Ann All spoke with Paul Alpaugh, director of the Department of Public Welfare's unemployment compensation program for the Commonwealth of Pennsylvania's Department of the Treasury. The department received one of the Enterprise Content Management (ECM) Association's annual Best Practice awards for 2006, given to recognize excellence in the field of ECM.
All: What business problem was the department trying to solve with an enterprise content management solution?
Alpaugh: The Department of Public Welfare (DPW) disperses payments for three programs: unemployment compensation, state worker insurance and state supplementary payments (SSP). The award recognized the use of an ECM system for the SSP program. Prior to adopting an ECM system for SSP, the department was using the same system for the other two programs. We were looking for a way to more efficiently manage the huge amounts of data involved in the programs. For instance, there are 7 million annual payments - paper checks and direct deposits - for unemployment compensation; that's a $2 billion annual dispersement.
Prior to January of 2005, the dispersement function was outsourced to the Social Security Administration. Over time, the amount they charged us to handle this increased. It was $7 to $8 per dispersement when we first began using the ECM system in 2001, and now it's over $9. With 270,000 eligible recipients, that really adds up. So by taking over that function, we could save the department money.
All: What criteria were used to evaluate potential solutions?
Alpaugh: We went with an OnBase system, the same one we use to manage the other two programs. We knew from experience that it could be modified with relative ease and that we could implement the solution within the desired six-month time frame. The DPW has facilities in each of Pennsylvania's 67 counties, and each one has multiple users. All told, there are in excess of 6,000 users in more than 100 offices. It was important for those users to be able to access the system, and also for multiple offices within the Department of the Treasury to access it as well.
Another key was the system's ability to integrate with the DPW's ancient mainframe system. We knew the OnBase system could be modified to satisfy the limitations of the mainframe. Trying to migrate from the mainframe in the desired time frame would likely have been catastrophic.
All: What benefits resulted from the solution?
Alpaugh: The cost savings to the DPW are considerable. The average cost per dispersement for the SSA to administer the program for us is $9.08. Using the system, our average cost is about 88 cents per dispersement. The total cost of the system was about $1.2 million. We actually achieved ROI in the first month we used the system, at or around the 140,000th dispersement we administered (of 275,000 total monthly dispersements). We estimate that the system will save the commonwealth $25 million a year.
With the OnBase system, all of the offices I mentioned gain real-time access to payment information, which eliminates a lot of the phone calls, faxes and carrying of paper back and forth that used to be necessary.