State of Michigan Office of Financial and Insurance
Service
Due to new government mandates and the consolidation of departments,
the State of Michigan's Office of Financial and Insurance Services (OFIS)
confronted the challenge of custom building, or buying, a new IT infrastructure.
Either option would require the investment of millions of dollars and
several years to implement, along with the need for large scale effort
to re-training and/or hiring staff.
To avoid a costly architecture and software re-design, OFIS management
asked Sybase Professional Services (SPS) to provide alternatives. SPS
demonstrated how the existing environment could be leveraged to manage
all of OFIS's needs, without a wholesale system overhaul or the investment
of several years and millions of dollars. With SPS guidance, OFIS was
able to leverage its existing systems, while enabling the delivery of
next generation functionality. The resulting system now delivers performance
that is proving to be a model for other state agencies, both within Michigan
and throughout the U.S.
Key Benefits
- Accommodates government mandates and department consolidation without
the expense and time of a major system replacement
- Saves millions of dollars
- Yields success in months rather than years
- Serves as a model solution for other Michigan departments and other
state governments
Technology
- Appeon for PowerBuilder
- Sybase Professional Services
- Sybase PowerBuilder
Industry
Public Sector
Avoiding a Complete Re-build
The Office of Financial and Insurance Services (OFIS) was created in
2000 by merging three separate State of Michigan agencies: the Insurance
Bureau, the Financial Institutions Bureau and the securities division
of the Corporation, Securities and Land Development Bureau. Michigan was
the first state in the country to coordinate regulation of financial institutions,
insurance, and securities industries under the federal Financial Services
Modernization Act of 1999.
OFIS is responsible for the regulation of BlueCross BlueShield, 30 health
maintenance organizations (HMO), 139 banks, 169 domestic insurance companies,
259 credit unions, 1,303 foreign insurance companies, 1,484 investment
advisors, 2,178 securities broker-dealers, 7,521 consumer finance lenders,
123,486 insurance agents and 107,991 securities agents. In short, anyone
that touches any financial instrument in the state of Michigan. Cathy
Kirby, deputy commissioner, Consumer Services Division says, "Somebody
we regulate touches every consumer every day in Michigan." It proved
to be an efficient and effective organization. In the first three months
of this year alone, OFIS stopped one illegal pyramid scheme and fined
an insurer $2 million for race-based policies. In addition to its regulatory
responsibilities, OFIS provides health insurance information, financial
direction, credit scoring, insurance complaint statistics, and banking
and money education to consumers. Each of the three divisions merged into
OFIS had a separate consumer complaint office which, collectively, average
close to 4,000 written complaints a year.
Behind the scenes, however, there were data challenges. At the time of
the department merger, the combined three agencies had five Web sites
and 14 different databases. None of these systems were connected with
each other. To make the situation worse, the systems were old and several
were no longer supported by their vendors or by the State of Michigan
technical staff. The combined systems were a conglomeration of several
departments over multiple years, and thus were inefficient, labor intensive
and provided few online transaction capabilities. The limited online options
that did exist still depended heavily on back-end, labor intensive processing
for each activity. Finally, these limitations were directly responsible
for OFIS being out of compliance with government regulations.
OFIS management found themselves in a dilemma that faces many merged
enterprises: How to consolidate the existing database systems in the most
efficient, cost conscious, and expedient manner. In the initial investigation
of the requirement to merge the systems, to comply with government regulations
and to provide the expected online functionality, OFIS management was
presented with only one option - to rebuild. OFIS was told that they had
to get an entirely new system that would cost many millions of dollars
and take years to implement.
To the Rescue
Fortunately, one of the main systems—which tracked only insurance
regulatory compliance and was running a non-Sybase database—was
built with an early version of Sybase PowerBuilder. OFIS called Sybase,
hoping to find someone that could keep that system operating until its
functions could be incorporated into and launched with the to-be-developed
merged system.
An SPS consultant was brought in to keep that one system running until
it was replaced. He began asking questions and quickly found that there
was another option to meet OFIS's demanding IT requirements. Instead of
a complete re-design and re-build, OFIS could keep its systems intact,
and update the current system using PowerBuilder. Given the dramatic time
and cost saving appeal of this option, OFIS moved quickly to adopt the
SPS plan.
"This allowed us to focus on what we could do – rather than
design around what we couldn't," says Kirby. "The ability of
PowerBuilder to reuse objects, made things happen more quickly. The driving
question became, ‘How fast can we merge and integrate?'. While we
were building this system, we had to keep doing our regular jobs, so we
endorsed anything that made the conversion happen quicker."
Although decidedly the right choice, the project had its share of challenges.
One of the first roadblocks was to convince other departments to agree
to base the new system on the upgraded PowerBuilder-based system. "Once
we convinced them that they'd keep all their functionality and actually
be able to add more, they were on board," says Kirby.
SPS became a strategic presence in OFIS and, later, the entire Michigan
state government. As OFIS's confidence in SPS's skills and ability grew,
OFIS asked SPS to do more and more. "We couldn't do half the projects
we've been able to do without Sybase Professional Services," says
Kirby. "They have saved us so much time. One of the things I like
is that SPS can offer us alternatives and allow us to say, ‘We can
do this.'"
Dan Allison, Web analyst for OFIS agrees, "Sybase Professional Services
talks the talk and walks the walk. They say what they do then they do
what they say. It's refreshing to see that level of service and integrity
in a database service provider. SPS' drive to create robust database solutions,
coupled with the tools to make it happen means we can provide OFIS customers
and staff with high quality services and tools in extremely compressed
timeframes."
A Solution That Delivered More – For Much Less
The Sybase-OFIS Locator module is "A quantum leap forward for any
state in the ability to present information to its citizens," says
Allison. "It's going to set a new standard for our counterpart agencies
in other states in how they present information about regulated entities
and professionals." OFIS' Human Resources/Budget Division was so
impressed with SPS solutions that they are now working with SPS to upgrade
many of their own systems.
Due to the improved functionality, the OFIS system life cycle has been
extended indefinitely, saving the state millions of dollars in up-front
license costs, and untold hours and dollars in implementation and employee
re-training. Perhaps the biggest surprise to OFIS was that SPS didn't
try to make it a Sybase-product project. Kirby explains, "SPS showed
us that we could accomplish everything we wanted—merging, compliance
and online functionality—with the non-Sybase systems that were already
in place. This is proof that SPS works with clients in their best interests."
That philosophy forms the cornerstone of the SPS-customer partnership.
"I'd be lost without Sybase Professional Services," concludes
Kirby. "SPS dramatically increases my technical knowledge and allows
me to focus on the larger picture. SPS consultants enhance what we're
doing, offer smart alternatives, and provide much-needed objectivity."
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