Over the past two years, many state and local governments have had to accelerate digital transformation to support their citizens. As more people required assistance—often remotely—governments simply couldn’t keep up with demand due to legacy systems and processes holding them back.

Case study: Wisconsin Department of Workforce Development

The State of Wisconsin had a surge in unemployment claims starting in the first half of 2020. By October 2020, more than 78,000 people were caught in a months-long backlog. (1) The state’s first step was to hire more people to process claims, but their bigger issue was a 50-year-old COBOL mainframe that served as the backbone for processing. Citizens requesting unemployment benefits had to mail or fax paperwork. Many couldn’t reach the Department of Workforce Development’s (DWD) call center, which had to shut down at 6pm each night so the mainframe could begin processing claims. (2) The process was also error-prone, leading to millions of dollars in overpaid benefits while hundreds of thousands of claims piled up. (3)

To address these compounding issues, the state started modernization efforts in 2021, updating the online claims portal to accept document uploads to speed up the application process. The application itself was also a problem. Google Cloud AI tools were used to identify which questions caused the most problems for applicants. The form was then updated to simplify language and help applicants supply the correct information from the start. AI was also employed to help identify fraudulent claims, which were further slowing things down for the department. Two months after implementing modern technology solutions, DWD announced the backlog was cleared, and the standard 21-day service level agreement (SLA) for claims processing was back in place.

The next phase of modernization will involve replacing the 50-year-old mainframe. Updating it will not only make claims processing more efficient, but it will also make training DWD staff easier as the updated system will offer a newer and more intuitive UI. Future plans also include adding chatbots and virtual agents to better assist citizens at all hours. (4)

Even if the story isn’t identical, this situation of an inability to scale legacy systems and processes happens to be quite common. State and local governments have faced similar issues across the country, as legacy systems prevent them from offering efficient digital services. And while the pandemic made the acceleration of digital transformation a necessity, 80% of government officials surveyed by Deloitte still believe digital efforts haven’t gone far enough. (5)

How legacy technology is holding you back

A recent study from MeriTalk found that 96% of state and local government IT decision-makers felt critical infrastructures are at risk due to legacy applications or systems, and 87% said legacy applications prevent them from delivering modern services. (6) As illustrated by the Wisconsin DWD, many state and local agencies are dealing with decades-old technology that limits what they can do.

Finding qualified staff to update or maintain legacy systems is also a considerable challenge. The hiring pool is shrinking rapidly for the many agencies still running decades-old COBOL systems, and qualified consultants are limited and expensive. State CIOs are already struggling to hire and retain workers, balancing employee burnout and hybrid work. (7) Modernization will expand the number of eligible applicants by shifting to more common skillsets. In addition, training customer-facing employees to use older systems can be slow when trying to ramp up services to meet demands.

Interoperability between old and new technologies is imperfect. 47% of state and local government IT teams had a project fail in the last 12 months because their legacy systems couldn’t support it. (8) When these systems were first designed, no one knew just how digital the world would become. Mobile devices now account for more than 55% of internet traffic, (9) and the systems built decades ago are definitely not mobile-first applications.

Cybersecurity is another reason to modernize. 57% of state CIOs said ransomware is their top security concern. (10)Legacy systems are often long past their end of support, and securing them can be both difficult and disruptive. They’re not as easily backed up, don’t always get security patches for critical vulnerabilities, and generally create a greater risk of data loss in the event of a security incident versus immutable cloud workloads.

Cost is yet another hindrance. Legacy hardware and expensive consultants for antiquated programming languages are eating up budgets that could otherwise go to improving services and infrastructure. Trying to link new and old systems also results in costs for custom integrations that must be maintained or, worse, manual connections that require headcount. Trying to keep them patched or finding other means of process and controls to protect them from compromise also wastes precious time.

Trends driving government IT modernization

In addition to cost savings, improved security, and a broader hiring pool, there are other great reasons to modernize your legacy IT systems. Modernization can enable greater efficiency, easier hiring, and improved flexibility.

Citizen experience is a key focus of modernization efforts. More agencies are eschewing in-person requests and paper forms for digital, creating citizen experiences that are more like consumer ones. The desire to create a better online experience for citizens was by far the biggest driver for expanding digital services, according to the National Association of State Chief Information Officers (NASCIO) 2021 State CIO Survey. (11) 

NASCIO also found that state CIOs believe low-code/no-code will be the top emerging technology in the next 3-5 years. This is a vast shift from legacy coding languages and will allow agencies to deliver new solutions rapidly. It also opens development up to non-coders, meaning more people can contribute to the creation of new solutions.

Many government agencies currently have a wealth of data they cannot use. It’s stored in multiple, incompatible systems, making analysis impractical. But moving that history to a modern platform means the ever-increasing volumes of data generated by staff and citizens can be analyzed by artificial intelligence tools or used to train machine learning, enabling new insights and capabilities. These new findings could improve services for the citizens and reduce costs associated with providing them.

Finally, state and local governments are embracing the cloud to move quickly when needed. 92% of state and local government IT decision-makers have new cloud investments planned for 2022. (12)  Along with low-code/no-code as a key objective, cloud platform programs allow them to not just create new solutions but scale them rapidly, giving them speed and flexibility to adapt to changing conditions.

Whether you’re looking to rehost, replatform, refactor or rebuild your systems from scratch, Taos, an IBM Company, has the expertise to modernize your legacy systems. Improve your data availability, flexibility, and cybersecurity with Advisory Services, Professional Services, Managed IT, and Security Services.

Learn more at: https://www.taos.com/industries/government-state-and-local/


1 – ‘It’s been truly horrible’: Wisconsinites still caught in unemployment backlog wonder when they’ll receive payments, Milwaukee Journal Sentinel, October 2020

2Google’s AI helped Wisconsin clear unemployment backlog, StateScoop, August 2021

3Modernization Efforts Are Moving Forward For Wisconsin’s Outdated Unemployment System, Wisconsin Public Radio, September 2021

4Modernization Efforts Are Moving Forward For Wisconsin’s Outdated Unemployment System, Wisconsin Public Radio, September 2021

5Seven pivots for government’s digital transformation, Deloitte Insights, May 2021

6Modernizing State and Local Legacy Applications with Cloud, MeriTalk, April 2022

7How some state CIOs are fighting burnout, StateScoop, May 2022

8Modernizing State and Local Legacy Applications with Cloud, MeriTalk, April 2022

9Mobile Vs. Desktop Internet Usage, Broadbandsearch.net, January 2022

10 – Driving Digital Acceleration: The 2021 State CIO Survey, NASCIO, October 2021

11 – Driving Digital Acceleration: The 2021 State CIO Survey, NASCIO, October 2021

12 – Modernizing State and Local Legacy Applications with Cloud, MeriTalk, April 2022