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Why states are modernizing unemployment insurance (UI) systems with the cloud

As part of our concerted effort to deliver the vertically specific solutions state and local governments need, we work with industry leaders like Sagitec. I originally met David Minkkinen, Sagitec’s Senior Partner, about three years ago and was thrilled to catch up with him recently on how Sagitec is helping states modernize their unemployment insurance (UI) systems.

Many states seem to be modernizing their UI solutions. What’s driving that activity?

Our clients typically come from primarily paper-based legacy processes that are on a mainframe. It’s very costly to maintain a mainframe system and it’s difficult and time consuming for states to respond to frequent changes in UI federal policy with these rigid legacy systems. So they’re modernizing to reduce costs and be able to more quickly respond to policy changes. They also want to deliver better service to their constituents—which include employers, third-party administrators, and claimants—who expect efficient, online services.

How is Sagitec helping those states?

We offer states a modern technology solution called NeosuranceTM, which is an unemployment insurance, tax, benefits and appeals system. It’s a comprehensive, integrated system, which is critical because the tax and benefits systems share a lot of data. So it provides the customer with better data integrity.

It includes self-service portals for claimants, employers, third-party administrators, and UI agency staff. Each portal is tailored for the particular requirements of each of those constituencies.

NeosuranceTM also offers a very flexible architecture so states can quickly adapt the solution to State and Federal policy updates.

And because it’s on the Microsoft Azure Government cloud, states benefit from a proven and flexible solution that minimizes datacenter investments and helps them meet their requirements for security, compliance, and oversight.

Sagitec recently completed the South Carolina UI modernization. Tell us about that project.

South Carolina wanted a modern, cloud-based UI Tax system to replace its legacy tax system. The state wanted the new system to integrate with its UI benefits system so that UI business processes could be streamlined and overall data integrity improved. And they had a big emphasis on enabling self-service for their constituencies.

We helped South Carolina accomplish all of its objectives with tremendous success. In the first quarter, the state’s new system—which is on Microsoft Azure Government—was used, it achieved:

  • A 97 percent self-service adoption rate for employer wage reporting, significantly reducing paper-based wage filings.
  • A 98 percent self-service adoption rate for employer registrations.
  • An 86 percent self-service adoption rate for employer account updates.
  • Over 90 percent of tax payments were processed using electronic payment processes—virtually eliminating paper checks in the first quarter of implementation.

Since employers and third party administrators can do most of their own account management using the self-service portals, it frees up South Carolina’s staff to focus on more strategic, value-added activities.

Why is the cloud especially helpful for UI systems?

One of the big reasons is because the demand fluctuations on UI systems are huge. Our clients benefit greatly by being able to scale and pay as they go for cloud computing.

On the tax side, in the last few weeks of a quarter, there’s a significant uptick in demand as employers and third party administrators submit wages and tax payments—and the rest of the quarter is pretty quiet. And on the benefits side, claimants typically file at the beginning of the week—with very few claims the rest of the week.

So it’s much more cost effective for our clients to be able to scale computing capacity up or down based on demand fluctuation versus building out an infrastructure to peak capacity when they’d only use 20 percent of it most of the time.

How can people learn more about Sagitec’s offerings?

Check out www.sagitec.som, and download the Sagitec white paper, or contact Sagitec directly.  Learn more about Microsoft Azure Government, or contact Microsoft.