of SSA planning--criticism echoing that made in the 1986

OTA report and the 1987 GAO report.

The SSA planning process is fragmented, poorly sequenced, and uncoordinated. The links between the component plans often appear weak and

pro forma. The sequencing is especially unfortunate. Systems planning, which should follow and

be designed to implement strategic and service delivery planning, has already reached the implementation stage and could, therefore, constrain

and distort the overall planning process.

To fully correct these problems, SSA needs an

agency planning process that is comprehensive,

integrated, and thoroughly supported at the highest executive level. Ideally, the comprehensive

plan would include the following elements

(whether embodied in one document or in several):

1.

2.

3.

4.

5.

an overall strategic plan to formulate longrange agency goals;

a service delivery plan to redefine improved

modes of delivery and target quality levels for

all SSA services-possibly including fundamental restructuring or “reengineering” of

SSA’s work process;

a systems plan that would procure technology

that is selected or designed to achieve the strategic and service delivery goals;

a human resources plan that would prepare

SSA’s workforce to use the technology to accomplish those goals in a cooperative and productive environment;

a facilities plan that would efficiently marshal]

SSA’s physical resources toward goal accomplishment; and

6. an implementation plan that would schedule

and coordinate the necessary steps in a rational

change program.

The service delivery plan should give form to

the “vision of the future” articulated in the

agency’s long-range strategic plan. The plans for

technological, human, and physical resources

would then spell out the steps to be taken toward

these goals. SSA has, indeed, put these elements

in place, but because it resisted long-range planning for so long, the relationships between the elements are only weakly established.

Fortunately, modern information technology

has become very flexible and adaptable. SSA systems modernization is taking good advantage of

this flexibility, choosing platforms that can accommodate and adapt to changing needs-even to

processes that are far more innovative and creatively reengineered than SSA planners appear

likely to come up with. Much of the ASP implementation—perhaps 75 percent, some SSA officials say—will require systems support. The systems planners maintain that the intelligent

workstation/local area network (IWS/LAN) architecture they have chosen is appropriate for

these goals.

The fact that an improved strategic planning

process is becoming institutionalized at SSA and

has been accepted by the new SSA commissioner

is a hopeful sign that the agency may eventually

achieve the benefits that will fully justify its ambitious systems procurement plans. In the past, new

commissioners have ignored or thrown out existing plans, forcing SSA to repeatedly begin again.

This is demoralizing to the agency and confusing

to congressional oversight committees.

AGENCY STRATEGIC PLANNING

An Agency Strategic Plan was issued by SSA in

January 1988. However, anew SSA commissioner who took office in August 1989 declared new

goals and objectives and redirected budget allocations, ignoring already stated priorities.

A second ASP was issued in September 1991.

It includes seven broad service goals, a set of stra-
42 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

tegic priorities, and 34 related quantified service

delivery objectives. 4 The service goals are: 1) to

issue Social Security numbers properly; 2) to

maintain earnings records properly; 3) to pay

benefits correctly; 4) to pay benefits when due;

5) to provide prompt, courteous service; 6) to inform the public of their rights and responsibilities;

and 7) to ensure the integrity of payments and records. The strategic priorities are: improving client access to SSA, improving the disability process, improving the appeals process, moving

toward a “paperless agency,” and establishing a

decentralized data-processing structure.

These five priorities are the clearest link between the Agency Strategic Plan, the Service De--

livery Plan, and the Systems Plan. In 1992, a National Research Council Committee on Review of

SSA Systems concluded that:

Although the ASP serves as a high-level overview or framework, it falls short of what would

be accepted as a strategic plan in industry. . . .

[because it] does not provide strategic, focused

implementation plans. . . .

SSA has, however, put in place a “Unified

Planning System” with a four-person strategic

planning staffs The Unified Planning System includes a process for revising and updating the

ASP and a process to translate ASP into detailed

“tactical plans” and annual budgets. The planning

staff works with representatives from major SSA

components (e.g., Operations Division) to do detailed planning for each of the strategic priorities.

Larry Thompson, SSA’s principal deputy commissioner, acknowledges that there are “a lot of

similar things going on in different places” that

need to be tied together, that there is not yet a

“shared vision,” and that the strategic plan still

needs to be validated by the public. However, he

believes that SSA is moving aggressively in the

right directions.

SERVICE DELlVERY PLANNING

Although SSA already is developing several projects to improve service delivery, it has just begun

to work up a Service Delivery Plan (SDP), in response to GAO’s repeated recommendations. The

basic assumption of SSA’s management is that the

substance of SSA service is mandated and can be

changed only in response to congressional actions. The agency does recognize that the location

and mode of service delivery can change, but SSA

has appeared content to let these changes be determined by technology, rather than proactively using a service delivery plan to define systems requirements.

The SDP began as the responsibility of SSA’s

operations Division, not of the planning staff. The

initial approach was to refine the work process to

take advantage of the technology envisioned in

the Information Systems Plan, i.e., IWS/LAN.6

Recently, more emphasis has been put on outreach

to beneficiaries, employees, and the public, and

the responsibility for development of the SDP has

been elevated to the Office of the Principal Deputy

Commissioner in order to move the plan to “a rapid track for completion.”7

The SDP so far exists only as “A Conceptual

Proposal.” The first version appeared in midOctober 1993. The aim was to fill out the “vision

of the future” spoken of in the Agency Strategic

Plan by specifying “the access methods from

which customers will be able to choose and the

level of service that the customer can expect from

SSA.” The conceptual proposal recognized some

4 A ~ompan~on” of the Cunent ]evels ofwrfomlance” With the levels to be reached by 2005 enabled SSA to “identify its strategic Priorities.’”

Under each of these strategic priorities are defined “initiatives”; under these, in turn, are sub-initiatives and “pro@ cts’” designed to demonstrate

ways of reaching the goal.

5 me P]mning staff is under [he senior execu[lve of fjcer (the third-ranking official in the agency, following the c~)mnlissioner and the Principal deputy commissioner).

6 Also see chs. 1 and 4.

7 (Then Acting SSA Commissioner) Larry Thompson’s letter to Comptroller-General Bowsher, Sept. 16, 1993, p. 2.
Chapter 3 Social Security Administration’s Planning Process 43

serious problems within the agency, including

business processes “which were designed to work

in highly specialized, sequential, and manual environments” and required large overhead structures, rigid responses, highly specialized jobs, and

limited career paths.8 The plan stressed the necessity for SSA to reengineer its processes to “dramatically change the way it does business” and to

maximize flexibility, responsiveness, and speed

while minimizing cost.

The details of this reengineering were lacking,

but the draft was definite on one point; namely,

that ‘*only the combination of Community-Based

Offices (CBOs) and Integrated Services Centers

(ISCs)” would “meet all of the objectives that

SSA wants to drive its process reengineering.”9

This definitive conclusion was reached on the basis of analyzing 18 different alternatives, ranging

from strong centraliza

centers to complete

1,300 field offices.

On December 30,

Proposal was distribut

tion into fewer larger-scale

decentralization into the

993, a revised Conceptual

ed as a basis for “stakeholder discussion s.” Far from being an amplified or

more detailed proposal, this version was a step

back toward generalizations and away from a

plan. In fact, the cover memo emphasized that the

revised draft “deleted all references to. . . a ‘service delivery plan’. . .“ and “. . limited SSA’s

next steps to the stakeholder discussions.” 10 Most

importantly, this version deleted all references to

community-based organizations and integrated

services centers, or to any alternative organizational arrangements. The reason given was that

“SSA has decided that it is premature to discuss

organizational alternatives without first deciding

what process changes it needs to make.”11

SSA says that is determining how to get the service delivery concept paper out for comment to

SSA managers, the union, advocacy groups, Congress, and others. As early as 1987, GAO urged

SSA to involve clients and public interest groups

in determining future service delivery methods, ’ 2

but SSA did not do so. Some SSA line managers

criticized this lack in early drafts of the Service

Delivery Plan,13 and even SSA’s planners noted

that the lack of consultation with the public compromises the agency’s ability to understand client

needs. The SSA’s Policy Council finally decided

in August 1993 that SSA needed public input on

service delivery from beneficiaries and the general public. From October through December 1993,

12 focus groups (including one Hispanic group

and one Vietnamese group) were held in six cities.

Their input, SSA says, “will be the cornerstone of

the Agency’s Service Delivery Plan."14

INFORMATION SYSTEMS PLANNING

In 1990, three factors drove the agency to evaluate

alternative systems strategies:

8 !+xlal Secxmty Administratitm, “Inlpr(Jving Service Delivery at the Social Security Administration: A Conceptual Proposal,’” Oct. 21,

1993, draft, p. Ii, In fact, hi)wcver, SSA has a prxmd and longstanding tradition of bringing employees up through the ranks from clerical u)

high-level executike positi(ms during a lifetime of service. This sharply changed during the 1980s as the last wave of systems m(~demization

r(lutinized and narrowed many jobs and cut off many job ladders. See Office of Technology Assessment, op. cit., footnote 3.

9 S(~ial Security Administration, op. cit., footnote 8, p. iii.

lo Coker nlenlo t. SSA Executive Staff, Dec. 26, 1993, accompanying revised c(MIC@Ud pKpSd of DeC.so, 1993.

I I Social fjecurlt} ,4dministration, “improving Service Delivery at the Social Security Administration: A Conceptual I%)posal, ”’ Dec. 30,

199.3, draft.

1 ~ General Account1n5

o Office, op. cit., footnote 2, p. 35. GAO alst) noted that, in developing the first ASP, SSA “did not seek or respond to

input tm~adly from within the agency. ”

13 ~e pr{)fe~sional ass[~.latlon reprcscntlng SSA’~ ]Ine nlanagers has SupPJfied a more &CentraliZed W(>rk distr-ibuti(~n focused (m small

c(~mmunitybascd field c)lflccs.

I 4 Th{)nlpson, [~p, cit., fo(mne 7
44 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

1. the shelf life of the existing terminals would begin to expire in 1995; maintenance contracts

were running out and some parts would no

longer be produced;

2. other agencies and corporations were moving

to distributed processing and networking; and

3. key elements of the ASP called for modernizing and improving basic processes and substituting electronic claims folders for paper folders; this implied—according to the systems

planners--establishing a cooperative processing architecture.

An SSA working group was convened in September 1990 to review technical and business issues and develop recommendations.15 The working group visited many agencies and companies to

identify and compare technical alternatives.16 It

eventually recommended “smart terminals” or

personal computers (as had earlier been recommended by the Department of Health and Human

Services’ (HHS’s) Office of the Inspector General, GAO, and the National Research Council). 17

The working group reported its recommendations

in March 1991, and set goals for pilot and pre-operational testing.

SSA planners then formulated 12 business elements to support the Agency Strategic Plan. These

were reviewed and endorsed by a National Research Council panel; then five alternative systems architectures were developed and analyzed.

This analysis was published in 1991.18 The five

architectures were rated using 15 criteria, and the

IWS/LAN architecture was rated best. Thirteen

IWS/LAN pilot sites are now operational.

The Information Systems Plan was developed

without guidance from a service delivery plan;

thus, it aimed at further automating the existing

work process, focusing on making recognized

tasks more efficient rather than on innovations in

the mode or quality of service. It does, however,

describe an information system “that will support

employees who provide personal services to beneficiaries and will support other service-delivery

options for those who choose to interact with the

agency differently than in the past.”20 The architecture, says SSA, is flexible enough to meet all of

the agency’s needs, however much the work process changes. In the worst case:

. . . Should current or planned reengineering efforts lead in a direction of such radically altered

business processes that the IWS/LAN platform

could not support it, the very scope of such

changes would make it unlikely that implementation would occur before the end of a normal life cycle for any equipment procured within the next few years.21

For the next 5 years (1994-98), SSA plans to

implement the IWS/LAN project agency wide, do

process reengineering studies, and support other

selected pilots and investments in technology

derived from SSA’s tactical plans (e.g., kiosks).

I J S(xlal seCUntY Administration, “Re~)fl t. the senate Appropriations Committee on the Intelligent Work Statit)tiLwal Area Network

Project,’” Apr. 5, 1993, p. 11. Transmitted by Elizabeth M. James, Acting Assistant Secretary for Management and Budget, Department of Health

and Human Services, memo, Apr. 16, 1993.

I b These included the ]ntemal Revenue service, Department of Health and Human Services, Department of Defense, central Intelligence

Agency, General Services Administration, Hartford Insurance Group, Wal-Mart, and several state governments.

17 me ~,orking group considered and re~c[ed a prototype” system called TAPLINK that used the existing dumb termina]-nlainfranle conlputer c(mnecti(m and added a minicomputer via a LAN to provide access to office automation applications and local computing jx)wer.

Ig S(Xia] Security Administration, “The Social Security Administration’s Analysis of the Alternative Architectures for the Distributed Data

Pr(wessing Pilots,” May 24, 1991.

19 ]bid. AIs() see summary of the Aug.

20 SSA, op. cit., fmmwte 15.

21 Thomps(m, t)p. cit. f~mtnote 7, p. 3.

0, 1993, SSA briefing for OTA,
Chapter 3 Social Security Administration’s Planning Process 45

The SSA’s unionized workforce has not participated actively in planning activities. According to

union officials, they did ask to participate in planning.

22 Union representatives were briefed at

quarterly meetings with top managers, and were

told that the automation plan would involve significant downsizing of the workforce and retraining for those retained.

SSA projects a savings from automation of

7,504 workyears, but insists that the resulting

workyear savings will be redeployed to other

tasks where additional workers are badly needed.

SSA may be forced to take personnel cuts anyway.

23

Union officials welcome automation and like

the proposed workstations, but fear that further

automation could be used to justify workforce

downsizing even though SSA is already understaffed as a result of downsizing in the 1980s and

growth in the workload.24 Union officials also argue that new automation should be deployed first

where it is most needed—to workers involved in

disability claims-processing. Training is another

stubborn issue. Union officials claim that training

is inadequate because the workload is so heavy

that people cannot be offline long enough for

proper training.25

Union officials support the IWS/LAN strategy,

but some privately assert that SSA consistently

“overbuys” technology that is more sophisticated

than it needs.26

Some of the problems that beset SSA’s systems

modernization efforts in the 1980s—such as a lack

of up-to-date systems and software skills, poor

choice of outside contractors, and inadequate

attention to user needs—have been corrected. A

comparison of SSA’s efforts with similar automation programs in the United Kingdom shows a

number of similar mistakes and problems. However, as a whole, the comparison tends to shed a

favorable light on the U.S. program. (See box 3-1

for details.)

In 1986, an OTA report, referring to SSA’s earlier Systems Modernization Plan (SMP), concluded—in words that apply equal] y well to SSA’s

current systems modernization efforts—that:

The basic strategy (of the SMP). . . is reasonable

and defendable in the sense that it is consistent

with accepted systems engineering practices . . . . [W]hether or not the original decisions were the best ones, the alternative strategies also have disadvantages and risks; they

cannot be shown to offer stronger guarantees of

success. . . . Achieving SMP’s objectives now

‘z Dlscussifm with John Gage, President, AFGE Local 1923, Sept. 8, 1993; and by telephone with Al Levy, Executive Directorof the AFGE

headquarters local, Aug. 17, 1993. The information about occasional briefings and worker-mmparticipatitm was also confimled in a telephone

discussi(m with David Jenkins, of SSA’s Office of Human Resources, also on Aug. 17, 1993. According to John Gage, participation in systems

planning was raised in contract negt)tiations, but it does not appear in the final contract. The uni(m has concentrated in the recent past on successfully negotiating ergonomic furniture.

23 According to SSA, the current OMB directive is that HHS must give up 5,000 full-time equivalent positions in 3 years; 2,000 will come

from SSA. Note, however, that while this is the official p)sition, the Department of Health and Human Services may reduce SSA’S cuts and shift

pers(mnel reductions to other areas within the department.

24 The number of SSA employees declined from 82,500 in 1983 to an estimated 63,300 in 1993 (full-time equivalents), a decline of 23.3

perceni, while the number of people served rose from approximately 39.5 million to about 47.5 million (a rise of 16.8 percent).

2$ Gage, op. Cit., f(x)tn(lte 22, SSA’S Office of Human Resources did a human factor impact survey using questi(mnaires and task analyses

and found that employees with 6 months’ experience were very positive, but complained that front-end training was “too intense” and refresher

[raimng was inadequately scheduled. Training is being reevaluated.

26 Ralph C. de Juliis, Executive Vice President, Nati(mal C(mncil of SSA Field Operations Locals, AFGE C(mncil 220, personal communicati(m, Oct. 4, 1993. One labor representative says that “’. . .SSA wants to buy this hardware (1 WS/LAN) and has all kinds of ideas how it might

be used when SSA’S work is reengineered pursuant to SSA’S many and various Strategic PlarIs. . . . reenginecring will be driven by very expenSIVC hardware purchases and the need to ex posrjtifto justify those purchases instead of having reengineering driven by the needs of the public

and the empk~yees (external and internal customers).”’
46 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

The United Kingdom’s Department of Social Security is one of the U.K.’s largest agencies, accounting for 30

percent of all public spending and 10 percent of central government staff. Until 1980, the agency used only

batch processing by central computers, at the client level, everything was done on paper. In 1980, a decision

was made to install 40,000 microcomputers in 1,000 offices, linked to centralized computer systems.

The plan was called the ‘(Operational Strategy.” Business objectives were to reduce costs and increase both

quality of service and job satisfaction.1 Net savings of $2.4 billion were to be achieved, mostly by eliminating

20,000 jobs.

In the next 11 years, projected costs rose from $l billion to $3 billion, while estimates of eventual savings and

benefits fell.2

The baste choice made in 1980 was between complete centralization and Integration of the database, and

decentralization. Centralization entailed disadvantages of size, complexity, heavy communications costs, and

highly complex software; and susceptibility to disruption from systems failure, sabotage, or natural disaster.

The disadvantages of decentralization were higher capital and running costs, untested microcomputer facilities, and problems of maintaining uniform software. “The compromise was a three-tier structure with a central

general index, several area (regional) centers, and terminals m local offices.

Planning and design took 3 years (1982-85), But in 1985, the government announced plans for completely

reforming social security and restructuring benefits, this sent much of the planning back to the drawing boards.

By 1987, many of the 14 implementation projects had slipped far behind. Anew “fast and furious” implementation initiative began, but slippage continued. A critical report from the National Audit Off Ice in 1989 was followed

by strong criticism in Parliament.

The major problems in the U.K. modernization effort included:

1 High turnover (45 percent) among the operational strategy staff and an extreme shortage of technical

skills These were dealt with by hiring “consultants, but the outsiders cost nearly five times as much

as the equivalent number of in-house staff The relations between consultants and internal staff were

bad There was Iittle skill transfer from consultants to government workers

2 Lack of low-level user Involvement systems designers did not understand the work processes they

were trying to automate. Some projects had “project user teams” as part of their steering committees, but

these were composed of “Higher Executive Officers, Senior Executive Officers, and above.”3

3. Policymaking and administrative management were unnecessarily separated. For example, the restructuring of benefits in 1985 took systems planners by surprise, “. .The overall tone of the Operational

Strategy was aimed at how best to run the administrative machine, given the policy inheritance, rather

than how to serve the public or effect an anti-poverly policy.” There was no link between operational

systems and the production of data for planning.

Experts say that the U.S. Social Security system, in spite of its problems, is more cost-effective than the U K.

system m terms of costs and time expended per transaction.4

1 Umted Kingdom, Department of Social Security, “Social Security Operational Strategy A Framework for the Future, ” 1982

2 Dlscusslon with Helen Margetts, Research Ofhcer, London School of Economics, m Washington, DC, Sept 10, 1993, see also

Helen Margetts,“The Computenzatlon of Social Security The Way Forward or a Step Backward, ” Public AdrrrmIsfratIon, VOI 69, autumn 1991, pp 325-343

3 Dawd Collmgrldge and Helen Margetts, ‘Can Government Informahon Systems Be Inflexible Technology? The Operational

Strategy Revlsled, ” forthcoming m /%b/Ic Adrnlms(ration, 1994

4 Margetts, op clt footnote 2
—— -——.

Chapter 3 Social Security Administration’s Planning Process 47

depends on SSA’s technical competence, on the

quality of its management as it implements the

SMP, and on certain factors outside of the

agency’s control, including Administration

policy and directives.27

HUMAN RESOURCES PLANNING

The Agency Strategic Plan of 1991 recognized

that the future will bring significant changes in

SSA's workforce, and called for the development

of a Human Resources Plan. The impending challenges include the approaching retirement of a

majority of SSA mid- and upper-level managers;

28 steadily increasing workloads; the need for

an increasing number of bilingual employees; and

the demand for retraining, job redefinition, and

new career ladders that is implied by new technology .

In the meantime, SSA already suffers from “serious imbalances in human resources allocations”

resulting from uneven attrition after the 20 percent

downsizing during the 1980s.29

Work on a Human Resources Plan for meeting

SSA’s recruitment, training, promotion, and motivational challenges began in 1991 when SSA

created a new position, deputy commissioner for

human resources. Not until the end of 1993, however, was a “framework” for human resources

(HR) planning ready for internal comment. The

first deputy commissioner for human resources

says that developing a plan was slow because

there was no Service Delivery Plan to guide HR

planning, and because “this was unexplored territory and we couldn’t find anyone who knew how

to do it.”30

HR planning was assigned to a small group of

people temporarily engaged in SSA development

programs. They conferred with human resource

directors from other agencies, and “scanned the

environment” to identify trends to use as a basis

for planning. A draft framework was developed

and reworked with the deputy commissioner for

human resources. A second draft was taken to the

other deputy commissioners, who insisted on a

number of revisions. A third draft was negotiated

with the deputy commissioners in individual faceto-face meetings. The framework has now been

presented to the SSA commissioner and released

to unions, internal advisory councils, and the SSA

Managers Association for comment.

Up to that point, the “human resources” themselves—the employees—had not participated in

the planning. 31 Nor were the personnel in SSA’s

regional offices given any opportunity to contribute. From this point on, however, employees at all

levels and in all locations are to be represented in

working out ways to achieve the goals laid out in

the framework.

The general theme of the framework is “that

managers must now learn to manage teams” and to

be coaches and mentors. Total quality management is “a central part of the vision. ” The elements

of the plan are staffing and recruitment, the work

environment, training and development, and man27 Office of Technology Assessment, op. cit., f(mtn(lte 3

28 Acc(miing [f) the General Accounting Office, 54 percent t~f SSA’S Senior Executive Service level and 42 percent of GS grades 14-15

employees arc eligible tO retire between 1992 and 1997.

29 Social Security Administration, op. cit., footnote” 8.

w me deput ~ Comnlissloner” for hunlan resources re~)~s hat her working gr(wp visited “many companies, agencies. and universities, ” but

C(NIM find “few or m) pw)ple who knew anything about human resources planning. ” In fact, however, human res(mrces pkannmg is a well-developed professional area with a large national pr(~fessional association, several excellent journals, annual and regmnal meetings. and a large body

of I itcrature,

~ ] As t. ~ hy ~,orkers ~ ere not asked t. pa~lclpate in the p!annlng pr(~ess, the deputy cmnmissi(mer for human r~s~)urc~s wlained that this

is m~t the way that SSA operates. At least until recentl y, the relati(mship between management and the uni(ms has been c(msidered adversarial by

b{)th sides. There arc three uni(ms the Assoeiatl(m of Federal Government Employees (AFGE), the Nati(m[il Teamsters Llni(m (NTU), and the

Natl(mal Fcdu-atitm of Federal Emp]oyees (NFFE). AFGE, a large white-c[d!ar uni(m, represents by far the largest percentage of SSA eJnploycx?s.
48 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

agerial tools. The framework is based on an assumption that there will be neither growth or further downsizing of the workforce. As already

noted, however, SSA could have to take its share

of the reductions assigned to HHS in the context

of the President’s “reinventing government” initiative.

The HR plan is merely a very general framework, according to the planners. It contains no

quantified goals and no time lines; these will be

developed later in implementation plans. (Draft

implementation projects are being developed but

are not yet, in March 1994, ready for comment.)

The HR planners are confident that when the HR

Plan, the Information Systems Plan, and the Service Del i very Plans are fully developed, “they will

all come together.” The links between them are,

however, tenuous during the development process. As the first IWS/LANs are being installed,

there is no long-range plan for managing the retraining, job redefinition, promotions, recruitment, and health issues that they will raise. Those

will have to be dealt with on an ad hoc basis, probably in part through labor negotiations.

FACILITIES PLANNING

Facilities planning will begin only when the other

plans and reengineering recommendations are accepted because facilities plans must be responsive

to them. SSA officials discuss several alternative

facilities scenarios ranging from one integrated

hub per state to highly decentralized communitybased centers, depending on factors such as a possible move to consolidate service centers or to significantly downsize staff. In the meantime,

routine facilities planning continues to ensure that

maintenance and necessary replacement of buildings, leasing arrangements, installation of ergonomic furniture, and site preparations for IWS/

LAN are carried out.

Significant changes in SSA organization and

delivery modes thus might be temporarily delayed

or hampered by the necessary changes in facilities

and accommodations, but this appears unavoidable.

REENGINEERING AND TOTAL QUALITY

MANAGEMENT

“Total quality management” (TQM) is an organizational tool used to restructure an organization

through “continuous improvement” to deliver a

complete, well-defined service to a specific group

of users. TQM emphasizes the cooperative efforts

of workers and managers to find new and better

ways of defining and relating goal-oriented tasks.

SSA has had a TQM effort underway for some

months, with a number of active TQM committees and the vigorous support of most of the top

managers. This initiative figures largely in all of

the plans under development, especially the HR

plan.

A more drastic organizational improvement

strategy is “reengineering,” which “. . . reflects

the growing realization that continual improvement . . . is not enough”32 and “aims to disrupt

and redefine established procedures on a one-time

basis.” 33

Reengineering is the fundamental rethinking

and radical redesign of business processes to

achieve dramatic improvements in critical contemporary measures of performance such as

cost, quality, service, and speed.34

From the reengineering perspective, any work

process should consist of combining various inputs to create an output of value to a customer

(who may be external or internal). Individual tasks

w GaV K Gu]den and R()~fl H Tack, “C(Jnlbining Quality and Reengineering Efforts for Process Excel lence,” lnl~rnmt;~n sfrate~y: 7fie

E.\ecuri\e’s Journa/, spring 1992, pp. I IO-1 15.

11 Richard p We]]s et a]., “what’s tie I)i fference Between Reengineering and TQEM’?” Total Quality En~’lronrnenlal ~arffJ/?enJenf. spring

1992, pp. 273-282.

34 Michael Hammer ~d James Champy, ~eefl~l~eerln~ ~~e c~rp~r~fi~~: A &f~fl~’e~~~j~r f-lu~~ness Re\,u/ufiOn (New York, NY: HarPerBusiness, 1993). (B(x)k excerpt, “The Promise of Reengineenng,” Fornme, May 3, 1993, pp. 94-97).
Chapter 3 Social Security Administration’s Planning Process 49

may be combined, eliminated, or automated to

achieve the desired workflow. Reengineering is

not incremental change; it reshapes core processes, eliminates unnecessary organizational hierarchy and work specialization, and identifies hidden flows of resources and information in order to

cut out those that are not productive. Reengineering also emphasizes a shift from individual data

collection for single use to pooling data for multiple uses,35 and emphasizes the connection between an organization’s strategic plans and information systems.

Unlike TQM, which can be tackled at departmental levels, many experts argue that reengineering should involve the whole company or

agency,

36 or at least a major, discrete product-delivery component of the agency. It works best

where a company or agency is floundering and has

no option but to do something quickly.37

In spite of the 1986 criticism by OTA38 and

continual prodding by GAO, SSA had not begun

to think seriously about the necessity of reengineering its business processes until the summer of

1993. On July 26, the decision was made to try reengineering the part of SSA--disability claims

and benefits-that was most clearly “floundering

and with no option but to do something, fast.” A

reengineering team or task force was charged with

recommending whether and how reengineering

was to be implemented. The task force began

work on October 4, and by the end of 1993 had interviewed about 1,000 people, conducted 12 focus

groups, and visited approximately 60 federal and

30 state agencies in 25 states. A first draft plan,

originally expected by February 4, 1994, is now

promised by March 31.

3S We]]s @ al., OP. c][.~ fcH)tnote 33.

The task force will make two sets of recommendations to the SSA commissioner. One set

will be based on current law; the other will be unconstrained by current law. There is to be a

1-month period for executive staff comment, followed by a final decision by the SSA commissioner. Implementation at some sites is planned before

the end of 1994.

The reengineering task force has been

instructed that it should “rethink” the entire disability process, except for things that cannot be

changed: 1) the basic definition of disability,

which is set by law; 2) the process of vocational

rehabilitation; and 3) the right to appeal, including

a hearing before an administrative law judge. SSA

is not holding the design team to the current hearing process or to the current federal-state division

of responsibility.39

The 18-person task force, consisting mostly of

SSA managers with field experience in disability

determination and processing, includes a physician and an administrative law judge. There is an

executive steering committee to provide direction; it includes one union official, one Disability

Determination Service director, and two SSA regional commissioners.

The reengineering effort is designed to correct

serious problems in the disability determination

and appeals process that were marked as priority

areas in the Agency Strategic Plan, but it is not directly linked to the more general planning activities. SSA maintains that, of necessity, the reengineering initiative and strategic planning will

continue in parallel. Strategic planning or the recommendations of TQM circles may produce im36 Dan Rasnlus, .. Reenglneerlng, or Evolution” Through VlO]ent Overthrow,” Munufu~>tur@

~T Jon parker “An ABC Guide to Business Process Reengineenng,” lndustria/ Engineering,

Systems, September 1992, pp. 52-58.

May 1993, pp. 52-53.

38 OTA op. Cit., footnote 3. in i[s 1986 report, OTA noted that SSA’S “frequent, drastic reorganizations broke up the earlier coherence and

accountability of major programs but failed tt~ provide what may have been better---a ratiorud structure based on a redesigned workj~o)t and

te(hnolog}-ba.~ edjtdn(tion.f.” (p. 14).

39 state ~)ffjceS (entlre]y funded b}, the federa] govemnlent through SSA) make the initial determinations of who Is or is not entitled to disability benefits.
50 [ The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

provements that are urgently needed and should

not be delayed until reengineering is implemented. If the improvements are congruent with the

more radical changes anticipated by reengineering, they will be preserved; if not, little will have

been lost and some interim benefits may still have

been enjoyed.

This strategy is based on two assumptions:

1 ) because they are mandated by laws, the basic

parameters of disability compensation will not

change, and 2) any significant reengineering of”

the process will require new regulations or basic

revisions of existing regulations, which take a

long time. Some laws related to Social Security

benefits are self-effectuating; that is, they mandate a straightforward change in benefits or entitlements with a date at which they will become

effective, and there is no need and no room for discretionary action by SSA.40 Other laws, however,

provide for determinations or discretionary findings by SSA;41 therefore, regulations are issued

using the notice of proposed rulemaking (NPRM)

procedures required by the Administrative Procedures Act to assure equity and fairness. NPRM

procedures take from 6 months to several years to

accomplish (in extreme cases, 5 years). New or revised regulations are then turned into detailed Program Operations Manual System (POMS) processing procedures.

This is a central dilemma for SSA in trying to

meet the GAO demand for thorough restructuring

or reengineering of the entire service delivery

process before final decisions about systems modernization and technology procurement are made.

SSA assumes that the wait would delay further automation for a number of years.

The reengineering team leader reports that they

will “look for things to implement quickly, using

studies already done” (although this violates the

reengineering premise that incremental changes

may interfere with the opportunities for radical

change). An internal SSA document entitled “Disability Process Reengineering and the Modernized Disability System,” dated September 2,

1993, says that SSA plans “to improve the disability process. . .[through]. . .a concentrated effort to

reengineer the procedures and methods that are

currently used to serve the customer,” and also

recognizes that “the primary enabling tools that

are being used” are the IWS/LAN technology and

the Modernized Disability System (MDS).42 In a

report by SSA to the Senate Appropriations Committee, the agency said that:43

Automation provides the tools that will allow

SSA to achieve reengineering of the current

business processes, not to simply automate what

is done today.

However, automation assumptions are already

in place although reengineering is just beginning.

The MDS is, in fact, designed to automate the disability claims process as it now exists, at the same

time laying a foundation for reducing paperwork

documentation, eliminating some queuing time,

and establishing better workload controls. It begins to provide automated decision logic and documentation, and incorporates some job function

changes.

~ ~is matefial is based on discussions with officials in the SSA Office of Regulations, November 1993. An example Of a self-effe~tuating

rule is the provision in the 1990 Omnibus Budget Reconciliation Act that all determinations of childhood disability must be based on a recommendation by a pediatrician. In such cases, there is no need for SSA to promulgate a regulation, although guidelines for operational procedures

may be issued.

41 Actually by theSecretav of Health and Human Services; such laws may read “l%e Secretary shall determine. . . .“ or “at the dlscretlOn of

the Secretary. . . .“

42 me MDS is descfi~d as .-a singular software so]uti~)n rurullng on a client server hardware platfO~.” me in~ake Pr(~esst ‘here ‘ata are

gathered from the claimant, is being reengineered to utilize decision support logic to structure the interview towiwd the particular body system(s) at issue. The structured interview will guide the claims takers to be sule that all necessary questions are asked and documented and to be

sure that all available infomlation is obtained in that first encounter.

43 S(xlal Security Adn]inistratitm, op. cit., fMnOte 1-5, p. 8.
-—

Chapter 3 Social Security Administration’s Planning Process 51

CONCLUSION

SSA has not yet satisfied the GAO recommendation that its systems procurements be based on an

integrated, comprehensive planning process

aimed at thoroughly restructuring its service delivery. SSA does, however, appear to be making a

good faith effort to create and institutionalize such

a process. The extent to which it will have the will,

resources, management stability, and executive

leadership to accomplish this goal remains to be

seen.

The lack of stable and consistent management

in the past, together with the failure to actively involve its customers or its large and dedicated

workforce, contributed to SSA’s failure to articulate a “vision of the future” that would authoritatively and convincingly define an appropriate

technological infrastructure for meeting the needs

of service recipients and service delivery.

The technology procurement and deployment

plan that SSA now seeks to implement was not designed on the basis of a thoroughly developed,

broadly participatory strategic plan. In spite of

this, SSA systems planners have learned from past

mistakes. They are increasing their attention to the

needs of end users, listening to the recommendations of national experts, and taking advantage of

the flexibility of modem information technology.

They appear to have chosen an architecture and

platforms that can accommodate changing needs

and new methods of packaging and delivering services as these are created by improved long-range

planning or process reengineering.

The development and acceptance of effective

strategic planning has a long way to go at SSA.

The elements of the process are, however, now in

place. Congressional oversight committees and

GAO should continue to insist that SSA leaders

nurture and broaden their planning to make it

more participatory, more creative, and more effective. This does not require that systems modernization be halted, but it does require that it continue to provide the flexibility to accommodate

changing agency requirements.
SSA’s

Plans for

Using

IWS/LAN

Technologies 4

T

he Social Security Administration is planning to move

from a computing system centered on large mainframe

computers to one that relies more on smaller personal

computers. This strategy is being pursued by most companies in the private sector, as well as other federal agencies. For

several reasons, a system based on personal computers promises

to provide a more cost-effective and responsive infrastructure for

the agency’s operations. However, the full benefits of the proposed new hardware will not be realized without the development

of software that implements the many SSA functions that are still

performed manually or are only partially automated.

SSA SYSTEMS PLANS

I Trends in Computer Technology

In the past, large organizations such as SSA typically built their

data-processing operations around expensive mainframe computers. These large computers were at the hub of a network of terminals located throughout the organization. Terminals look just

like today’s personal computers, with a keyboard and a display,

but have limited processing power of their own. They are used by

employees in the field to enter data for transmittal back to the

mainframes, which then do all the necessary processing, access

databases, and send a response back to the terminal. In the case of

SSA, 39,000 terminals in 1,300 field offices are connected to

mainframe computers at the National Computer Center at SSA

headquarters in Baltimore, MD.

I 53
54 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

Today, many organizations are moving away

from an environment in which all processing is

centralized at the mainframes.1 Instead, they are

using distributed or cooperative processing in

which more of the processing is done at the employee’s desktop. The “dumb terminals” are replaced by personal computers with considerable

processing power of their own. Personal computers are built around microprocessors—small silicon chips with the power of mainframe computers

of a decade ago. While early personal computers

were usually used by themselves, they are increasingly being integrated into an organization’s data--

processing operations, linked to each other and to

mainframes or other specialized computers

through high-performance networks.

There are two main trends that explain why organizations are choosing to rely less on mainframe computers to do all their processing. First,

for some types of applications, personal computer

technology is a more cost-effective source of processing power than mainframe technology. In

many cases, it may be less expensive for an organization to add capabilities at the user’s desktop

than to upgrade the costly mainframe computers

in the data center. Second, computer network

technology has advanced to the stage where computers at widely separated locations can quickly

exchange data and work together to solve a problem. There is no need for all of the processing

power and data to be in one central location; the

data and programs needed to solve a problem can

be located where it is most cost-effective.

A distributed system that relies on personal

computers has other benefits. First, there is considerable competition in the high-volume market

for personal computer hardware and software,

which brings prices down. Second, many analysts

believe that software for the new distributed systems can be developed at a lower cost and more

quickly, allowing organizations to make changes

rapidly and take advantage of new opportunities.

Third, the processing power at the user’s desktop

can be used to support graphical user interfaces

that are user-friendly. Potentially, several applicai ions can use a similar user interface, reducing the

time required to train employees to use new applications.

Personal computer-based systems can also

introduce fundamentally new types of applications into an organization. Imaging technologies,

for example, area promising development for organizations that manage large volumes of documents. Most personal computers are equipped

with high-resolution displays that can show detailed images. When documents are stored in electronic form as images, they take up much less

space than their paper equivalents and can be accessed more quickly. While image-related applications still strain the microprocessor and

memory technologies of today’s personal computers, many believe that they are quickly becoming cost-effective. SSA has also been looking at

other new types of applications, such as electronic

mail, facsimile, online manuals, and expert systems to assist in evaluating claims.

Most organizations with data-processing needs

similar to SSA’s are planning to move from mainframe-centered systems to distributed systems.

The computer industry trade press devotes considerable space to articles about a type of distributed

processing called “client-server” computing.

Servers are usually powerful machines that perform functions for several “clients’ ’-even when

processing power is distributed, there may be reasons to centralize some functions at a few computers. For example, a program executing on one

computer, the client, may request data from a second machine, called a “database server,” that

handles accesses to a centralized database. Main-

] see, for ~xanlple, peter Nulty, ‘.When To Murder Your Mainframe, “Forfune, Nov. 1, 1993, pp. 109- 120; Laurw Hays, “IBM Tries T(J Keep

Mainframes Afloat Against Tide of Cheap, Agile Machines,” Wal/ Street Journal, Aug. 8, 1993, p. B I; “HOW 1S Can Answer C(wpwatc Needs

With Client/Server C(mlputing,” Duturnation, vol. 39, No. 12, June 15, 1993, p. S2.
Chapter 4 SSA's Plans for Using IWS/LAN Technologies 55

frames may evolve into database servers: they will

no longer handle an organization’s entire processing load, but will manage the database for a network of personal computers.2

While there are several reasons why distributed

processing is considered to be the architecture of

the future, there are also concerns associated with

managing the transit ion from mainframe-centered

systems. One problem is that millions of dollars

have been invested in mainframe-based systems:

organizations would like to preserve as much of

this investment as possible. In addition, designing

and programming distributed systems may demand new skills of systems employees. Finally,

the new distributed systems are, in some ways,

more complex to design and manage. Among the

new concerns are questions of security and reliability in an environment where data and processing power are no longer under central control in a

computer center. Despite these uncertainties,

many organizations believe that distributed systems are the systems design of the future, and that

early deployment allows them to begin gaining

experience with the new technologies.

1 SSA’s Existing Computer System

Today, SSA uses a mainframe-based system that

connects about 39,000 terminals to the mainframes at the National Computer Center at SSA

headquarters in Baltimore.3 These terminals are

located in approximately 1,300 field offices

throughout the United States. Terminals are also

used in the 37 teleservice centers that serve callers

contacting the agency through its toll-free telephone number. The terminals are connected to the

mainframes through an extensive data network,

SSANet. Software executing on the mainframes

controls the terminals, generating text on the terminals’ displays that leads SSA employees

through the processing of a claim. In response to

these prompts, the field representatives or teleservice representatives enter data. The data travel

back through the network to the mainframes, and

then are processed or stored in one of the agency’s

databases.

In addition to the terminals, the field offices

also have a limited number of personal computers

that are used for word-processing and other office

automation functions. These are stand-alone machines, not part of the mainframe-based system

used for processing claims and for other programmatic functions. Because most offices have only

one or two personal computers, shared among all

employees in the office, SSA field representatives

currently have to leave their desks in order to use

one of the personal computer-based applications.

The current SSA computer system is, in many

ways, typical of large data-processing operations.

It reflects the longstanding dominance of International Business Machines (IBM) in mainframecentered computing: the mainframes are IBM

products, and the programming languages, operating systems, and network protocols are typical

of those used in an IBM mainframe environment.

For example, the network uses IBM’s Systems

Network Architecture (SNA) protocols, not the

more “open” Transmission Control Protocol/Internet Protocol (TCP/IP) or Open Systems Interconnect (OSI) protocols available from multiple

vendors. SSA software is written in Common

Business-Oriented Language (COBOL) or Customer Information Control System (CICS), languages rarely used by programmers developing

software for newer personal computers, minicomputers, or workstations.

The current SSA system has been pieced together over several years at a cost of several billion

dollars. The major initiative was the Systems

Modernization Plan of the mid-1980s, which

modernized the mainframe computers, upgraded

the storage hardware for the agency’s databases,

and saw the installation of terminals in SSA field

~Stcvc Lt)hr, “Present at (he Transition of IBM,”’ Ne\\ York Times, OeI. 26, 1993, p. D1; Laura B. Smith, “’Mainfranles Hang On,” PC Week,

\ {)1. 1 (). N(). 33, Aug. ~?I, ] 993, p. 87.

\For a ~cscrlptlon ,)f SSA’S computer systems, see !heiai Security Adnlmistration~ “lnfornlation Systems Plan,”’ Septemher 1993.
56 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

offices. As a result of this initiative, SSA was able

to stabilize its systems operations and improve

several aspects of its operations.4 The basic

claims-taking for retirement (Title II) has now

been automated, Social Security numbers can

now be obtained in less than a day, earnings records are updated in a timely fashion, and the

agency has been able to institute 800-number service.

While SSA’s computer systems have stabilized, there are still important shortcomings. First,

SSA has only moved part of the way to a full online system in which transactions are processed as

they are entered. Several functions are still processed in batch mode overnight, which prevents

SSA employees from verifying information as it

is entered or completing the processing of a claim

in a single session. In addition, the agency maintains separate databases for each of its programs,

preventing a “whole person” view of SSA clients. 5 In its recent management report, the General Accounting Office (GAO) noted that this was a

major shortcoming.6 Finally, like other large organizations, SSA has a considerable amount of older

software that has been criticized as poorly documented and maintained.

Another serious problem is that many of the objectives of the Systems Modernization Plan for

automating SSA business processes have not been

achieved—many agency functions remain largely

paper-based. Of the three major SSA programs–-

retirement, supplemental security, and disability---only the retirement program has been significantly automated. Even for the retirement

program, however, more complicated cases frequently cannot be processed to completion in the

computer system, and require manual intervention. Software that would automate claims-taking

for the more complex Supplemental Security Income Program has been completed only recently,

and its deployment has been limited by a shortage

of terminals in the field offices and mainframe capacity.

The complicated disability program has been

automated only to a very limited extent. For each

applicant, a large paper file of forms and medical

evidence is assembled by various components of

SSA, state disability offices, and doctors who provide medical evidence. Today, the claims-taking

is done in SSA field offices using paper forms.

Once the file has been compiled, it is mailed to the

appropriate state disability office, which then

gathers medical evidence and adjudicates the file.

The level of automation and type of computer

hardware vary from state to state.7 There is also no

uniformity in the software packages used by the

states and only limited connectivity between the

state computer systems and the SSA computer

system. 8

1 IWS/LAN—Technologies

SSA intends to move from its current mainframecentered environment to one that makes greater

use of distributed processing.9 The foundation for

this transition is the proposed purchase of 95,000

personal computers, to be installed over several

years between now and 1999. The mainframe

computers will continue to play an important role

in SSA computing, but the dumb terminals will be

replaced by more powerful and flexible personal

computers. These personal computers will be located throughout SSA, linked to each other and to

the mainframes by local area networks and SSA41bid., pp. 1-6, 1-7.

51bid., p. 3-49.

6U s Congress, Geneml Acct~unting office, s~~’ial Security: Suslained Efibrt Needed To improve Management and Preparefor the Future, . .

GAO/HRD-94-22 (Gaithersburg, MD: October 1993), p. 39.

7ssA, op. cit., f(xm-iote 3, pp. ~-~$ 3-45.

g]bido, pp. 3-45, 3-48.

glbid., pp. 4-30, 4-31.
-...

Chapter 4 SSA’s Plans for Using IWS/LAN Technologies [ 57

Net. The initiative is called the IWS/LAN project;

IWS refers to intelligent workstation (SSA’s term

for personal computers) and LAN to local area

network.

The computers are intended to standardize

computing throughout the agency. Computers

like those that will replace the dumb terminals in

the field offices will also be deployed in the state

disability offices, processing centers, and other

locations within the agency. Currently, there is

little uniformity in agency computing—for example, about 1,500 users at headquarters use a

UNIX-based system. A variety of systems are

used by the states, although the majority use Wang

products. SSA believes that a standard hardware

platform will allow the agency to standardize software packages, improve inventory and contract

management, and simplify the development of applications linking several parts of the agency.

The new personal computers will provide a

more flexible computing platform than the dumb

terminals they replace. SSA employees will be

able to use the same mainframe-based programs

that they currently access through the dumb terminals, but the personal computers will provide

additional capabilities. First, the programs that

previously ran on the stand-alone personal computers will now be available at each employee’s

desk. Second, the user will have access to a variety

of new programs, such as an electronic version of

the agency’s regulations and procedures. Third,

the personal computers will allow the user to access several programs at the same time in separate

windows on the screen. Finally, the personal computers will have a graphical user interface, replacing the characters-only interface of the dumb terminals.

However, it should be emphasized that it will

be some time before IWS/LAN significantly

changes the way SSA employees handle agency

business. The public will not see the benefits of

automat ion until SSA develops the software needed to support its programs. IWS/LAN only provides the hardware platform for this programmatic software. Software for many of the agency’s

major programs still needs to be developed, especially in the disability program. In some cases, the

development of good programmatic software will

first require the rethinking of the agency’s business processes. Even for those SSA programs that

are already automated, work will have to be done

to take advantage of the IWS/LAN computers’

new capabilities.

It should also be emphasized that the IWS/

LAN project will not fix all of SSA’s systems

problems. IWS/LAN encompasses only the deployment of personal computers and associated

LAN hardware. Other key projects, such as the

modernization of the agency’s databases, are outlined in SSA’s Information Systems Plan or in the

tactical plans of the Agency Strategic Plan, but are

not considered part of IWS/LAN. IWS/LAN is integral to the agency’s efforts to continue upgrading its systems, but is only one component. Progress will require sustained attention to the entire

SSA systems infrastructure, as outlined in the

agency’s Information Systems Plan.

IWS/LAN Hardware

The intelligent workstations that SSA plans to

deploy are personal computers that use microprocessors made by Intel Corp. 10 SSA’s use of the

term intelligent workstation may cause some confusion because the computer industry typically

uses the term workstation to refer to a more powerful class of desktop computers, typically built

around a different type of microprocessor and incorporating a higher resolution display than is

commonly used with Intel-class machines. Intelclass personal computers have been produced

since the early 1980s and have the largest market

share of desktop computers. Every few years, a

more powerful version of these computers arrives

on the market, but each generation is compatible

with older versions--old software can still be

I ~~t~lis of the 1 WS LAN Ccmfigum(itm can be found in !Wcial Security Administration, “System Zero,’” June 2, 1993 and Social Security

Administration, “The Interim Acquisition,” June 2, 1993.
58 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

used with the faster processors. The generation

that SSA plans to acquire is referred to as a “486”

machine; a more advanced generation has now

reached the market, but is considerably more expensive.

The personal computers in each field office will

be linked together by local area networks. As with

the personal computers, the network technology

that SSA plans to use is proven and widely used.

SSA intends to use “token ring” local area network technology, one of the two most widely used

types of local area networks available today. Both

the token ring networks and the other prominent

LAN technology, Ethernet, are industry standards, but the token ring format has been closely

associated with a single company, IBM, and is

typically used in business environments that have

an installed base of IBM equipment. As part of the

IWS/LAN project, SSA will buy the LAN hardware, which is electronic circuitry installed in the

personal computers that converts computer data to

the format expected by the network and provides a

connection between the computer and the cabling.

SSA will also install new cabling throughout the

field offices, teleservice centers, and other facilities.

The local area networks will allow employees

to share data and exchange electronic mail messages. They will also provide access to printers

and “servers, ” specialized computers shared

among all network users. One example of a server

will be the CD-ROM]] server that will be used to

access an electronic version of the agency procedures manual. Another important component of

the network will be a bridge that will connect the

local area network in each field office to the

agency’s network, SSANet. If, for example, a

field representative entered data for a retirement

insurance claim at a personal computer, the data

would travel from the computer, through the local

area network to the bridge, and then through SSANet to the mainframes in Baltimore.

IWS/LAN Software

Another important component of the IWS/LAN

system will be the system software. SSA has to

make decisions about the operating system for the

computers on its representatives’ desks and for the

servers. There is considerable uncertainty in the

market for operating systems, as major software

developers have recently introduced new products

specifically tailored for today’s more powerful

computers.

12 In a pilot configuration, SSA has

been using DOS and WindowsTM, but it is looking

at newer operating systems for future deployments. Also included in the system software is a

“network operating system,” which coordinates

the computers on the network, and “network management” software. SSA plans to monitor the operation of the IWS/LAN system using an IBM network-management product. The agency believes

this will allow operations to be controlled centrally by the National Computer Center, avoiding the

need for specialized technical personnel in each

field office.

The applications programs that SSA plans to

deploy on IWS/LAN fall into several categories.

First, the agency will acquire commercial, off-theshelf software for word-processing, spreadsheets,

and electronic mail. Second, each employee will

be provided with copies of SSA-developed PC

software now found on the stand-alone personal

computers in each field office. Third, SSA is developing several new applications that assist SSA

employees. One example of this kind of software

is the 800-number expert system that leads teleservice representatives through a series of scripts

that provide answers to telephone inquiries. SSA

believes that use of this program will result in

more consistent responses to caller inquiries and

will be especially valuable to new teleservice representatives.

1 ICD.ROM (compact disc.read only ~lemow) systems use the vast information-storage” capabilities of conlpact disks to store c(mlputer

data.

‘

2 Laurie Hays, “Computer Giants Duel Over Operating Systems.” Wall Street Journal, Nov. 30, 1993, p. Bl.
Chapter 4 SSA’s Plans for Using IWS/LAN Technologies 59

The most important component of SSA software development is the programmatic software.

It is important to note that this work is being done

in-house as part of the regular information systems budget. For programs that are already automated—retirement and supplemental security—

SSA will use the existing mainframe software for

the foreseeable future. The personal computers

will be used as if they were the old terminals: special software on the personal computers allows

“terminal emulation.” The terminal emulation

strategy permits an easier transition to the new

hardware, reducing risks and preserving the large

investment in the existing software. It also requires only limited software development resources.

Terminal emulation does not, however, take

full advantage of the new IWS/LAN platform.

Over time, SSA will have to write new software.

The first step will be to continue to use the mainframes for most of the processing, but to write new

software for the personal computers that will replace the existing character-based input screens

with new graphical input screens. In the long run,

more of the processing will be done by the personal computers. The agency envisions that the mainframes will gradually evolve into database servers—they will manage the databases and provide

data in response to queries from programs running

on the personal computers. This evolutionary

strategy is typical of most organizations making

the transition to distributed computing systems.

At the same time, the current focus of software

development at SSA is on software for the disability program, which is currently not automated.

This software is being written specifically for the

new IWS/LAN system; there will be no mainframe version. Over 100 developers at SSA are

working on this project, the Modernized Disability System (MDS). MDS will automate all of the

major steps of the existing process. The paper

forms will be replaced by an electronic record for

each applicant, and as much of the medical evidence as possible will be maintained in electronic

form. Instead of mailing the record to a state disability office, it will be transmitted electronically.

Computer support in the state disability offices

will assist in maintaining records, requesting

medical evidence, and adjudicating cases. The

first release of MDS is expected to be completed

in mid-1995, and will be pilot-tested in time for

full-scale deployment in 1996.

1 Development of IWS/LAN

SSA has been evaluating the IWS/LAN technologies since 1990. Several factors contributed to the

move to the new technologies. First, the agency

had begun to plan for the steps to be taken when

the dumb terminals deployed beginning in 1986

began to reach the end of their systems life. The

original estimated systems life for this hardware

was 5 years, although the first terminals deployed

have now been in service for 7 years and appear to

be functioning satisfactorily.

Second, by 1990, most organizations with dataprocessing needs similar to SSA’s had begun to

move toward the wider use of networked personal

computers. This was reinforced by a 1990 report

from the National Academy of Sciences that recommended that the agency consider a move to distributed processing. The Academy pointed out a

number of weaknesses in the existing centralized

architecture, and called for SSA to “retain the

present centralized database architecture but plan

for the introduction of ‘intelligent’ workstations

providing increased local support to the users of

the system and embodying a common user interface for performing any agency function.”13

Third, the agency was getting ready to begin

automating the Supplemental Security Income

program and was beginning to consider the appropriate platform for this effort. Recognizing the

aging of the old architecture and the technological

changes behind the National Academy of

Sciences’ recommendation, the agency analyzed

1 ~Na[lona] Research Council, .~),ytenl,v h~odcrnizotlon and [he .’j[raleK1(. p)~ns of r~e .Yo(.iaf .7elurityA drninistra\ion ( Wash ingtfm, DC: Na-

. .

tl(mal Academy Press, 1990), p. 5.
60 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

whether it was appropriate to support the SSI

modernization by buying additional dumb terminals. In fact, the initial deployments of IWS/LAN

equipment are considered to be part of the SSI

modernization program.14

During 1990, a number of different system designs were considered. At least two were clearly

viable—a UNIX-based system and an Intel-based

system. SSA selected the Intel/token ring configuration, chiefly on the grounds of compatibility

with the installed base of IBM equipment in the

agency’s systems. SSA then began a program of

experimentation with a test system installed at the

National Computer Center, referred to as “System

Zero.” After the agency had gained experience

with the technology using System Zero, it was

then deployed to 10 pilot field offices. The IWS/

LAN equipment has been operating successfully

in these offices as part of day-to-day SSA operations since the middle of 1992.

9 IWS/LAN--Costs and Schedules

The IWS/LAN project envisions the purchase of

about 95,000 personal computers to outfit all of

SSA’s operations—about 14,000 to the state disability offices and the remaining 81,000 to all

parts of SSA. 15 The proposed number of personal

computers is more than twice the number of terminals currently deployed because IWS/LAN will

be deployed in more locations than just the field

offices. The personal computers and local area

networks will be deployed between 1995 and

1999 in two phases. The deployment schedule is

still undergoing revisions; in early versions, SSA

planned to outfit the field offices in the first phase

and the remaining SSA offices and the state disability determination services in the second.

Funding for IWS/LAN will come from several

sources. The regular Information Technology

Systems budget funded the acquisition of about

3,000 personal computers for state disability offices in FY 1992.16 An additional 9,000 computers will be funded by the “interim acquisition,” a

$65-million purchase of computers, network

hardware, systems software, and off-the-shelf applications software.

17 Another important component of the IWS/LAN project, the development of

the programmatic software, will also be funded

through the regular information systems budget.

However, the bulk of the IWS/LAN deployment

was to be funded by the Automation Investment

Fund (AIF), $1.125 billion in no-year funding that

was to be used to supplement the regular informat ion systems budget over a 5-year period, in part to

facilitate the deployment of IWS/LAN equipment. For comparison, the SSA Information

Technology Systems (ITS) budget was $253 million in FY 1993.

Not all of the funding in the AIF was intended

for IWS/LAN. Only about $500 million of the

$1.125 billion was to fund personal computers,

network hardware, and associated software. A total of$313 million was to fund other information

technology expenditures that have not been specified at this time, and $307 million was to fund ergonomic furniture to be installed in the field offices before the IWS/LAN computers were

deployed. The ergonomic furniture is required under the terms of an arbitrator’s decision. In the FY

1994 budget process, Congress appropriated $300

million, not the full $1.125 billion; the $300 million figure is approximately the amount that SSA

had intended to obligate from the fund in FY

1994.

I me ‘.intenm acquisition’” ~) f9,()()() ~rsonal computers, Of which 5,300 deployed to the field offices are considered part of SS1 nmlemization.

I SSSA, op. cit., footnote 3, p. 6-22.

16SSA, Deputy C(mlmissi(mer for Systems, “Cooperative 1.2 Tactical Plan,” Jan. 26, 1993, p. 4.

17’Gwendolyn S. King, Comnllssloner,” S(Kia] Security Administration, Memorandum to Deputy Assistant secretary for lllfoMlatloll” ~t?-

s(mrccs Management, Department of Health and Human Services, Jan. 13, 1992.
... .—..—_ — —.

Chapter 4 SSA’s Plans for Using IWS/LAN Technologies 61

The initial deployments are being funded primarily under the interim acquisition. Site modifications at 90 field offices are underway to prepare

them for deployment of personal computers and

local area networks in 1994. In addition, several

state disability offices will be provided with

equipment from the 3,263 computers funded in

FY 1992. The deployment of computers to the

state offices is not considered to be part of the full

national deployment of IWS/LAN to be funded by

the AIF. Instead, these deployments are considered to be an interim effort to provide low-level,

baseline automation to states that currently have

no computer support, or only minimal support.

The software that will be used is not the full Modernized Disability System that is scheduled for deployment in 1996, but adaptations of software already in use by other states.

ANALYSIS OF IWS/LAN TECHNOLOGIES

In many ways, SSA’s plan to purchase thousands

of personal computers represents an encouraging

sign—an effort to keep up with the state of the art

in computer systems. In the past, particularly in

the early 1980s, SSA fell behind technology developments until it found itself with overburdened

and obsolete equipment. In part, a new focus on

staying current may have led to a technology-centered planning process dominated by the systems

component of SSA. There has been considerable

concern that the technology planning has not been

adequately integrated into overall SSA planning;

this is discussed further in the next section and in

chapter 3.

1 Transition to a Distributed System

SSA’s decision to proceed with the development

of a distributed computing platform is consistent

with the plans of large private-sector corporations

with similar data-processing needs. Most insurance companies, banks, and airlines began to

move away from mainframe/terminal configurations in the late 1980s; the question of how best to

manage this transition is a major topic in the trade

press for corporate information systems professionals. Moreover, by developing the IWS/LAN

system, SSA is following the advice of a National

Academy of Sciences panel, which recommended

that the agency move to a “distributed system,

with mainframe computers serving as the hub of

the system,” combined with “local intelligent

workstations to support service agents.”

Once SSA decided to move to a distributed system, it had to choose from several possible architectures. It appears that the IWS/LAN configuration selected by SSA is solid and proven. The

computing power that is being purchased is appropriate for SSA’s needs in the medium term,

supporting current applications and allowing sufficient room for the development of new programmatic software. The type of personal computer

and LAN hardware that SSA has chosen has been

proven in other organizations over several years—

Intel-class computers are dominant in the marketplace, and token ring networks have a significant

installed base. The choice of operating systems

will be more difficult, however, as there is considerable uncertainty in the market while vendors try

to position new products. ’8

Questions could be raised about some aspects

of SSA’s systems design. For example, much of

the reasoning that led to the configuration chosen

by SSA reflects the agency’s large installed base

of IBM equipment. Other organizations moving

to client-server architectures have relied to a greater degree on open systems; a UNIX-based system

was one of the two architectures supported by the

National Academy of Sciences panel (the other

was the architecture eventually chosen by SSA).

In analyzing the competing designs, the ease with

which equipment could be integrated with IBM

network protocols and network management

packages contributed heavily to the favorable

score for the system chosen.

Questions have also been raised about the

choice of the token-ring local area network over

18’$Bettlng on the server, ” Injorm(m(mk$’eck, Nov. 15, 1993, p. 68.
62 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

the alternative, Ethernet. Ethernet has a larger

market share and is significantly less expensive.19 

The cost differential is due, in large part, to the fact

that token ring development has been controlled

by IBM, which dominates the market for tokenring local area networks. However, these networks do have technical characteristics that some

users, particularly large organizations with mission-critical applications, believe justify the cost

differential. 20

1 Risks Associated With IWS/LAN

The basic architecture chosen by SSA should

minimize the risk that there will be cost overruns

or delays due to the technology. While trying to

keep up with industry trends, the agency will not

beat the leading edge with its attendant risks. The

IWS/LAN project uses common industry equipment; the personal computers and LAN hardware

are commodity items with millions of users in industry, homes, and government. The agency has

avoided a common mistake of some federal agencies that have purchased nonstandard equipment

because of perceived special needs. The transition

plan, which envisages the continued reliance on

mainframes and existing programmatic software,

could be more aggressive, but again minimizes

risk—the agency is trying to reuse what it already

has in place.

SSA has proceeded in a measured fashion to

learn about alternative technologies, conduct experiments, and pilot-test the technology. The pilots have now been operating in 10 offices for over

1 year, and appear to be stable, operating reliably,

and well received by employees. However, there

are still questions related to problems that may

arise when the technology is deployed on a larger

scale. The relatively small number of pilot sites

may not adequately test all of the potential problems that could arise when the equipment is

deployed to 1,300 sites throughout the organization. In particular, the agency will have to carefully monitor the management requirements as the

IWS/LAN system grows larger. SSA believes that

it is possible for the system to be centrally maintained by the National Computer Center in Baltimore, MD, without the need for specially trained

system managers in each of 1,300 SSA locations.

D Flexibility of IWS/LAN Technologies

In part, the successor failure of SSA’s systems design depends on the degree to which IWS/LAN

will be able to accommodate future needs and

avoid the need for a costly systems redesign for as

long as possible. The IWS/LAN technologies

have large installed bases and will likely be supported for several years—they are not unique to

SSA and are unlikely to be orphaned. Given the

large installed base, vendors are also likely to provide upgrade paths for IWS/LAN-type equipment—a more powerful generation of computers

compatible with the type that SSA has selected is

already on the market. In other words, IWS/LAN

will establish an architecture for SSA: a systems

design that will allow individual components to

be replaced as demands change, but will not require an entirely new system. For example, to buy

hardware with the capability to handle imagebased applications at this time would likely not be

cost-effective. However, as computers get more

powerful and networks more capable, SSA should

be able to upgrade the components of IWS/LAN

to provide image-handling capability without

changing the overall systems design.

Another part of the infrastructure will be the

technical skills of SSA’s Systems employees. The

Information Systems Plan recognizes that many

new skills will be required as the agency moves

from a mainframe-centered environment to one

that is based on personal computers and local area

networks. 21 Several new technologies will be

introduced at once, each demanding new trouble1 gMargie Semilog. “Can Token-Ring Still Compete(?” Conm~uni~ationsWeek, No. 467, Aug. 16, 1993.

20Cheryl Krivda, “Token Ring: A New Beginning,” [AN Magazine, vol. 8, No. 9, September 1994, p.

Zls(xlal secu~ty Adnlinis~a[ion, op. cit., footnote” 3, pp. 7-23, 7-24.

I 23.
Chapter 4 SSA’s Plans for Using IWS/LAN Technologies 63

shooting and systems administration skills. In

addition, software development for the new platform will require familiarity with new programming languages and operating systems.22 SSA

plans to meet these needs mainly by retraining existing employees, partly because of budget

constraints on new hiring. SSA will have to ensure

that training budgets are adequate to support the

development of the skills that will be needed to

fully utilize the IWS/LAN equipment.

SSA’s JUSTIFICATIONS OF IWS/LAN

Despite the fact that SSA’s strategy appears to be

workable technologically, it still has to be justified

from a business standpoint. Justifying any information technology purchase is a difficult task

because the benefits often lie in the future, are difficult to measure, and are subject to disputes over

underlying assumptions. Typically, in the private

sector, both financial and nonfinancial factors are

weighed in determining whether to proceed with

an investment. Financial analyses place an emphasis on determining the rate of return on the information technology investment, comparing

costs with benefits such as reductions in the cost

of doing business. Nonfinancial factors include

such objectives as cutting product-development

time or improving customer service. SSA has proceeded in a similar fashion in justifying IWS/

LAN, conducting a cost-benefit analysis and also

justifying the investment on other, nonfinancial

grounds.

1 SSA’s Cost-Benefit Analysis

SSA has justified its IWS/LAN purchase using a

cost-benefit analysis performed during the course

of the pilot tests conducted in 1992.23 In conducting this analysis, SSA measured the time required

to perform certain functions both before and after

the installation of the IWS/LAN in the pilot offices. SSA estimated that about 2,000 workyears

would be saved in the field offices over the life of

the equipment, translating into cost avoidance of

about $750 million. By comparing this figure with

the estimated life-cycle cost of$315 million, SSA

estimated cost savings of $450 million, or a costbenefit ratio of 2 to 1.

These data would indicate that IWS/LAN is

probably a cost-effective replacement for the

dumb terminals as they approach the end of their

useful life. Drawing any further conclusions is difficult because the agency did not use the pilot tests

to explore changes in the way the agency does

business. Each dumb terminal was replaced with a

personal computer, which was used in terminal

emulation mode with the same programmatic applications as before. The increased processing

power of the personal computers was not used to

any great extent—the field representatives used

the computers as if they were terminals, and performed their jobs in much the same way. In fact,

over half of the workyear savings found in the

cost-benefit analysis were due to the fact that SSA

employees no longer needed to walk from their

desks to one of the shared personal computers, as

they were required to do in offices equipped with

dumb terminals.

It will be some time before SSA uses IWS/

LAN in a way that significantly improves the

quality of service delivered to agency clients. True

improvements will require continued progress on

the development of software to implement SSA

programs. The IWS/LAN hardware alone does

not provide service improvements of the kind that

would be significant to clients. For example, SSA

estimated, in “Track 2“ of the pilot evaluation

process,

24 that IWS/LAN hardware with today’s

programmatic software decreased the average

wait-time at the Mondawmin pilot office in Baltimore by only 6 minutes, from 34 minutes to 28

‘zPcggJ Wallace, “Clm~ Server Ctm~puting Requires Top Corporate Developer Training, “ lnji)World, vol. 15, N(). 45, Nov. 8, 1993, p. 64.

‘~S(wlal Security Administration, ‘“Field office, PSC & TSC Benefits From IWS/LAN,” June 2, 1993.

24SSA, “The Soc]al Security Administration Analysis Me(hodoh)gy of the Perfom]ance & Benefits From the Distributed Data Processing

Pilots,’” Jan. 17, 1992.
64 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

minutes. 25 The package of software that SSA has

in place for IWS/LAN at this time is significant,

but does not have an appreciable impact on the

level of service provided to the agency’s clients.

The first project that may significantly improve

client service is the Modernized Disability System software, but its deployment is not scheduled

to begin until mid-1996.26

It should be recognized that SSA’s cost-benefit

analysis applies only to a subset of the 95,000

computers that the agency plans to acquire. It is

valid only for the replacement of the dumb terminals in the field offices and the teleservice centers,

which represents about one-half of the total of

95,000. No similar analysis has been done for the

computers to be deployed in the state disability

determination services, some federal offices that

are part of the disability process, and administrative components of the agency. Offices that are

part of the problematic disability determination

process may have significantly different roles in

the future, which may argue against early deployment to these locations.

I SSA’s Other Justifications:

IWS/LAN as Infrastructure

As noted above, the new IWS/LAN hardware by

itself does little to improve the quality of service

delivered to SSA clients. SSA contends that the

computers and local area networks constitute an

infrastructure that will provide a foundation for

future performance improvements, and that this

factor should be taken into account when evaluating IWS/LAN. While SSA is not currently in a

position to take full advantage of the technology,

the agency believes that it will be able to add new

capabilities, such as the Modernized Disability

System, once the hardware is in place.

The key problem for SSA in arguing that IWS/

LAN is infrastructure is that the benefits and costs

lie in the future. The agency is currently unable to

demonstrate real improvements in the service delivered to agency clients. GAO has expressed concern that these benefits will not materialize. At the

same time, because IWS/LAN is only one part of

the information systems investment needed to

achieve better performance, there is concern that

costs have been understated, GAO has estimated

that the total costs over the next 5 to 7 years could

be $5 billion to $10 billion,27 far higher than the

$1.125 billion requested for the Automation Investment Fund. According to SSA’s IWS/LAN

tactical plan, “IWS/LAN is designed to build an

infrastructure and, as such, is principally a cost

producer, necessary to achieve the benefits of

many related initiatives being designed to operate

on this platform.”28

All information technology deployments will

have aspects of infrastructure—the hardware will

be deployed with the intent to add components

over time. Some capabilities will be available as

the equipment is first deployed; others will be

added as limited organizational resources permit

their acquisition or development. This is demonstrated by SSA’s current software development

strategy: an initial emphasis on MDS, with other

projects to follow. Ideally, before the computers

are deployed, SSA would be further along with efforts related to using the new infrastructure and be

able to demonstrate how it plans to improve client

2SSSA, op. cit., footnote 23, p. 16.

%SA, op. cit. footnote 3, p. 5-5.

“General Accounting Office, op. cit., footnote 6, p. 5. Elsewhere in the report, GAO states that “SSA has not fully identified the costs and

benefits of implementing its modernization effort. This effort includes 159 initiatives and we believe could cost from $5 billion to $10 bill]on

through fiscal year 2005.”

28SSA, op. cit., footnote 16, p. 20. Additional costs will come from a variety of sources. In the medium teml, there are costs associated with

the development of the new software that will use IWS/LAN. SSA has plans to update the software in all of its major business areas, and has

instituted a major effort to provide automation for disability claims, the Modernized Disability System (MDS). Attempts have been made. at

least in some contractor documents, to look at these costs. Also in the medium term, there are hardware costs, such as upgrades to the mainframe

computers or network capacity. In the longer term, SSA has plans to distribute its database and move to a greater extent to imaging technologies.
Chapter 4 SSA’s Plans for Using IWS/LAN Technologies 65

service. SSA should be able to pursue an aggressive program of trials and experimentation before

embarking on the time-consuming development

of production software. The results of these experiments would create greater confidence that the

IWS/LAN technology will improve agency operations.

In addition, the agency should create a more

comprehensive planning package that ties together the disparate elements of the IWS/LAN project

and clearly shows the agency’s concept of how the

new infrastructure will be used. One problem, for

example, is that the software projects that are key

to the success of IWS/LAN are not included in the

$1.1 25-billion Automation Investment Fund that

will be used to buy the hardware. A comprehensive package, describing both software and hardware configurations, timelines, budgets, and performance goals for each SSA program, would also

help allay fears that the agency is underestimating

the cost of IWS/LAN and would provide a yardstick to measure the progress of the project. In

addition, the package could outline the experiments that SSA is conducting to explore future

uses of IWS/LAN, such as the paperless pilot test

in Chicago.29

ANALYSIS OF SSA JUSTIFICATIONS

FOR IWS/LAN

SSA believes that its information systems spending over the past decade has allowed it to process

growing workloads with significantly fewer staff.

It can also point to significant improvements in

some processes—for example, Social Security

numbers are now issued overnight, whereas a few

years ago the same procedure took 6 weeks. Still,

quantifying the benefits of information technology spending has proven to be difficult. One book

on the use of computers by business states that

29SSA, op. cit., footnote 3, pp. 3-49, 4-87, 4-88.

● ’there is no relationship between expenses for

computers and business profitability.”30 Some

economists have argued that there is no clear evidence that new technologies have raised productivity or profitability, despite the rapid advances in

information technology over the past decades.

Top managers in both the public and private sectors no longer take the potential benefits of

technology investments on faith, and are increasingly demanding more solid justifications for

their organizations’ growing expenditures on information technology.

~ IWS/LAN and Reengineering

There is a growing consensus that information

systems purchases will only have an adequate

payoff if careful attention is paid to their application.31 In the past, it was implicitly assumed that

information technology would automatically reduce staffing requirements, cut costs, and reduce

the time required to complete tasks. In some cases,

this may have been an accurate assumption: SSA’s

dramatic improvement in the time required to issue Social Security numbers may be an example

of such a process. In other cases, however, adding

computers to the process does not appear to have

made much difference.

Researchers have looked at successful information systems projects to determine the factors that

contribute to solid payoffs. One emerging theory

is that an organization that is taking best advantage of information technology will operate in different ways from one built around moving paper.

If organizations have not seen adequate payoffs

from past information technology projects, it is

because the technologies have been incorrectly

applied. Stated another way, information technology is the newest tool available to management;

ways of doing business that were developed be-

~~paul A, s[ras~rllan, T}ze Blls;ness Va/Ue o~’Conlpi(fers (New Canaan, CT: The Informati(m Economics pfeSs, 1990), P. ~~’ii.

1 l~{)nlas H, Da\enp)fl f~ro(efs /nn[)},a[l(}n: Reenglneering Work Through /n/iwnlarion Technology (Boston, MA Harvard Business

%ho(d Press, 1993), Michael Hammer, “Reengincering Work: Don’t Automate, Obliterate,” 1far\ardBusines.! Relic}+, July-August 1990, pp.

104-1 I 2.
66 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

fore the advent of information technology should

be rethought to take advantage of these new tools.

If information technology is simply applied to existing ways of doing business, the potential for

payoffs is much smaller.

The restructuring of ways of doing business is

referred to as reengineering or process innovation. It has become a common topic in the management and information systems literature, and

management consulting firms now advertise their

reengineering services. A key tenet of the reengineering theories is that organizations have to be

willing to radically restructure their business practices; incremental change is not enough. Proponents of reengineering believe that organizations

should be able to achieve dramatic performance

improvements by using information technology,

not just incremental improvements. They cite examples of companies that are able to complete a

process in a fraction of the time previously required. In many cases, these examples involve insurance or credit companies that perform tasks

that are similar to those of SSA—the processing

and evaluation of claims.

32 In justifying IWS/

LAN through its cost-benefit analysis, SSA has

emphasized that it will be able to maintain current

service levels as the workload grows or staffing

declines. Until recently, there had been no effort to

achieve more significant improvements in the service delivered to clients.

In late 1993, in response to GAO criticisms of

its justifications for IWS/LAN, SSA established a

reengineering task force to look at the agency’s

most pressing problem, the disability determination backlog. The disability process bears many of

the indicators of a process that needs to be rethought. Currently, there are many stages in the

process, complex federal-state interaction, and the

participation of several players. Only a small fraction of the time between filing a disability claim

and award or denial is spent actually working on

the file. Most of the 100 days or more required to

process an application involves time spent sending the file from one place to another, waiting for

the next stage in the processing, and waiting for

replies from medical examiners.

Other SSA programs may not require the same

type of rethinking. Compared with the disability

determination process, the SSI or retirement insurance processes are less complex, and a sustained effort to complete the automation of these

functions may yield significant benefits. Today,

the most time-consuming aspects of retirement

claims involve special cases that cannot be handled by the software that is currently deployed. In

its 1990 report, the National Academy of Sciences

emphasized the significant benefits that could be

achieved by completing this software.33 The first

versions of the SSI software are now being

deployed, and the agency should soon be in a position to evaluate its performance.

B IWS/LAN and Service Delivery

While much of the rhetoric of reengineering is

new and the tradeoffs involved in its application

to an essential public sector program uncertain,

one of its basic principles is well known: information systems spending should be driven by a clear

idea of the process that is to be supported and its

performance objectives. In its 1991 report, the National Academy of Sciences panel that looked at

SSA automation wrote that “technology itself

must not drive systems evolution”34 and that

“technology must be chosen based on its ability to

help fulfill the agency’s goals.” More recently,

GAO has stated that “the lack of a long-term business strategy has forced SSA to focus its technoljzMutual Benefit LI fe reduced the tinle required to process insurance applications from 5 to 25 days to 2 to 5 days, with 1 ~ fewer field office

positions. Cited in Hammer, ibid.

jJNati(Jna] Research Council, Op. cit., footn(Me” Is, p. 35.

jANa[lOnal Research Council, E/e~en(s ~j”,-$y~~enl~ Jfodernizu(ionjbr ~h(~ &)(,ia/ .$eC.u~i~yA~~li~iS/~~/io~(Wmhirrgt(mt DC: Nati(mal Academy Press, 1991 ), p. 22.
Chapter 4 SSA’s Plans for Using IWS/LAN Technologies 67

ogy upgrades on simply automating current, inefficient processes, rather than optimizing the

benefits that automation can provide to reengineer

and streamline operations. ”

Chapter 3 notes that important aspects of SSA’s

future strategy for providing service to clients are

still uncertain. Developing a more comprehensive

strategy that links service objectives to information systems purchases is more difficult than simply choosing new technologies, It requires cooperation among many components of SSA, most

notably between Systems and Operations.35

SSA’s systems planning has led other planning efforts-the service delivery plan has not been completed, and the reengineering task force was established only belatedly in response to GAO

criticisms. This makes it difficult for the agency to

show a clear linkage between its goals, the problems it needs to solve, and IWS/LAN.

Because important components of SSA planning are not complete, and because SSA is not in a

position to demonstrate significant performance

improvements due to the new technology, deploying IWS/LAN at this time would seem to violate

the principle that an organization should have a

clear idea of its business objectives before major

information systems purchases are made. SSA has

responded primarily by arguing that IWS/LAN is

infrastructure, able to accommodate whatever

changes are recommended by the planning processes currently underway.

The IWS/LAN architecture does appear to keep

open many options for the future. It is built around

commodity, proven hardware that is used in many

different ways in private industry and government. Furthermore, the basic architecture is flexible and should permit upgrades in processing capability, memory, and display technology without

changing the overall architecture. It is very likely

that computer systems of the type currently specified for IWS/LAN will be an important component in delivering services to SSA clients in the future, whatever the results of the disability

reengineering and service delivery planning efforts. In addition, early deployments will provide

additional experience that the agency can use to

plan for future deployments and applications of

IWS/LAN.

However, the ongoing planning efforts do significantly impact the number of machines required and the locations in which they should be

deployed. In a draft version of its service delivery

plan, SSA mentioned several options for developing new kinds of offices, increasing the size of

some offices, and integrating operations more

closely with the state disability determination services. 36 Similar changes may result from the disability reengineering effort, including the possibility of a significant change in the state-federal

relationship. These changes would clearly affect

the number of computers required—the state of

SSA planning raises serious concerns about the

justification for buying 95,000 computers.

Furthermore, future changes in the organization could impact the locations in which the new

computers are to be deployed. Even if the number

of employees remains the same, they could be doing different kinds of jobs in different kinds of offices. As a result, the ongoing planning efforts affect strategies for the phasing of IWS/LAN

deployments. In developing a deployment plan,

the agency should carefully analyze the impact of

the ongoing planning efforts and keep open as

many options as possible. It is important to minimize costs that might be incurred by wiring offices

~~WllI1S H. Ware chai~]lan, Conlnli[(ee on Review t~f SSA Systems, National Research Council, Icttcr to GM endo!yn s. King, c(Jn~missloncr, S(~lal Security Administratmn, June 30, 1992, p. 15.

q(K.,al s~~ur]ty Adrninistrati(m, “improving Service Delivery at the Sircial Security Adminlstratltm: A Ctmceptual Prtp)sal,’” Oct. 21,

.

1993.
68 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

that could be closed or restructured and to minimize the cost of moving computers from one site

to another.

SSA is currently rethinking its strategy for deploying IWS/LAN. In the first version of its deployment plan, early deployments were to be focused on the field offices and teleservice centers.

These offices had been studied as part of the costbenefit analysis, and were believed to be relatively

stable. As a result, the agency could be reasonably

confident about deploying the equipment to these

locations. Components of SSA associated with

the disability process, on the other hand, were less

stable and were generally slated to receive computers in the late 1990s. An exception to this strategy was SSA’s plan to provide some states with

personal computers as part of the baseline automation effort. In recent months, however, the agency

has indicated that, in response to GAO criticisms,

it would reorient its deployment toward field offices, teleservice centers, and state disability offices with the greatest disability backlogs and,

presumably, the greatest potential for the new

equipment to make an impact.

The concerns about the limited performance

improvements shown to date and the current state

of the planning effort have led some to suggest

that deployments be delayed or drawn out until the

agency is in a position to use the computers effectively during their entire systems life. By

mid-1 994, the agency should have completed its

service delivery plan and progressed in rethinking

its disability process. However, SSA argues that

its dumb terminals are quickly approaching the

end of their useful lives. In the agency’s view, delays in deploying IWS/LAN run the risk of hurting

service delivery or incurring high repair costs, and

the next-generation equipment needs to be procured and deployed as soon as possible. In addition, delays in the procurement process may result

in further delays in the actual deployments. An alternative strategy would be to replace dumb terminals as needed, if in fact they are no longer serviceable, until SSA is in a position to demonstrate

service improvements resulting from IWS/LAN.
Electronic

Delivery of the

Social Security

Administration’s

Services 5

T

he Social Security Administration has improved its strategic and information systems planning over the last decade.1 But most of this planning predated the recent government-wide emphasis on reinventing or reengineering

the delivery of agency services in large part through the use of information technology. SSA has long recognized the importance

of computers and telecommunications in carrying out its mission

and has recently intensified its reengineering and electronic delivery initiatives. Electronic delivery is one component of SSA’s

strategic and tactical plans, and will be addressed to some degree

in the agency’s service delivery plan still being developed.

The Office of Technology Assessment’s (OTA’s) recently released report, Making Government Work: Electronic Delivery of

Federal Services,2 provides a framework that can be used to review SSA’s electronic delivery activities and to identify opportunities for improvement that could be included in SSA’s service delivery planning. The Administration’s “National performance

Review”3 (NPR), “Reengineering Through Information Tech1 See chs. 3 and 4.

2 U.S. Congress, office of Technology Assessment, Making Go\’ernmenl Work: Ele~-

rronfc Z)eli~’cry of Federa/ Sen’ices, OTA-TCT-578 (Washington, DC: U.S. Government

%intmg Office, Septemher 1993).

3 Vice President Al Gore, Creating a Go\ernrnew That Worb Better & Costs Less:

Reporf oj’rhe Nationa/ Perjbrmance Re}vew’ (Washington, DC: U.S. Government Printing

Office, Sept. 7, I 993).

6 9
70 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

nology,”4

and “National Information Infrastructure”5 (NII) initiatives also include numerous

principles and recommendations that are relevant

to SSA’s service delivery planning. The full potential of the intelligent workstation/local area

network (IWS/LAN) infrastructure discussed in

chapter 4 can best be understood in the context of

a wide range of methods for electronic delivery of

SSA’s services.

EVALUATING SSA’s ELECTRONIC

SERVICE DELIVERY PLANS

In Making Government Work, OTA identified

seven strategic elements of successful electronic

delivery. Collectively, these strategies would, if

implemented, represent a considerable shift in

emphasis toward a creative, innovative, citizenor client-centered approach to service delivery.6

Each of these strategies is discussed below with

respect to SSA.

1 Grassroots Involvement of

SSA’s Customers

SSA recognizes the importance of involving recipients in plans to improve service delivery. Until

recently, however, recipients’ direct involvement

in agency planning was largely limited to periodic

user surveys conducted by the Department of

Health and Human Services’ (HHS) Office of Inspector General and by the General Accounting

Office. The surveys focused primarily on customer satisfaction with telephone calls, office visits,

and mailed or printed materials. SSA is conducting, for the first time, a series of focus groups with

service recipients. 7 This is commendable and

should produce useful information.

Overall, however, SSA is only at the earliest

stages of developing an effective plan for recipient

involvement. SSA could benefit from an annual

commitment of resources to grants and contracts

with recipient and advocate groups—as an integral part of the overall SSA effort to reengineer

and improve service delivery. In Making Government Work, OTA suggests. as a guideline, that

each agency spend a minimum of 0.25 percent of

its annual information technology budget for

grassroots involvement.8 This would amount to

perhaps $1.25 million per year for SSA (assuming

an average annual information technology budget

of $500 million9). One million dollars seems almost insignificant compared with the overall SSA

automation and operational budgets. But it would

stretch a long way if it were allocated among various local and national groups that directly represent SSA service recipients or provided to not-forprofit groups that are dedicated to finding ways to

improve SSA service delivery—including

through the use of electronic technology.10 

4 Na(lona] pe~ommce Review Accompanying Rep)fi, Reengineering Through /njtirmation Technology (Washington, DC: U.S. Gt)vemment Printing OffIce, September 1 993).

5 Information Infrastructure Task Force, The Nalionallnformafion Injra!trucrure: Agenda jiw Action (Washington, DC: U.S. Department of

Commerce, National Telecommunications and Information Administration, Sept. 15, 1993).

6 OTA, op. cit., f(xMnote 2, pp. 3, 17-18, 128, 131.

7 Social Security Administration, “improving Service Delivery at the Social Security Administration: A C(mceptual Pr(qx)sat,” first draft,

Oct. 21, 1993, second draft, Dec. 30, 1993.

8 OTA, op. cit., footnote 2, pp. 10, 17-19, 105- I 21, 128.

9 Includes about $250 million in SSA’S baseline budget for information technology hardware, software, and services; $150 million for personnel; and about $100 million on average (conservatively) in SSA’S automation investment expenditures.

10 see, e.g., Nmcy G. Shor, Nati~na] organization of Social Security Claimants’ Representatives, “SSA Service Delivery: A Presentation of

Current Problems and Opportunities for improvement,” contractor paper prepared for the Office of Technology Assessment, Jan. 13, 1994;

Richard P. Adler and Mary S. Furlong, SeniorNet, “Electronic Delivery of Social Security Services,” contractor paper prepared for the OffIce of

Technology Assessment, February 1994; and William A. Beasley, National Public Telecomputing Network, The OTA/NPTN Telefw-um Project: Use of Telecommunications Resources by the Social Security Administration,” ctmtract{~r paper prepared f{~r the office of Technology

Assessment, Feb. IO, 1994.
—

Chapter 5 Electronic Delivery of the Social Security Administration's Services 71

To obtain input from recipients, OTA commissioned a series of focus groups with SSA beneficiaries. The more than 40 who participated emphasized the importance of friendly and patient

SSA staff assistance, whether by phone or in person. They cited frustrations with long delays in

getting through on busy SSA phone lines, language difficulties for those who speak English as a

second language, and transportation problems in

physically getting to local SSA offices. Participants suggested that SSA make more extensive

use of senior citizen centers for face-to-face service delivery, and improve its 800 telephone service (including more user-friendly phone menus,

perhaps distributed in pamphlet form to senior

centers).11 

An annual financial commitment to support

grassroots involvement also would help SSA to

implement the NPR’s recommendations to:

1) create customer-driven federal programs; 2) develop customer-service performance standards

(explicitly including SSA); and 3) streamline the

collection of information concerning customer

satisfaction. 12

1 Community Infrastructure Development

OTA concluded, in Making Government Work,

that the involvement of the local community infrastructure can greatly facilitate electronic service

delivery. The infrastructure, as defined by OTA,

includes people and organizations experienced in

meeting the needs of local citizens and/or in training and assisting citizens in using information

technology. Schools, libraries, community centers, town halls, and hospitals offer some of the

most highly leveraged opportunities because

these locations are typically heavily used and well

respected, and provide a multiplier effect for

technology investments.

SSA recognizes the importance of community

organizations in facilitating the delivery of SSA

services. SSA has a continuing outreach program

to better meet the needs of recipients with special

needs—for example, those who do not speak English or are physically limited or isolated. But to

date, SSA has only minimally explored the potential of directly involving community centers, senior centers, libraries, and the like in delivering

SSA services-especially through technologyenhanced means. The experience of SeniorNet,

for example, suggests that some senior citizens

who might not have the knowledge, motivation,

or equipment to receive services via personal

computer at home might well be able to receive

services at a senior center or other location where

assistance and equipment are available. 1

3

Again, applying OTA’s minimum guideline

suggested in Making Government Work (0.25 percent per year of the agency’s information technology budget’ 4

), SSA would invest about $1.25

million annually to develop the community infrastructure to improve delivery of SSA’s services.

This modest annual commitment to community

infrastructure development also would help SSA

address the NPR’s emphasis on community empowerment15 and the NII's priority on community

or civic networking.16 

I I pa~ners In Enterprise, InC., “Improving !Wcial Security Services: Focus Group Discussions in the Washington, DC, Area,” contractor

rcpjrt prepared for [he Office of Technology” Assessment, Nov. 10, 1993.

! 2 ~,,ce Prc,ldcnt Gore, ~)p, ~It., f(x)tnote q Pp 46 161. F+esident Clinton issued an Executive orderon Sept. 1 I * 1993* requifing a]] agencies

,..

to Idcntlfy and sur~cy customers: set and benchmark customer service standards; report on the results of cust(mner service surveys by Mar. 8,

1994, and prwparc a cust(m}er service plan by Sept. 8, 1994.

I ~ Adler and Furlong, op. cit., footnote I o.

I d OTA, op. cit., ftx)tno(e 2, pp. 10, 17-19, 1 I 8-120.

I $ \’lcc prcsldcn[ Gore, op. cil., footnote ~, p. 37.

I ~ 1nfornla[lon ” [infrastructure Task Force, op. cit., footnote” 5, pp. 15-16.
72 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

I Encouraging Innovation at SSA

Federal agencies need to actively encourage employees, clients, and other participants to try new

ways of delivering services-including electronically. SSA’s strategic and tactical plans support a

wide range of projects to develop and test innovative technology applications. Until recently, however, these efforts have been focused on improving existing work processes and delivery modes,

or pieces thereof, rather than on rethinking and reengineering the processes themselves.17 

Current SSA innovation projects, collectively,

may already exceed the level of 0.5 percent of the

agency information technology budget suggested

in Making Government Work.1 8 SSA is pilot-testing (in some cases actually operating) many, but

not all, of the technologies identified by OTA as

having significant potential for electronic delivery.

19 However, SSA might be well advised to invest at least $2.5 million annually in a new reengineering innovation fund that would support

projects and tests of electronic delivery that would

perhaps radically depart from current operations.

The key is to protect these funds for truly innovative technology applications that might not necessarily flow from current plans and commitments.

SSA has been investing in innovation, but not

enough in sufficiently aggressive innovation.20

An SSA innovation fund could and probably

should be disconnected from operational or preoperational electronic delivery programs in order

to avoid competition for funds and excessive red

tape. Once a specific electronic delivery application reaches the pre-operational stage, then more

explicit and rigorous guidelines usually would be

needed and funding for pre-operational and operational innovations would presumably come from

operational budgets.

An SSA innovation fund would comply with

the spirit of the NPR’s recommendations that suggest multilevel funding of innovation at the

agency, departmental, and government-wide levels.21 The NPR’s implementing legislation proposes a government-wide innovation fund with

self-sustaining financing and rigorous project

selection procedures. 22 This approach could be

overly constrained and discourage some of’ the

most promising proposals. A government-wide

innovation fund should not preempt agency-specific innovations funded out of individual agency

budgets.

To minimize duplication of effort, SSA should

participate in any government-wide clearinghouses on innovations in electronic service delivery that may be set up. In Making Government

Work, OTA suggests that Congress or the Office of

17 For a discussion of SSA’s pilot pr~~cts, see Social seCUIity Administration, “Implementation of the Social Security Administration’s

Strategic Plan-A Status Report,” June 1993; and Social Security Administration, The Social Securi/y Administration’s lnforma~iun Sy~tems

Plan (Baltimore, MD: September 1993).

18 OTA, Op, cit., footnote 2, pp. 17- 19! 129.

19 For a tist of technologies, see OTA, op. cit., footnote 2, pp. 7-8.

Zo SSA’S lack ~lf ag~essiveness appe~s to reflect in part an overly cautious view of the ability of current and future recipients tO receive

services electronically, and overly centralized management and control of exploratory technology projects. SSA field employees probably represent a significant untapped reservoir of innovative ideas on using information technology to improve service delivery.

21 Vice pre51dent Gore, op. cit., fOOtIIOte 3, P. 111.

zz see tie G[)vemment Refom ~d savings Act of I 993, sec. 1539, proposed by the Administration to implement, among other things? a

government-wide innovation fund proposed in the NPR report, op. cit., lbotnote 3, pp. 162, 166, and Reengineering Through /n@-mation

Technology, op. cit., f(xmmte 4. The fund would be financed through savings from agency information technology applications, and would

operate like a venture capital fund. Agencies would submit proposals for evaluation on rate of return, payback, budget justification, and the 1 ike.

Agencies would receive loans to fund innovative projects, but with the ex~ctation that these monies would be paid back into the fund with

interest.
Chapter 5 Electronic Delivery of the Social Security Administration’s Services 73

Management and Budget (OMB) direct the establishment of such a clearinghouse and that agency

participation be mandatory.

23 This implies that reporting on electronic delivery innovations should

be included in all project plans and budgets. SSA

would benefit greatly from quick and easy access

to the results of electronic delivery projects in other agencies (including state and local governments), just as those agencies would benefit from

the SSA’s electronic experience.

I Creating Directories to SSA Services

If citizens are going to use and benefit from electronic service delivery, they need to first know

what services are available and where. OTA’s research in Making Government Work reaffirms the

need for directories or “electronic road maps” to

help citizens identify and locate relevant services. 24 SSA is beginning to recognize this need

and is working on improved access to its service

information via toll-free 800 numbers, automated

phone response systems, and electronic kiosks.

However, SSA has not seriously explored the use

of computer networks and electronic bulletin

boards for providing either directories to services

or the services themselves; nor has SSA investigated the use of government-wide gateways and

networks to deliver agency services and information.

In Making Government Work, OTA suggests

that agencies be required to develop and implement their own electronic directories to services

and information, and to participate in the emerging government-wide directories and gateways .25

SSA could participate in these government-wide

activities in order to take full advantage of opportunities to improve service delivery.

The NPR and NII likewise have emphasized

the importance of agency-specific and government-wide directories to agency services (including information about services and information as

a service) .26 Information about SSA’s services,

and the services themselves where appropriate,

logically would be included in any “Governmentwide Information Locator System” (GILS), or the

equivalent, that is established.27

I Creating Alternative Futures for SSA

Agencies need to develop creative visions of their

future service delivery by generating new ideas

for the use of information technology and matching electronic opportunities with agency missions. SSA’s strategic and information system

plans do identify a range of technologies relevant

to their services, and develop an intricate web of

tactical plans and projects intended to gradually

improve service delivery. 28 The plans seem, however, to lack creativity with regard to future service delivery scenarios. This is partly because the

major planning effort predates both the reengineering and service delivery projects recently initiated by SSA, and the NPR’s general emphasis on

reinventing federal agencies (and redesigning

SSA’s service delivery in particular). The SSA’s

plans are quite uneven with regard to technological innovation; end-user applications—such as

computer networking, electronic bulletin boards,

and kiosks—are not treated in much depth.

The SSA’s planning effort could be strengthened by: 1 ) encouraging from the inside, or hiring

23 OTA, op, cit., footnote 2, pp. 130-131.

24 Ibid., pp. 17, 19, 54, 131, 153-156.

‘~ [bid.

26 Vice Presdent Gore, op. ci[., foo[no(e 3, p. 166; National lnfotmation Infrastructure Task Force, op. cit., footnote 5, pp. 11-12.

27 The Government Refoml and Savings Act of 1993 includes a provision establishing GILS. Also, the Paperwork Reduction Reauthorizatitm Act of 1993, Mar. 31, 1993, includes a provision clarifying and strengthening the Federal Information Locator System.

‘g SCC chs. 3 and 4. Also see Social Security Administration, ]njimnalion Systems P/an, op. cit., footnote 17; Social Security Administration,

The S()(I(J/ .$eturily .$rrareg~c P/an: A Frcuncworkjor fhe Future (Baltimore, MD: September 1991); Social Security Administration, lmp/ementation of (he SLM Sfraregic Plan, op. cit., footnote I 7.
74 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

from the outside, persons to become in-house futurists and entrepreneurs; 2) organizing workshops,

retreats, and seminars for agency staff and outside

innovators to think openly about reengineering

SSA’s functions; and 3) providing incentives and

rewards for those who produce insightful, useful

applications of electronic service delivery. SSA is

beginning to move in these directions.

The current reengineering and service delivery

initiatives are more aggressive, risky, and innovative than prior SSA efforts.29 SSA will, however,

need to develop or acquire more expertise in integrated systems planning and technology assessment if these initiatives are to be fully successful.

The agency may need to reorganize to create anew

strategic planning process that is better staffed and

funded.

To develop a robust range of alternative futures

for SSA service delivery, the SSA planning process needs to:

1.

2.

3.

4.

5.

6.

analyze all elements of SSA’s services (including information, transactions, and money);

determine which elements are suitable for electronic delivery (taking into account current and

prospective customer readiness);

match these elements against the list of delivery technologies in Making Government Work

(including in-home/in-office, electronic kiosk,

one-stop service center, mobile delivery, electronic benefits transfer, and electronic transactions and commerce);

develop and analyze alternative institutional

arrangements, including strategic partnering

(see below);

identify and analyze the facilitators and barriers

to implementation of each alternative future or

scenario (e.g., training, equipment, public

laws);

assess the consequences of each scenario-at

least qualitatively—for service delivery stan7.

dards, customer satisfaction, employee morale

and productivity, and cost-effectiveness; and

develop descriptions, models, and pictures to

convey the essence of each scenario to management, employees, recipients, and policy makers.

SSA’s strategic and information systems plans

appear to satisfy traditional expectations for annual and 5-year agency Information Resources Management (IRM) plans. Expectations are changing,

however. In Making Government Work, OTA suggests that the Office of Management and Budget

redirect agency IRM planning along the lines outlined above for SSA.30

fi Strategic Partnering

Making Government Work concluded that a component of electronic delivery with high leverage is

the forging of strategic partnerships among federal, state, and local governments; user groups; and,

where appropriate, the private sector (including

not-for-profit, philanthropic, and voluntary as

well as commercial organizations) .3]

SSA is only in the earliest stages of conceptualizing and exploring strategic partnering. Partnering should offer several benefits. It should provide

a way for SSA and other federal and state agencies

to share the costs and risks of innovation in electronic delivery. Partnering should increase the

chances of success by encouraging better understanding of the needs of users and providers, and

stimulating creative thinking about new or improved service delivery strategies. Partnerships

could help SSA and sister agencies break through

or work around the bureaucratic and political inertia that often confronts new ideas for service delivery.

Effective partnering will require a true commitment from SSA and other agencies to aggressively

seek partnering opportunities and to make them

29 S& S(Xla] Security Administration, op. cit., fOOtnOte 7.

30 See OTA, op. cit., f~)tnote 2, pp. ] 5- ] 7, 21 ’22, 53, I 23-139.

j] Ibid., pp. 2, s, ]0, 17, 21, 45, 99, 102, 112, 115-121, 128.
—. .-

Chapter 5 Electronic Delivery of the Social Security Administration’s Services 75

work. A systematic exploration of SSA’s partnering possibilities should include:

1.

2.

3.

4.

5.

6.

7.

other agencies within HHS delivering similar

or related services (e.g., the Health Care Financing Administration, Administration on

Aging, and National Institute on Aging);

agencies from other departments delivering

similar or related services (e.g., in the Departments of Veterans Affairs, Housing and Urban

Development, and Education);

government-wide directory or gateway delivery services (e.g., one-stop shopping for federal

services via electronic kiosks, consolidated

federal field offices, federal “service extension” offices, electronic bulletin boards, and

electronic benefits transfer);

state or local social and health service agencies

that deliver similar or related services, or that

may already be involved to some extent in delivering SSA’s services;

consumer, community, senior citizen, educational, library, and related organizations that

could assist in delivering SSA’s services or in

facilitating electronic delivery;

foundations and other philanthropic organizations that could provide seed money or matching grants for innovations in electronic delivery

of SSA’s services; and

private commercial companies that make or

sell the electronic equipment, systems, and services needed for electronic delivery of SSA’s

services.

SSA initiatives in these areas would help implement the NPR’s recommendations to: strengthen partnerships in intergovernmental service delivery (federal/federal and federal/state); promote

effective, integrated, multiprogram service delivery within HHS; and develop integrated access to

government information and services.32

9 Pre-Operational Testing

In Making Government Work, OTA concluded

that pre-operational testing of electronic delivery

systems prior to full deployment is essential.33

SSA has long recognized the importance of such

testing, and has included a range of pilot tests and

demonstrations in its information systems plans.

In Making Government Work, OTA suggests

that both performance evaluation and policy analysis be required components of pre-operational

testing, and that these components be funded at a

minimum level of 5 percent each out of the relevant pre-operational testing budget. SSA has expended considerable sums on general technology

evaluation studies, many conducted by private

contractors. But SSA appears to have invested

comparatively little in performance evaluation

and policy analysis directly associated with preoperational testing of electronic delivery alternatives. Partly as a consequence, SSA has limited

ability to project the impacts (including benefits

and costs) of its automation initiatives.

Greater attention to performance evaluation of

pre-operational tests on the part of SSA would be

consistent with the NPR’s emphasis on agency

performance standards and measurement, and

with recently enacted legislation that requires federal agencies to establish clear goals against which

performance can be measured.34 The results of intensified performance evaluation activities would

help SSA to better understand, evaluate, select,

and justify alternative automation and service delivery strategies.

IMPROVING SSA SERVICE DELlVERY

SSA has prepared an impressive set of strategic

and information systems planning documents,

and an imposing array of pilot and implementation projects for the use of information technology

~Z Vice ~esldcnt Gore, op. cit., footnote ~, pp. I Q], 166~ ‘ 67”

M O-I-A, op. cit., footnote 2, pp. 17, 18, 128, 129-1 so.

N see the Govemnlen( Pefiomlance and Results Act of 1993, public Law 10~-62
76 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

to improve service delivery. Yet taken as a whole,

SSA’s service delivery planning to date has proceeded within relatively narrow planning horizons (not yet reflecting a reengineering perspective); with relatively conservative schedules

(stretching incrementally over many years); and

with poorly developed measures of, and little understanding of the impacts on, actual service performance. At a mid-level, service delivery planning seems to have covered many of the right

bases (e.g., improve the disability and appeals

processes, improve access to SSA services, establish electronic claims folders). But the planning to

date does not develop a good sense of the key leverage points or actions for improving SSA’s service delivery; nor does it consider the implications

of more fundamental changes in the way SSA is

organized and staffed for improving service delivery and the deployment of information technology.

SSA’s recent draft service delivery concept papers include some new thinking.35 But these are,

as SSA understands, only a start. Much more rigorous and complete analysis, presentation, and

discussion are needed. The next iterations of the

service delivery paper should more clearly describe, develop, and evaluate the range of scenarios considered. Service delivery planning also

should draw much tighter linkages between reengineering, service delivery, and technology testing and deployment.

SSA would need to increase resources and staffing to complete a service delivery plan—including a major electronic delivery component—with

acceptable quality and within a reasonable timeframe. Much of the groundwork has already been

completed in prior planning efforts, but needs to

be redirected. With the results of Making Government Work and related federal, state, and academic

studies, SSA should be able to expeditiously redirect and take at least a first cut at an overall plan.

The plan could, at a minimum, address the issues

highlighted in Making Government Work and topics discussed above, as well as relevant NPR and

NH recommendations. The plan could give detailed attention to the highly leveraged action

areas outlined below.

~ Full Use of Electronic Benefits Transfer

SSA could accelerate the testing and use of electronic benefits transfer (EBT) by its recipients.

About one-half of recipients still receive benefits

via paper checks. Checks are much more costly

and prone to fraud and theft compared with direct

electronic deposit of benefits. For this reason,

SSA is working to increase the voluntary use of

direct deposit. SSA also is collaborating with other federal agencies to test the use of EBT cards to

deliver benefits.

In Making Government Work, OTA concluded

that EBT cards offer significant potential for delivering a range of social services—including

SSA benefit payments. The Administration’s National Performance Review reached similar conelusions.36 EBT may be particularly well suited

for SSA recipients who qualify for Supplemental

Security Income and other means-tested social

services (e.g., food stamps; Aid to Families with

Dependent Children (AFDC); and the Special

Supplemental Food Program for Women, Infants,

and Children (WIC)). EBT also may be appropriate for SSA Title II recipients who do not have

bank accounts (and for whom direct deposit cannot be otherwise arranged).

SSA is participating in government-wide initiatives to plan and test a multiprogram EBT card

to electronically deliver federal services. EBT is

most likely to be cost-effective if it can be used for

multiple services and programs. Scaled-up feasibility tests and evaluations are needed prior to

full-scale deployment, as detailed in Making Government Work. SSA needs to be aggressive to ensure that its services are included in federally

sponsored feasibility testing.

~~ S(xla] security ,4dminismtion, op. cit., fOOtnOte 7.

~~ Vice ~esident Gore, op. cit., footnote ~, pp. 1 I ~- 1 I 4.
—— . .

Chapter 5 Electronic Delivery of the Social Security Administration's Services 77

Full SSA participation in EBT would help to

implement the NPR recommendations for a nationwide, integrated EBT system and for the integrated delivery of social and health-related services by HHS and other federal agencies .37 An

integrated EBT system that includes SSA, among

other, services also would help realize the NII vision because EBT must utilize the private sector’s

commercial infrastructure to be cost-effective.

I Leveling the SSA Workload

SSA should move aggressively to level its service

delivery workload as much as possible. SSA is

well aware that the waiting times for telephone responses and office visits are unsatisfactory during

peak activity periods. The NPR and SSA’s strategic and information system plans assign high

priority to improving these services. Telephone

calls and office visits peak shortly after Social Security checks are mailed (or electronically deposited) at the beginning of each month, frequently

due to questions stimulated by the payment

amounts. Few organizations can staff up to handle

peak loads such as this. Even if traffic is shifted

among the various SSA teleservice centers, telephone response times during peak periods are significantly longer.

Both SSA and the NPR recognize that one part

of the solution is to spread SSA payments

throughout the month.38 Payments could be sent

on the 1st or 15th of each month, for example, or

on the 1st, 10th, and 20th of each month. SSA recipients have resisted such changes, partly because of habit and partly because many recipients

depend on their SSA payments to pay bills due on

a standard monthly billing cycle. Direct deposit

and EBT cards greatly increase the flexibility of

the SSA payment schedule. The importance to

workload leveling is so great that renewed and

more vigorous SSA consideration appears warranted, even in the face of mixed reactions by consumers. Pilot-testing could provide an indication

of how many SSA recipients might voluntarily y accept an alternative payment schedule. SSA could

emulate the major credit card companies who

spread their billing cycles throughout the month,

yet are flexible enough to allow customers to

change their due dates to meet personal needs and

preferences.

Another part of the solution to uneven workloads is to provide alternative means for SSA recipients to obtain routine information. Electronic

delivery, for example, could meet the needs of recipients who are, or can become, comfortable with

the electronic media. Many types of routine inquiries about SSA services and procedures can, in

principle, be provided by electronic kiosks, electronic bulletin boards, and computer networks. If,

over time, an increasing percentage of routine inquiries can be handled without human intervention, then the telephone and office visit options

will be more readily accessible—with shorter wait

times—to recipients whose problems require personal attention.

Electronic delivery also should be extended to

the provision of earnings and benefits information. Public law requires that SSA begin providing this information annually to eligible persons

over the age of 60 starting in 1995, and to all eligible persons over the age of 25 in the year 2000.

SSA could explore using electronic dissemination

as a delivery mode. SSA is, of course, very sensitive to the privacy and security concerns involved

in electronically issuing earnings and benefit information. OTA believes, however, that electronic

options can be designed to assure an equivalent or

greater level of privacy and security protection

than is available for SSA information today.

Making Government Work, NPR, and NII all

conclude that SSA and other federal (and related

37 lbl~, Pp, I I ~. I I 4, 141, 166; and NPR Accompanying Report, op. cit., fo(~tn{)te 4

~~ ~e NpR recomn~~nds asslgnlng ne~ SSA ~~neficlaries a staggered payment schedule (selected from among three or f(mr different

dates).
78 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

state/local) agencies need to use a common information technology infrastructure to deliver

these kinds of electronic services. 39 Otherwise,

electronic delivery is likely to further complicate

the already confusing, cumbersome manner in

which governments organize and deliver many

services. Many of the potential economic benefits

of electronic delivery will not be realized if agencies like SSA fail to capitalize on opportunities to

develop economies of scale and scope through

partnerships among federal, state, and local agencies and the private sector.

1 Engaging the Electronic Delivery

Community

SSA’s strategic and information system plans refer to the use of kiosks, computer networks, electronic bulletin boards, and the like for electronic

delivery. But the levels of actual resource commitment and activity are low, and involvement with

the electronic delivery community in and outside

of the federal government is still limited. SSA recently has intensified its interest in electronic delivery in the context of developing an overall service delivery plan, but its thinking is still in the

formative stages.

Making Government Work and the Administration’s National Performance Review and National

Information Infrastructure planning documents

outline numerous federal and other electronic delivery activities and initiatives. SSA could be a

more active participant in this arena.

~ Enhancing Privacy Protection in

Electronic Delivery

Making Government Work concluded that electronic delivery of services that involve personal or

financial information will increase the risks to

personal privacy.40 The Social Security number

already has become a de facto national identifier.

NPR and SSA proposals to increase the use of

electronic technology for the collection, verification, exchange, and dissemination of personal information maintained in SSA computerized record systems raise legitimate privacy concerns, of

which SSA is well aware.

Widespread EBT would mean that SSA eligibility and payments information moves over a variety of electronic networks involving banks, retailers, clearinghouses, and the like, in addition to

the government agencies involved. Use of kiosks

and electronic filing to determine eligibility for

SSA benefits could cut red tape and costs, but

would create new opportunities for third-party

abuse of personal information. Computer networking, electronic kiosks. or interactive television, if used to request SSA services or personal

information maintained by SSA, create the potential to monitor citizens and increase the opportunities for “information brokers” to obtain personal

information through legal and illegal means.

In Making Government Work, OTA concluded

that the privacy risks are substantial enough to

warrant serious consideration of: 1 ) updating the

Privacy Act to reflect new technological risks and

opportunities; 2) extending the Privacy Act to

cover nonfederal systems that participate in electronic delivery of federal services; and 3) establishing an independent Privacy Protection Commission or Board to serve informational,

ombudsman, advocacy, investigative, and oversight functions concerning the privacy aspects of

electronic delivery.41

SSA has a long history of concern over privacy

issues. SSA could become more involved in the

current privacy protection debate, and take a lead

role in finding ways to use electronic delivery that

protect personal privacy. Both the NPR and NII

recognize that protecting personal privacy is a vital component of electronic delivery and the national information infrastructure. The NPR, for

39 See OTA, Op. cit., f(x)[nt)[e 2, esp. chs. 2, 3, 4, and 6. Also see the NPR Accompanying Repofl, op. cit., footnote 4.

m OTA, ~)p. cit., footnote” 2, pp. 4, 23, 54, 75, ] 43-1a.

41 ibid.
—.

Chapter 5 Electronic Delivery of the Social Security Administration’s Services 79

example, recommends that a Privacy Protection

Commission be established as part of its privacy

protection package.42

9 Engaging the SSA Labor Community

Making Government Work reaffirmed the finding

of prior OTA studies that, even with the best laid

plans and adequate funding, federal employees

will make or break the success of electronic delivery. Knowledgeable and committed employees

are essential. The history of government and corporate automation is replete with failures caused

in part by employees who are poorly trained, uninvolved, and sometimes even alienated or hostile.

OTA commissioned, in support of Making

Government Work, a case study on integrating information technology and service delivery at

SSA. This review concluded that impacts on the

agency’s labor force must be addressed from the

outset; labor must be included as a full partner at

all stages of SSA automation. Neglect or deferral

of labor implications and concerns+ specially

about job changes or losses-easily can result in

much greater costs and problems over the longer

term.

4 3

As SSA moves further into reengineering and

service delivery planning, it will be even more important to involve the SSA labor force and leadership as full partners-as recommended by the 44 Making Govern - NPR for all federal agencies.

ment Work and the NPR also emphasize the importance of employee and management training in

successful electronic delivery. 45 SSA has long

recognized the need for training, but a revamped

training program will need to include an emphasis

on: 1 ) assessing customer or client needs; 2) integrating customer perspectives and needs into electronic service delivery planning from the outset;

3) developing electronic delivery scenarios; 4) revising agency automation and information

technology programs to support electronic service

delivery; 5) designing electronic service as part of

integrated (intra- and interagency) delivery strategies; and 6) managing electronic delivery projects

under conditions of rapidly changing technologies and needs.46

I Revamping SSA Test Plans

and Schedules

SSA is moving ahead with IWS/LAN before the

reengineering and service delivery plans are completed. Thus, it is not in a position to fully understand, estimate, or analyze the impacts of IWS/

LAN on SSA operations and service delivery.

Alternative or supplemental testing approaches

may increase SSA’s understanding of the implications and impacts of IWS/LAN—alone and in

combination with other information technologies.

SSA could, for example, design a new set of pilot

tests that would mix and match various technologies and SSA activities. The objective could be to

more fully examine the potential of IWS/LAN and

other technologies for implementing current and

reengineered SSA functions by focusing on a

small number of representative SSA offices. Such

pilot tests might better identify the implications

for SSA service delivery and determine the extent

to which test results can be extrapolated to the

larger SSA organization and operations. Several

possible pilot tests are described below.

42 Vlcc ~csl~enl Gore, op. C1l., f(xltnote 3, p. 166; NPR Accompanying ReFJK OP. cil.! ‘(x)tnote 4“

43 John Haml$, A]an F, W’estln, andAnne L. Finger, “[innovations” for Federal Service: A Study t)f Innovative Techn(~l(Jgies for Fedeml GOvcmment Scrvlces to Older Americans and Consumers,” c{mtractor report prepared for the OffIce of Technology Assessment, February 1993;

and U.S. C(mgress, Office of Technology Assessment, The SocIa/ Security Adminisrra/ion and Injimnation Technology, OTA-CIT-3 I I (Washington, Dc U.S. G(J\ cmment Printing office, October 1986).

w Vice ~csldent G~we, op. cit., footnote 3, pp. 163-164.

45 lbld.

~ OTA, op. cit., footnote 2, p. I 33.
80 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

Integrated Electronic Records

SSA eventually wants to use an “electronic folder” for each SSA recipient that would replace the

current mix of several separate electronic files and

a variety of paper documents. To move this forward, SSA could select a small, representative

sample of SSA offices and test alternative approaches that could accelerate the development of

integrated electronic records. These records then

could be downloaded to the selected SSA district

and field offices (and state disability determination offices) over the IWS/LAN to test the actual

impacts on productivity, costs, and service delivery. Some or all of the test offices also could serve

as demonstration sites for hands-on evaluation of

technology applications and reengineering alternatives (e.g., decentralized recordkeeping).

SSA also could assign a higher priority to creating what amounts to “master SSA beneficiary records.” The NPR recommended that the Department of Veterans Affairs (VA) develop “master

veteran records” to consolidate information from

various databases into one integrated electronic

record system.

47 SSA faces a similar challenge.

Multiprogram Electronic Benefits Delivery

SSA could participate more aggressively in pilottesting EBT cards that could be used by a variety

of federal and state agencies responsible for delivering social and health services. Opportunities for

economies of scope and scale are considerable.

For example, almost half of SSI recipients also receive food stamps, and almost all SSI recipients

are on Medicaid. About a quarter and a third, respectively, of food stamp and Medicaid recipients

also receive OASI (Old Age and Survivors Insurance) benefits. About 60 percent of persons receiving VA benefits also have OASI income.48

These groupings collectively include many SSA

recipients without bank accounts for whom EBT

cards may be a better alternative than direct deposit. SSA could test the integration of IWS/LAN and

centralized computer systems with EBT. (See

Making Government Work for a discussion of the

range of EBT issues that must be resolved as part

of pilot testing and prior to full-scale deployment. 49)

Electronic Interagency Eligibility

Determination

Initial and continuing eligibility determination is

a critical problem area for SSA and other social

and health service agencies. For SSA, the Disability Insurance (DI) and Supplemental Security Income (SSI) Programs are medically and/or

means-tested, which necessitates periodic reviews to assure that recipients continue to be eligible. The estimated SSI error rate is about 3.5 percent, amounting to roughly three-quarters of a

billion dollars per year.

50 Errors include overpayments to eligible recipients or payments to ineligible recipients. The estimated error rate for food

stamp and AFDC benefits is about 6 percent—

roughly $2 billion to $3 billion per year.51

Part of the solution may be to periodically

check or consolidate a recipient’s income and

benefit information so that SSA (and other agencies) can determine eligibility more reliably. SSA

is taking some steps in this direction, but could

participate more aggressively in interagency pilot

projects with the Internal Revenue Service, Health

Care Financing Administration, Department of

Veterans Affairs, and Food and Nutrition Service

to test computer-matching and front-end verification techniques for a representative sample of recipients and/or offices. SSA also could test alter47 Vice PreS1&nt Gore, op. cit., footnote s, P. 152.

~ u s Conuress, H~WW c{~nlnli[tee tm Ways and Means, O~vr~ie\t ofEnri[/cnient Program%1992 Green Book, Cmnmittee print 102-44, . .

May 15, 1992, ~. 1611.

‘() OTA, i)p. cit., footnote” 2, ch. 4. Also see S. 1646, the F(x)d Stamp Fraud Reduction Act of 1993, NOV. 8, 1993.

~~ u s Congress, House C(mlnli(tee (m Ways and Means, op. cil., fo(’tn{)le 48.

. .

f 1 Ibid.
—.—. —

Chapter 5 Electronic Delivery of the Social Security Administration’s Services 81

native uses for the IWS/LAN in conducting and

accessing the results of matching and verification

activities. This would provide an opportunity to

use electronic data interchange (EDI) and integrated electronic kiosk-EBT systems more

aggressively, as discussed in Making Government

Work and advocated by the NPR.52 Privacy, security, and access issues should be simultaneously

addressed. (See Making Government Work and related OTA studies for discussion of privacy

protection.53)

Automated Disability Determination

SSA’s Disability Insurance Program is the most

difficult one to administer primarily because eligibility depends on initial and continuing determinations that a recipient meets medical standards

of disability. Lengthy delays result from the complexity and judgmental nature of medical evaluations, combined with extensive paperwork, the involvement of medical and health professionals, an

increasing caseload, and the high probability that

adverse decisions will be appealed. SSA fully understands that the current disability process is unacceptable, and has assigned high priority to developing and implementing a modernized

disability system (MDS).54 The SSA’s recently

established reengineering task force has given

first priority to reengineering the disability process, incorporating the MDS plans to the extent appropriate. The NPR, likewise, recommended that

SSA improve disability claims processing so that

decisions can be made quickly and accurately.55

The IWS/LAN is being introduced into state

and SSA disability offices before a fully automated disability determination office has been developed or tested. The IWS/LAN use, such as it is,

is well below its full potential capabilities. An alternative or supplemental pilot-testing approach

would be to select one or several offices and implement new technology fully. The selected offices would, for example, make maximum use of:

1 ) electronic data interchange for collection and

exchange of medical documents; 2) electronic recordkeeping for materials in each recipient’s file

(including use of electronic imaging of contextual

items); 3) computer networking for communication with medical examiners, administrative and

adjudicatory personnel, and recipients representatives and advocates; and 4) videoconferencing

for medical and administrative consultations and

proceedings. At a minimum, the pilot testing

could demonstrate and evaluate how a typical disability determination office would work, making

full use of applicable technologies, and how the

IWS/LAN can best be deployed. Test results also

should help SSA to estimate the overall impacts of

SSA automation on productivity, costs, and service delivery more accurately,

Electronic Bulletin Boards and

Computer Networks

SSA appears to have overlooked or underestimated the potential of electronic bulletin boards

and computer networks for delivering routine information about SSA services. These technologies might also be used to provide personal updates on a recipient’s relevant SSA records and/or

pending actions—if privacy and security issues

can be resolved. Making Government Work, the

NPR, and the NII all highlight the opportunities to

use computer networks for delivering services.56

SSA could accelerate pilot testing by using already existing government, not-for-profit, and

52 OTA, op. cit., ftxm)tc 2, pp. 5, 6, 41-42, 49-53; National Perfom~ance Review Accompanying Rep)rt, op. cit., foomt)tc” 4.

$3 u s Conorejj, ~fficc of Techno]()~y Assessn]ent, pro(e~.fln~ prl}’ac} In Cor?y?uleri:ed Medlca/ ~n,k~rnlali~~n. oTA-TCT-576 (Wra~}l ]n ~

-

. . . .

ton, DC: U.S. G~)vemnwnt Printing Office, September 1993).

~~ Sc, S(Xla] Securlo, Admln Istration, “M{xiemizcd Disability System,” n.d,

~~ Vlcc Presiden[ Gore, op. cit., footnote ~, p. I ~ 1.

56 OTA ~)p, c ,t. fo,)tnote” ~ ~sp, Chs. I -4. Na[l{}nal pc~omlance Rev ie~ Accompany ing Rcp)fi, op. cit., f(N)tnote 4: National ]nforrll:itlon”

Infrastructure Tash Force, f~p, cit., f(x)tn(~te 5. Also see Beasley, op. cit., footnote 10.
82 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

commercial bulletin boards and networks. Potential applications could be tested in a variety of settings—the recipient home, a local medical facility, a recipient representative’s office, a local

school or community college, and a community

recreational facility or senior center. SSA could

then evaluate the implications for IWS/LAN deployment.

User-Oriented Electronic Enhancements

SSA is well advised to conduct focus groups with

recipients and their representatives to identify

ways to improve existing electronic delivery (primarily the toll-free 800 and local office telephone

services). Their input also is needed to assure that

future electronic delivery methods are userfriendly. OTA-sponsored contract research has

identified a range of concerns and suggestions for:

1 ) improving SSA telephone response menus and

procedures; 2) clarifying and streamlining SSA

notices and bulletins; and 3) facilitating the access

of recipient representatives to case information

(including case status, schedule, records, and calculations, where applicable) .57

User-oriented improvements might also improve the morale of SSA employees and their attitudes toward recipients. To the extent that electronic delivery can help reduce the workload,

employees would be able to give more attention to

recipients who need human—not electronic—assistance. The implications for IWS/LAN may be

indirect, but nonetheless significant-such as enabling recipient representatives to connect electronically to a local or regional SSA office, or to an

SSA bulletin board, to check on case records and

status reports. Recipients and their representatives

should be directly involved in the design and implementation of SSA pilot tests, and in the development of SSA service delivery scenarios based

on these tests.

“One-Stop Shopping” Service Delivery

Both Making Government Work and the NPR emphasize the potential of information technology to

support integrated delivery of government services at real or “virtual” one-stop offices.58 The

NPR has, in addition, recommended both a government-wide and HHS-specific review and consolidation of agency field offices. SSA needs to

assure that: 1 ) appropriate SSA services are offered by the integrated or one-stop service delivery centers that may emerge; and 2) the existing

SSA field offices are utilized to the extent appropriate. SSA has one of the largest field office

structures (along with the Extension Service and

other components of the Department of Agriculture, itself recommended for major reorganization; the Departments of Housing and Urban Development, Labor, and Commerce; and the U.S.

Postal Service. among others). Some SSA services no doubt could be offered via electronic

kiosks and computer terminals located at federal

integrated service centers, and some other federal

agency services could be offered at SSA field offices. Also, some federal one-stop service delivery programs could be colocated with their statelocal counterparts. The numerous possibilities

and scenarios, and the implications for IWS/LAN

deployment, have only begun to be considered by

SSA, HHS, and the Administration. The SSA service delivery concept papers provide a useful, but

very preliminary, start.59

57 see pmem in Enterprise, OP cit., footnote 11; Shor, op. cit., footnote 10.

58 ol-A, op. Cit., f(x)tnote 2, esp. ch. 2; National Performance Review Accompanying Report, op. cit., footnote 4.

S9 S(xia] Security ,4~miniqration, op. Cit., f(N)tnote 7.
I ndex

A

Agency Strategic Plan, 3, 8, 11, 12, 17, 19,24,32,

40,41-42,44,57

Aging population, 35-36

Alternative SSA futures, 73-74

Appropriation fiscal year 1994,3, 8,9, 10, 17,23,

60

Appropriation fiscal year 1995,3,23,25,26,27,28

Appropriation fiscal year 1996,3,26,27

Appropriation fiscal year 1996-98,3,27

Automation Investment Fund, 6,7, 8, 15, 17,23,60,

64,65

B

Beneficiaries. See Recipients

Budget set-asides, 16,70-71

Bulletin boards. See Electronic bulletin boards

c

Clearinghouses, 72

Clients. See Recipients

Committee on Appropriations, House, 8,9, 10,23

Committee on Appropriations, Senate, 9

Community infrastructure, 16,24,27,71-72

Computer networks, 16, 17,22,73,78,81-82

Computer system, SSA’s existing, 55-56

Computer technology trends, 53-55

Congressional policy options. See Policy options

Continuing disability reviews, 32-33

Cost-benefit analysis, 2, 17, 19,20,63-64

Customer participation. See Recipients

D

Demographic changes, 35-36

Directories. See Electronic directories to services

Disability backlog, 1,6,31,32-33,66

Disability determination, automated, 16,24,26,56,

81. See also Modernized Disability System

Disability Determination Service, 2, 14,20-22,31,

33

Disability Insurance Program, 1,6,29,30-31

Disability reengineering, See Reengineering

E

Electronic benefits transfer, 16, 17,22,76-77,78,

80

Electronic bulletin boards, 16, 17,22,73,81-82

Electronic data interchange, 16, 81

Electronic delivery community, 78

Electronic delivery of services, 2, 15,22,69-82

Electronic directories to services, 16, 73

Electronic interagency eligibility determination, 16,

80

Electronic kiosks, 17,22

F

Facilities planning, 41,48

Findings, 2, 10

G

General Accounting Office, 5,7, 8, 10, 11, 12, 13,

14, 17,20,23,24,26,28,34, 39,40,41,42,43,

44,49,50,51,56,64,66, 67,68

Grassroots involvement, 16,24,27,70-71

H

Human Resources Plan, 12, 40,41,47-48

I

Information Systems Plan, 11, 12,40, 41,42,43-47,

57,62

Innovation, encouraging, 16,72-73

Innovation fund, 72

Integrated electronic records, 16,80

Integrated services centers, 43

Intelligent workstation. See IWS/LAN

IWS/LAN

as infrastructure, 2, 13, 15, 64-65

costs and schedules, 20, 60-61, 63-64

deployment, 17,22.68

development, 59-60

documentation, 10, 14-17

flexibility, 44,57,62-63

hardware, 57-58

justifications, 63-68
84 I The Social Security Administration’s Decentralized Computer Strategy: Issues and Options

measuring and tracking results, 17-20

procurement, 3,23-24

rationale for use, 14-17

risks, 62

software, 57,58-59

technologies, 10, 11,53-68

Technology Program, 1,2,7, 10, 13,21

transition, 2, 56, 61-62

J

Joint SSA-state review team, 2,22

K

Kiosks. See Electronic kiosks

L

Labor participation, 1, 13,45,79

Local area network. See IWS/LAN

M

Master Plan 1975,36

Modernized Disability System, 3, 15,21,22,25,50,

59,61,64

Modified IWS/LAN procurement, 24-25

N

National Academy of Sciences, 59,61,66

National Computer Center, 11,20,30,53,55,60,62

National Information Infrastructure, 70,71,73,76,

77,78,81

National Performance Review, 5,8, 13,69,71,73,

75,76,77,78,81,82

National Research Council, 7, 12,44

Networks. See Computer networks

o

Office of Technology Assessment reports, 8, 11, 15,

17,69

Office of Technology Assessment’s success factors,

15,24,26,69,70-75

Old Age and Survivors Insurance, 29,30

One-stop shopping, 16,82

P

Partnering. See Strategic partnering

Performance evaluation, 17,20,24,26,75

Personal benefit statements, 36

Pilot testing, 16,22,24,26,27,72,79

Planning, comprehensive, 41

Planning process, 39-51,74

Policy options, 2-3,23-28

Pre-operational testing, 22,75

Privacy protection, 78-79

Procurement IWS/LAN. See IWS/LAN

Public interest groups, 43,70-71

R

Recipients, 1, 13, 16,33-36,40,43,70-76, 82

Reengineering, 7, 14, 15,20,22,23,24,25,26, 41,

43,48-50,65-66,72

Reengineering Task Force, 2,3, 14,21,33,48-50,66

s

SeniorNet, 71

Service delivery challenges, 31-36

Service delivery goals, 37,42,66-68

Service delivery plan, 2,3,8, 11-14, 15, 19,20,23,

24, 25, 26, 40, 41, 42-43, 75-82. See also Electronic delivery of services

SSANet, 56-57,58

Staffing levels, 1,6,20,24,26,31-32,45

State disability determination process. See Disability determination

Strategic partnering, 16,74-75

Strategic Plan. See Agency Strategic Plan

Strategic priorities, 42

Success factors. See Office of Technology success

factors

Supplemental Security Income Program, 6,29,31,

56

Systems Modernization Plan, 6,40,45,55,56

Systems Plans, 41,42,53-61

T

Technology Program. See IWS/LAN technology

program

Technology trends. See Computer technology trends

Telephone service. See Toll-free numbers

Teleservice. See Toll-free numbers

Toll-free numbers, 1,6, 16,33-35,58,73

Total quality management, 48-50

Tracking results. See IWS/LAN, measuring and

tracking results

Training, 7,20,45,63,79

Transition. See IWS/LAN transition

u

Unified Planning System, 42

Unions. See Labor

United Kingdom’s Department of Social Security, 46

w

Workload, 1,6, 29-37,77-78

Workstation. See IWS/LAN