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Idaho’s data is moving off the mainframe

The Idaho Department of Health and Welfare is housed in the Joe R. Williams office building, shown here. Photo by Anne Wallace Allen

The state’s mainframe computer is housed in the Joe R. Williams office building, shown here. Photo by Anne Wallace Allen.

Want a slightly used mainframe? Cheap? In a few years, Idaho might have one for you.

The payroll system, used by state agencies, was installed on the mainframe in 1987 and the accounting installed in 1988, with the mainframe itself installed around 1971. Consequently, it made sense for the office to provide mainframe computing services to other state agencies too, said Tamara Shipman, deputy state controller and administrator of the computer service center. “Agencies that interfaced into the payroll and accounting system had to get their data here somehow,” she said. “All the state agencies had to have some sort of presence on the mainframe.”

photo of joshua whitworth

Joshua Whitworth. Photo by Sharon Fisher.

But as agencies such as the Department of Health and Welfare (see box), Department of Labor (see box) and Department of Transportation (see box) have migrated off the mainframe to other solutions, the Controller’s office is taking the same steps, with the goal to migrate off the mainframe in six years, said Joshua Whitworth, chief deputy state controller. Alternatives include an on-premise solution, a cloud-based solution, or a combination or hybrid solution, he said.

The department issued a request for information in 2017 and received six responses, Whitworth said. The next step will be to issue a Request for Proposal; not all RFI respondents may submit proposals, he noted. The project, budgeted to cost $102 million, has been approved by lawmakers.

Part of the incentive for moving off the mainframe is the “death spiral,” Whitworth said. As mainframe costs rise and the cost of alternatives drops, more groups migrate, but that doesn’t lessen costs – just spreads them among fewer groups, meaning costs rise faster and causing groups to find alternatives even more quickly.

The issue isn’t the mainframe hardware itself, which has been upgraded regularly. Today’s mainframe looks like a black refrigerator. It’s located in a computer room with a white-tiled raised floor; the Controller’s office manages the mainframe data center and tightly monitors security, including not revealing the make and model of the hardware or allowing photos of its location.

The problem is the software, which also dates to the 1980s. While it has been modernized, such as gaining a web-based front end that provides browser access, the guts of the programs remain the same. Not only do they use outdated programming techniques, which makes it hard to change the software, but fewer employees know those computer languages, as many are retiring. Some Controller’s staff, including Shipman, have been there more than 30 years, she said.

photo of tamara shipman

Tamara Shipman. Photo by Sharon Fisher.

Some states modernized in the late 1990s when it was believed that older programs would stop running in 2000 because they weren’t set up to deal with years past then, Whitworth said. Many of those states are now looking to modernize again, he added.

Idaho isn’t alone. According to The 2017 State CIO Survey, published in October, from the National Association of State Chief Information Officers (NASCIO), 28 percent of respondents said they had a strategy in place to migrate legacy applications to the cloud, and 55 percent said a cloud migration strategy was in development. That said, mainframes were still used in 225 state and local governments as of mid-2017, according to mainframe software vendor Compuware.

“Provision of mainframe computing services to state agency customers has long been a staple of the state CIO function, and it is still a service provided by a large majority of state CIO organizations,” the NASCIO report noted. “Operating under a charge-back model to agency customers, mainframe services have historically been a major revenue source for state CIOs. However, as state CIO organizations migrate towards a service broker model and the demand for mainframe cycles decline, all CIO services are being re-assessed.”

In particular, states are looking at off-premise “mainframe as a service” solutions within the next two to three years, with 10 percent of respondents saying migration was already complete, 14 percent saying it was planned, 33 percent saying they were considering it, and 12 percent saying they were unsure.

Unemployment system on the job
The Department of Labor’s migration of its unemployment system from the mainframe was so successful that it’s won awards and is in the process of being used by two other states, Vermont and North Dakota, said Mark Mayfield, director of the Internet Unemployment System (IUS) consortium.

photo of mark mayfield

Mark Mayfield

The unemployment insurance part, which Idaho employers pay into, first came online in the late 1970s. The benefit side, which pays out to eligible recipients, started in the early 1980s, Mayfield said. But the federal government was concerned about the aging of the state systems and the lack of people to work on them, which made it complicated to implement changes from the federal and state government. “The mainframe was getting to the point where it was very costly, difficult, and risky to make those changes,” he said.

In 2008, the department was approached by the federal government, along with three other states – Wyoming, North Dakota, and Arizona – to form a consortium. “We were the lead state,” Mayfield said. “We were charged with a two-year project in which we would come together and write business requirements and describe what a tax-and-benefit system would look like, then figure out how could we execute those requirements and build that system.” That ran from 2009 to 2011.

At that point, the consortium wasn’t sure of its next step, Mayfield said. At the same time, the State Controller’s office was starting to talk about moving away from the mainframe. Because the consortium seemed a year or more away from starting, Idaho decided to build its own. The project started in 2012, and in September 2014, the mainframe was shut down. The software is written in the more modern computer language C# and runs on a modern database instead of a mainframe-specific one, on premises. “When you look at a vendor, the minimum is in the neighborhood of $30 to $60 million,” he said. “Ours was $10 million. We finished the project about four months and $3 million under budget.”

Mayfield attributed the project’s success to having the business staff and the technology staff work together, as well as the work the team had already done as part of the consortium. “We really felt like, if we were going to do this, we were all in it together,” he said, adding that the project won an award from the National Association of State Chief Information Officers. “When we put up a Powerpoint slide saying we finished ahead of time and under budget, we got a big round of applause.”

That brought Idaho a lot of attention. “We had a lot of states approach us asking, ‘How did you do it? Can you help us?,’” Mayfield said. Idaho formed another consortium, this time with Iowa and Vermont, but six months later, Iowa dropped the project because it didn’t have the internal resources to dedicate and needed a vendor to do it for them. “Our approach was, you need to meet us halfway, not just rely on us to walk you through it,” he said. Vermont is nearing user acceptance testing, while North Dakota rejoined late last fall after giving up on its vendor after ten years, he said.

And the other original members of the consortium? “Wyoming’s taking a system from another state, and they’ve budgeted $40 million,” Mayfield said. “Arizona exited their consortium, and they’re looking. There’s the potential they could rejoin us.”

Child support system modernization

The Idaho Department of Health and Welfare is working with Deloitte Consulting to migrate its child support system from the mainframe.

photo of oracle software installation

Installation of the Oracle software. Photo courtesy of the Department of Health and Welfare.

In 2004, the Division of Welfare was struggling with developing effective eligibility programs, said Greg Kunz, deputy administrator in the division of welfare. “We were at a crisis point, because we could not modernize the mainframe,” he said. “It was too fragile.” The division started a three-year project to upgrade the system, taking it off the mainframe in 2009. “When it was on the mainframe, we had 85 percent of our applications processed within 30 days,” he said.  “When the project was done, we were approving 70 percent in the first day.”

That put Idaho in a good position when the Affordable Care Act came along in 2011, because Idaho already had a modern eligibility system, Kunz said. Gradually, the department started migrating some of its other systems off the mainframe.

photo of greg kunz

Greg Kunz

Now, the division is working on migrating the child support system, which accounts for a third of the entire division’s operations, Kunz said. It worked with Deloitte Consulting, and innoWake, a company Deloitte bought in May, to migrate the old software to more modern technology, said Marlin Metzger, principal at Deloitte’s lead application modernization offering, in Austin, Texas.

Now that the software has been migrated, the next phase starts: Modernization, expected to last 16 to 17 months, Kunz said. “Once you get into an open architecture with an Oracle database, we can now move in directions that are being defined an hour ago, and refined in a week or a month,” he said. “It’s the major  reason we did the migration in the first place: It allows us to rapidly modernize the system, directly targeting things that help us do a better job of customer service and problem resolution.”

Developing its own system from scratch would have started at $60 million, while the way the division did it will cost $24 million, Kunz said. (In comparison, in 2015 the state of Texas halted a similar project after the initial $202 million estimate soared to more than $300 million.)  “We just happened to have a highly successful project, on budget and on schedule, that in any other way would have been a difficult lift,” he said. Whether it will be cheaper than continuing to run the software on the mainframe isn’t the issue, he said. ”We never said we’re going to save money,” he said. “What automation does is allow those business processes to be implemented more effectively.”

ITD mainframe to hit the road in 2019

The Idaho Transportation Department (ITD) is finalizing its plan to move its services off the mainframe, said Chris Victory, chief information officer, who is responsible for all ITD technology.

photo of ibm mainframe

An IBM z13s mainframe, the kind the Idaho Transportation Department has in Florida. Stock photo.

The department actually migrated its operations to a mainframe in Florida three years ago, Victory said. While the mainframe was originally used for highway operations applications as well, those have migrated off the mainframe to more modern storage since then, he said. Now, the mainframe is used primarily for Department of Motor Vehicles operations such as driver’s license records, though the production of the driver’s licenses themselves is outsourced to Gemalto, which also provides driver’s licenses to several other states, he said. (Idaho is also piloting a project with Gemalto to provide electronic driver’s licenses.)

Moving to a different computer system will also give the department the opportunity to examine its operations, Victory said. “It’s not just a change in technology, but how we operate as a business,” he said. As part of the process, some ITD services will be moved off the mainframe in the next few months, around May, with the final services moved off by the middle of 2019, he said.

While the department hopes to see cost savings, it hasn’t quantified them, Victory said. In any event, savings will likely be deployed into support of the new systems, he said.

A number of other states, including Louisiana, New Mexico, and Rhode Island, have or are in the process of migrating DMV services from mainframes.

About Sharon Fisher

Sharon Fisher is an Idaho Business Review staff writer, covering financial institutions, technology, and business development. She holds a bachelor of science in computer science from Rensselaer Polytechnic Institute, and a masters in public administration and graduate certificates in geographic informational analysis and in community and regional planning from Boise State University. She likes explaining things and going to meetings. Join me on Twitter at @IBR_SLFisher.