Technology acquisition and implementation: learning the hard way.

• Author: Richter, Marsha D.

Viewing technology as an enabler rather than letting it define the work process was the key to success for the Los Angeles County Employees Retirement Association.

In an era of diminishing fiscal resources, the concepts of doing more and doing the "more" better but doing it with fewer resources have become the marching orders for public-sector organizations. The public sector has been told to reinvent itself using private-sector methods as the blueprint. Through this reinvention, governmental agencies are expected to operate more cost effectively while concentrating on meeting the demands of their citizen customers. At the same time, the citizen customers expect the same fast, customized service that is becoming the norm in private-sector service organizations.

Technology and Workload

At every level of government, public officials wrestle with the dilemma of reconciling these seemingly contradictory goals. How can service be improved and more cases handled by fewer employees? How can government services be reconstituted to meet constituent needs when budgets are being continually reduced? Increasingly, information technology is being identified as the panacea that will allow a reconciliation of these conflicting goals. The improvements and efficiencies promised by information technology, however, are often not achieved when the new technologies are implemented.

The pressure for accomplishing more through the acquisition and implementation of sophisticated information technology is as common to the management of public pension systems as it is for any other sector of government. It is the purpose of this article to describe some of the problems that have been encountered as technology has been applied to improve pension plan administration and to suggest methods of selecting and implementing new technology that will achieve desirable outcomes.

In public pension systems today, workload is rapidly escalating due to a number of factors. As plan sponsors downsize, public retirement systems must respond to increased retirements caused by early retirement incentive programs. Laid-off employees want information on their retirement benefits: Are they vested? When can they receive benefits? Are the retirement contributions refundable? What about rollovers?

As the wave of baby boomers approaching retirement age grows larger, more members are becoming interested in their potential retirement benefits. They want to purchase retirement credit for service with other governmental employers. They request estimates of potential retirement benefits and ask advice on financial planning, taxes, wills, Social Security, and health care. Members who have become accustomed to service improvements in banking and other financial services expect similar responsiveness from their retirement plan.

As a result of these demographic and economic factors, the workloads of public retirement plans are increasing. The work itself has always been difficult: the benefit calculations are complex and subject to frequent statutory change. Members may have many periods of service subject to different benefit tiers. They may be entitled to purchase credit for service with other governmental employers. Former members may be reemployed and have the right to restore their accounts through redeposits of contributions.

Consequently, voluminous files recording pay rates, earnings, service, contributions, and interest rates must be maintained on every current member. Even the records of former members must be retained if the plan provides for the restoration of accounts when a former member is reemployed. With the elimination of mandatory retirement, retention of these files may extend for more than 50 years.

Due to these common requirements, the amount of information that public retirement systems must accumulate for each member and then store in some kind of retrieval system can be monumental in size. Moreover, gathering this information, ensuring its accurate storage, and retrieving it to determine benefit eligibility and amounts are the Herculean tasks common to public retirement plans. The search for cost-effective methods to accomplish these tasks has largely dominated pension administration for more than 25 years.

The large amounts of information that must be stored and manipulated to determine benefit eligibility and amounts have caused pension plan administrators to focus on information technology as the means to achieve productivity improvements. These technology initiatives have been accompanied by expectations that work will be simplified and therefore completed faster. It also is expected that responses to the service requests of members will be processed faster and that they will be consistent and accurate. Finally, these expectations include a belief that automated processing will allow more work to be completed by fewer workers.

Unfortunately, the expectation of significant productivity improvement may not be realized when the new technology is implemented. Frequently, the new technology seems to add new tasks to the old jobs: the work seems more complicated because it now includes a new layer of procedures for using the new information system. The new system produces vast quantities of new information but does not necessarily indicate which pieces of new information are actually important. Employees see more work and more complexity and resist switching over to the new system. Work can be accomplished faster, but productivity still does not improve, and the old causes of inefficiency still seem to apply.

Selection, Application, Training

Technology's failure to produce expected work improvements generally can be traced to the way in which a particular technology was selected and applied. Today, technology is commonly described as an "enabler." That is an important description which points the way toward more effective uses of technology. As an enabler, technology allows something to be accomplished. Technology does not define what that...