It’s time to modernize state unemployment benefits: Part 2

In our last article, we shared 3 significant post-pandemic findings highlighting the vulnerabilities and lack of scale of many state unemployment benefit systems. And, with economic experts predicting another recession soon, it’s important for states to evaluate their current systems and strategize a path towards modernization.

Our government financial experts have encountered and reviewed other government modernization efforts. Before you plan your modernization strategy, consider the 4 most common modernization obstacles and learn how to overcome them.

What we can learn from other state modernization experiences

Modernizing government legacy systems that support critical citizen services such as state unemployment benefits is not an easy journey. Many states that have taken steps to modernize their unemployment benefit systems have faced many challenges. Listed below are four of the most common modernization obstacles and ways to overcome them.

1. Over-budget: Research has found that many state modernization projects have been delivered over-budget. Common factors that contribute to over-budget deliveries are poorly defined requirements/vision and over-engineering core user interface (UI) processes to meet existing process standards.
   To help prevent over-budget delivery, set clearly defined requirements by partnering with experienced vendors who’ve seen clients experience these pitfalls.
2. Missed launch windows: Related to over-budget deliveries, missed launch windows, or delayed lead times can also be caused by poorly defined requirements/vision. Also, the UI modernization industry is niche, and as a result, many vendors cannot scale resources to accommodate growing project demands associated with increased United States Department of Labor funding.
   Partnering with vendors with quick access to labor resources to meet the scale required is key to avoiding long lead times and delayed project start dates.
3. Data conversion: Data integrity is always a common obstacle in UI modernization projects. Common in the public sector, legacy application development and maintenance, infrastructure additions, and band-aid fixes over 30-40 years have deteriorated data integrity and sometimes overwritten data.
   The solution is to focus on the data first. At the beginning of the modernization project, data cleansing and structuring must be completed before the implementation phase.
4. Security issues: The pandemic resulted in a historic increase in state unemployment benefits claims. As a result, fraudulent attempts within state unemployment systems grew rampant. Security, validation, and authentication of claimant/employer data were the number one issues that required state attention. Unfortunately, this meant that states were taking reactive action against cyber threats. To mitigate risk, a proactive strategy implemented at the start of a modernization project is vital to long-term data safety.

A proven, established modernization model is required for success

Of the states that had conducted unemployment benefits system modernization projects between 2001 and 2016, 26% of projects had failed and been discarded, 38% were past due, over budget, or lacking critical features and requirements, and 13% were still in progress.¹ To avoid being a part of the 77% that experienced issues during their modernization journey, it’s highly recommended to find a partner that you can trust.

CAI has experience supporting modernization projects for many state and local governments. Based on lessons learned and accomplishments, we’ve developed a proven formula for successfully transitioning outdated, legacy applications to the latest technologies. CAI has experience helping state departments of finance and labor modernize large-scale, critical systems to better enhance their citizen service. Arrange a meeting with our public sector finance teams to learn more about our proven transformation model and it can be optimized for your agency’s needs.