eGovernment for Development

Success/Failure Case Study No.18

Pension Payment and Contribution Collection System in the Former USSR

Case Study Author

Werner Willeke (wkwilleke@web.de)

Application

This was a pension payment and contribution collecting system, implemented in a Pension Fund in the former USSR. The Pension Fund is the national agency of pension security, and falls under the Ministry of Social Welfare The hardware involved was Intel-based PC workstations and servers; the software used was Windows 95 and Windows NT with MS Access as the database. The system is a combination of MIS (management information and forecast system), and pension payment and contribution collection system with a central database that is updated daily via modem connections. The system enhances and partly replaces an existing basic computerised system.

Application Description

The Pension Fund is equipped with a central pensioner database which stores all relevant data for pension payment and contribution collection. Local Pension Fund branches exchange data with the central server daily and get the daily updated results via modem connection in order to issue pension payments. If one of the branches is unable to connect directly to the central server it sends and receives data via a neighbouring branch office. The system makes relevant electronic pension information accessible in all branches of the Pension Fund.

The system was developed as an initiative from the Ministry of Social Welfare and the Pension Fund with early and intensive involvement of Pension Fund staff. The system development and implementation process was divided into four steps:

1. The deficits of the existing system were evaluated. For this purpose extensive interviews were held in branch offices. Day-to-day work was analysed and a long list of features for the upcoming system was compiled.
2. The list of desired features was separated into A-B-C criteria (A as most important, C as least) and the time schedule for development of A-criteria features was agreed with the Ministry and the Fund.
3. The data entry schedule and the training schedule was developed and agreed with the Fund.
4. Data entry was organised and provided for all branch offices. Paper files were delivered and training for all branches started using a rapidly-prototyped system. The ideas and recommendations from the training participants were incorporated into development of the final system since the software trainers were at the same time working in the software development institute.

Application Purpose

The purpose of the application was to improve the existing pension calculation software and to develop additional software packages for the IT-based management of the 49 regional branch offices of the Pension Fund.

Stakeholders

The main stakeholders affected by this application are the Ministry of Social Welfare and the Pension Fund which save money by avoiding payment of pensions to pensioners who do not exist. Second stakeholders are the pensioners whose information is transferred faster so that they can receive their pension without big delays.

Impact: Costs and Benefits

The project has increased the efficiency of the Pension Fund as well as the Ministry of Social Welfare. The data for the pensioner database was reviewed and incorrect data was corrected. This saved money related to payment of pensioners who were not entitled to receive a pension (amounting to some 30,000 pensioners in all). This has brought savings of about US$150,000 per month. As data transfer between the central database and the branches is made on a daily bases, so data are accurate within 24 hours. Forecast of pension payments is enhanced. This allows the Pension Fund and the Ministry of Social Welfare to plan their budgets more exactly. System maintenance and adaptation to new requirements is easy as the system was developed by an experienced local institute using a standard PC database package.

Evaluation: Failure or Success?

The system can be evaluated as largely successful, though some initial goals were not yet met. The project has been completed on time.

Enablers/Critical Success Factors

1. Strong participation and prototyping . Relevant groups, including local Pension Fund staff, were extensively involved in development of the project objectives, in software development, and in system implementation. Together with the use of prototyping and permanent, regular communication between all stakeholders, this has brought about strong commitment to project success.
2. Regular internal monitoring of project progress .
3. High-level champions . These were found in the Ministry, the Fund, and the local institute that developed the software.

Constraints/Challenges

1. Hidden institutional agendas . At the start of the project, some of the institutions involved had hidden agendas, e.g. to get heavy involvement of their own people in the project.
2. Overambitious goals . Some of the goals set were too broad and too high: for example that there would be 24-hour access to the central database for local branches, or that a unique ID number with hard-coded cards would be made available.

Recommendations

1. Focus on affordable, feasible solutions . The information needs of the institutions involved should be thoroughly assessed. During this process it is in most cases obvious that there is a big difference between those things which are truly necessary and those which people want having seen somewhere else, especially on the Internet. Solutions based on the latter may not be affordable on the long run. Sustainability of e-government initiatives that are begun with the help of foreign donors depends in the future on costs which the institution will have to pay out of its own budget. Sustainability will only be achieved by focusing on true and affordable needs, not on 'bells and whistles'.
2. Communicate during the whole project lifecycle . Permanent communication and development of good relationships between the stakeholders, the project team and the software developers is essential. Although this seems to be common sense, it is not always practice. Hidden agendas of people or groups involved lead to political conflicts which in the end can lead to project failure. Clear distribution of roles and responsibilities can help avoid hidden agendas and the political infights which can paralyse an e-government initiative.
3. Train users early via prototypes . Early training efforts using rapidly-prototyped versions can make weaknesses of the system obvious at a stage where changes and modifications take less time than after making a system final and then handing it over to end users.

Further Information

wkwilleke@web.de

Case Details

Author Data Sources/Role : Project Consulting Role.
Outcome : Largely Successful. Reform : eAdministration (managing process performance).
Sector : Social Services (Social Security).
Region : Eastern Europe. Start Date : 1998. Submission Date : August 2002