Seiu Local 36 Benefits Office: The Y2k Crisis and Its Aftermath

SEIU Local 36 Benefits Office: The Y2K Crisis and Its Aftermath

Ira Yermish

IDEA GROUP PUBLISHING

Local 36 Benefits Office: The Y2K Crisis and Its Aftermath IDEASEIU GROUP PUBLISHING 1331 E. Chocolate Avenue, Hershey PA 17033-1117, USA Tel: 717/533-8845; Fax 717/533-8661; URL-http://www.idea-group.com

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g n i h s i l b u P p u o r G a e SEIU Local 36 Benefits Office: The d I t h g i r py Crisis and Its Aftermath CoY2K g n i h s i l b u P up o r G a e EXECUTIVE SUMMARY d I t h g i r y Cop g n i h s i l b u P p u o r G BACKGROUND a e d I t h g i r y Cop g n i h lis b u P p u o r G a e d I t h g i r y p Co Ira Yermish St. Joseph’s University, USA

This case describes how a service organization approached the Y2K compliance issue and how a complex decision-making process led to near operational disaster. We will see how software vendor relations can be complicated by vendor viability and technological innovations. Another issue we will explore concerns opportunities for personal growth and expanded responsibility in a small business environment. We will see how turnover creates stresses, particularly in an organization of this size. Changes in focus from developing in-house expertise to more extensive use of outside support will be examined. Finally, we will examine the relationships that exist among the various service suppliers and how data is interchanged between these suppliers and the organization. While standards exist in other fields, none have been adopted here. Case readers will be encouraged to formulate upto-date management strategies that address these issues head-on.

The Service Employees International Union (SEIU) represents workers in the janitorial and service fields. The union is active politically on a national level as can be seen on the homepage of their Web site (see Figure 1, www.seiu.org). Despite a general downward trend in union membership, SEIU continues to grow, particularly in metropolitan areas with large immigrant populations. Local 36 of SEIU is located in Philadelphia and the surrounding Delaware Valley region. The Union Local has about 3,000 full-time and 300 part-time workers primarily in the janitorial, window cleaner and maintenance trades. Over the years this membership has been quite stable. The Union Office is responsible for developing the Union membership, for negotiating contracts and for addressing member/contractor disputes. The Benefits Office is separate from the Union Office and provides the administrative support for the health, welfare, and insurance and pension benefits negotiated as part of collective bargaining agreements with various employer groups. Though the two offices are in the same building in downtown Philadelphia, they are separated by more than just 13 floors. The Union Office has pressure to provide more benefits for the members at a lower cost to the employers. The Benefits Office seeks to maintain these benefits in a cost-effective manner for the longterm stability of the underlying funds.

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Figure 1: SEIU International Homepage

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Table 2 presents some statistics about the Benefits Office operations. Membership is divided into two basic categories, full-time and part-time, since benefits vary by this classification. Contributions for benefits are made by the employers monthly based upon hours worked and other criteria. Membership dues contributions are passed on through the Benefits Office to the Union Office. The Benefits Office maintains funds in the form of investments and CDs. The interest and growth of the portfolio represent a significant part of the operational income. Membership benefits include medical, dental, vision, legal and pension. The expenses for these are divided into two classes: third party and self-insured. For the third-party benefits, regular payments are made to the insurers and they are responsible for payments to the providers. In the case of self-insurance (e.g., vision), claims are processed and paid by the Benefits Office directly. Administrative expenses represent the other major area of expenses. The large losses estimated for 2001 will be reduced with major changes in some of the benefits provided. This is required to handle reductions in the member contributions negotiated in recent contracts. Figure 2 describes the relationships among the various entities. Contractor Groups are made up of a number of Contractors (employers). SEIU negotiates with a number of contract groups, particularly groups of contractors that provide building maintenance for their own buildings or for a number of other buildings. There are several hundred contractor/employers included in the contractor groups. The Union Office is a regional local branch of the International Union that represents the Membership (and Dependents) in the Union. In traditional terms, the grouping of employers in a contract group and the grouping of employees in a union provide a balance of negotiating power. In addition to establishing fair wage rates, the collective bargaining agreements provide for the employer collection of union dues and the establishment of welfare, loss of time, pension, insurance and other benefits. The Union Benefits Office is responsible for the administration of the benefits negotiated above. The establishment of a separate entity for administration resolves certain conflict of interest problems that may arise. The Union’s role is organizing and defending workers’ rights under the collective bargaining agreements. The Benefits Office role provides for efficient processing of benefits transactions. As can be seen from Figure 2, the Benefits Office is central. 1. They are responsible for implementing the benefits included in the agreements between the Union and the Contractor Groups.

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Table 1: SEIU Local 36 Statistics ($ x 1,000)

1997

1998

1999

2000

2,800 350 3,150

2,700 350 3,050

2,800 320 3,120

3,150 320 3,470

2001 Est. 3,000 320 3,320

$

12,558 1,352 13,910

12,556 1,432 $ 13,988

13,322 1,044 $ 14,366

14,492 938 $ 15,430

11,442 1,267 $ 12,709

$

7,365 3,652 11,017

6,797 3,841 $ 10,638

7,825 4,399 $ 12,224

9,043 7,762 $ 16,805

10,326 6,130 $ 16,456

1,219

1,281

1,217

1,005

1,057

1,674

$ 2,069

Full Time Members Part Time Members Total Members

Contribution Income Interest Income Total Income

Third Party Benefits Expenses Self-Insured Benefits Expenses Total Benefits Expenses Administrative Expenses Net Gain/(Loss)

$

$

925 $ (2,380) $ (4,804)

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Figure 2: Entity Relationships Contractor Groups

Contractors Employers

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B

Membership and Dependents

A

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C

E

D

Third Party Insurers

2.

Benefit Providers

They are responsible for collecting the membership dues and employer benefits contributions from the employers on a regular basis. Included in this function is an audit process that attempts to guarantee that all appropriate employees have been accounted for and their dues and benefits contributions collected. 3. They are responsible for identifying how benefits should be funded, either through internal selfinsurance or through Third Party Insurers. In this process the Benefits Office provides eligibility lists to the insurers, and track claims and benefit utilization. 4. They process claims from Benefit Providers (e.g., doctors) for services to the members. 5. They provide information to the Membership and their dependents on benefit eligibility, claims processing and other benefit issues. Consider the process cycles important to the Benefits Office. Every couple of years, depending upon the contractor group, the Benefits Office provides significant support (flow A in Figure 2) for the contract negotiation process. The Union wants to provide as many benefits to the membership as possible. Given the nature of this worker base, it is very difficult for employers to make large contributions to the health and welfare benefits of their employees. During this negotiation process, the Benefits Administrator calls upon a complex planning model developed by a consultant for predicting the impacts of changes in benefit rates and expenses. Once the contracts are in place, the Benefits Office is responsible for the monthly collection of payroll deduction and welfare contributions from the employers (flow B). This is one of the primary

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Figure 3: Benefits Office Organization Chart Benefits Administrator Mike Ragan (1)

Claims Manager Linda McCollough (8)

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Outside Consultants IT Consultant Benefits Consultants Fund Auditors Legal Support

Pension Manager Tina Soncini

IT and Audit Manager Mark Ranieri

Accounting Manager Claire Longeway

functions of the BASYS information system. It prints monthly contribution report forms for each of the employers and then handles the deposit of these contributions to the various benefit funds. From these contributions, the BASYS system calculates member benefit eligibility on a daily basis. As new members join the union after an initial period with the employer, their demographic and dependent information is added to the system. Contributions are placed into funds to support the expenses to be incurred against these benefit areas. Given the nature of the timing of these flows, the Benefits Administrator has latitude in investing these funds to earn interest income. The outside auditors and legal support are responsible for seeing that these funds are invested appropriately. Members deal with the Benefits Office (flow C) on a varying basis depending upon need. When a member or a dependent needs to use a benefit (e.g., medical, dental or legal), the member contacts or visits the office to submit a claim. In some cases (e.g., hospitals and prescriptions) these are handled directly through the Third Party Insurers. The Claims Department is responsible for determining the eligibility and limits of the claim and work with the primary Benefit Providers (flow D), or the Third Party Insurers (flow E) to handle payments directly to the providers or whether they are part of existing contracts. One of the complexities of this process is communicating eligibility information from the BASYS system to the various providers. Without an industry standard format for these transfers providers require their files be formatted differently. In addition, the claims utilization data provided

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Table 2: Software Applications Package BASYS Benefits System

Peachtree Accounting Lotus 1-2-3 Excel WordPerfect Word Access Claims Analysis System Employer Audit System

Functions Contributions Claims Pensions Benefit Eligibility General Ledger Accounts Payable Planning and Modeling

Support Mode Monthly Maintenance Fee to Primary Vendor

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Financial Worksheets Word Processing Word Processing Database Claims Analysis Integrates contributions with Employers data Extracts Eligibility data from BASYS and exports to Third Party Insurers Projects Contributions and Fund Utilization Reporting and Graphing Operations Computer and Internet Operations

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Source BASYS, INC.

Peachtree Software, Inc. Lotus

Internal IT Support

Microsoft Corel Microsoft Microsoft External Consultant External Consultant

Internal IT Support External Consultant Internal IT Support Internal IT Support Internal IT Support Internal IT Support External Consultant External Consultant

External Consultant

External Consultant

External Consultant

External Consultant

Off-the-shelf

Internal IT Support

Off-the-shelf

Internal IT Support External Consultant HW Vendor Support

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Fund Planning Models

Miscellaneous Graphics Packages Miscellaneous Backup and Communications Packages

also varies in format from provider to provider. To support these functions, the Benefits Office is organized in a traditional functional structure (Figure 3). The Benefits Administrator is the primary executive, responsible for all internal operations as well as all high-level external relations. The operation is divided into five main areas: claims processing, contributions posting and tracking, pension operations, internal accounting, and information technology support and employer audit. Most of the personnel are found in the claims processing area. Given the highly technical nature of some of these operations, the Benefits Office makes extensive use of outside consultants for fund audits (as opposed to employer audits), benefit projections and software design and development. The Benefits Office basic information technology is shown in Figure 4. All users are connected to the network through an Ethernet connection. The primary support operation is provided by a standard benefits administration package supplied by BASYS, Inc. This is the only application on the SUN Server. All other operations are installed on the Windows NT Server. In addition to the standard office automation products (LOTUS 1-2-3, WordPerfect, EXCEL and WORD), there are a number of other standard, and custom programs. Table 2 lists these packages, their functions, source and mode of support.

Mark Ranieri, the Manager of Information Technology and Employer Audits packed up the DEC Alpha Server that was sitting idly in his office since he arrived six months before in June of 2000. The high bid he received for it on eBay.com was only $1,200, a far cry from the $27,000 invoice price. This

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Figure 4: Benefits Office Systems Architecture Peachtree Accounting Claims Analysis System Employer Audit System Eligibility Export System Planning Models

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SUN SOLARIS SparcServer BASYS System

10Mbs Ethernet

Network Printers

CISCO SYSTEMS

Internet Router (DSL Connection)

Network Printers 4 Printers

Terminal Emulation Word/Word Perfect Excel/Lotus 1-2-3 Access

20 Stations

PC Workstations

PC Workstations

was a sad end to a process that at one time was thought to present answers to many questions, including a resolution of the infamous Y2K problem. Here, so soon after his college graduation, he finds himself in a position of responsibility, but not always as busy as the popular press might suggest. Back in 1978 the benefits administrator of SEIU Local 36, Joe Courtney, contacted the Union’s law firm for a recommendation about how to implement a computerized system for their operations. Up to that point the benefits operations were completely manual with just some simple word processing equipment. The law firm recommended a consultant firm, MagnaSystems, Inc., and their principal, Ira Yermish, who had done some work for them. This firm helped the Union identify and negotiate a contract with software company, Benefit Systems, Inc., located in Baltimore Maryland that had a standard package for supporting operations such as SEIU’s. After demonstrations and discussions, the package, written in version of BASIC and running on a minicomputer using the PICK operating system, was installed, and slowly most of the regular processes were converted to the new system. Joe Courtney’s background was interesting. After high school and vocational training, he rose through the ranks of the pipe-fitters union. Along the way he attended seminars and training programs to gain the management skills needed to advance within union administration. His management style was paternal and caring. He led with a strong but understanding voice. He was still “Mr. Courtney”

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when he retired in 1996. One of his management styles was to use outside expertise whenever he felt he didn’t have the requisite experience. At his retirement he gratefully acknowledged these sources and their contributions to his success. After the installation of the Benefits Systems package, the relationship with MagnaSystems continued. In 1983 they developed a package to support their employer audit functions. The package was written in LOTUS 1-2-3 for the “portable” COMPAQ computer. Additional software was written to extract contribution data from the Benefit Systems package to be matched against the employers’ records. Millions of dollars were recovered thanks to this package over the 15 years of its active life. Later, Joe Courtney asked the consultants to develop a planning model, again based in LOTUS 1-23, to forecast fund balances and the effects of changes in benefits. This model was even used in contract negotiating sessions with the contractor groups. Another issue that he wanted to resolve concerned problems with third-party administrators, in particular Blue Cross and Blue Shield, in their claims payment processes. There was some evidence that providers were over-billing and the thirdparty administrators were just passing these charges along, failing to check for problems. The consulting firm built a claims analysis program in Foxpro again using membership eligibility data extracted from the Benefit Systems package and claims data submitted on tape by the third party administrators. This package made it easy to identify duplicate billings and payments to ineligible members. It was also used to identify providers with patterns of dubious practices. Over the years the relationship with Benefit Systems was mixed. Courtney was always thinking of new ways to manipulate the data in the system but Benefit Systems was very hesitant to change their system to meet the needs of only one of their clients. There was a fairly hefty monthly maintenance charge for the software and customizations were, when finally approved, very expensive. But, on the whole, the package met the basic needs of recording contributions, calculating eligibility for the various benefits, and tracking and paying internally funded claims. Its general ledger and accounting functions were weak so a standalone package, Peachtree, was selected to implement those functions. Also, a bank processed and printed pension checks. Along the way a couple of hardware upgrades were made as the technology improved and the needs grew. Ultimately, the Benefits Systems became BASYS, Inc. and the system migrated to a SUN system, using the UNIDATA database system as the core for the BASIC code. This proprietary environment with its character-based interface did the job without much flash. The role of information technology management over Courtney’s tenure was interesting. When the first audit program was established, he hired a recent college graduate with a good understanding of information technology and accounting. He was responsible for conducting the employer audits with the new software. After a number of turnovers in this position, one of them, John Matekovic, demonstrated a real interest in labor and benefits issues. He attended a number of seminars and courses and earned his certification in benefits administration. He hired an assistant who was primarily responsible for the external audits while he concentrated on internal information technology and operational issues. Though he knew that Joe Courtney was going to retire shortly, he also knew that his experience wouldn’t be adequate to be his replacement. Faced with this, John found a position with the consulting firm of Towers-Perin that had provided actuarial and benefits consulting to SEIU for many years. His replacement, Chris O’Brien, started immediately after graduation from the same school as Matekovic. O’Brien faced a similar issue. The auditing function was straightforward. The process had become very efficient over the years. Under his direction, the consulting firm developed a new audit system, based on ACCESS and Visual Basic that handled the audit process even more efficiently. Audits that took several days using the old system could be completed in hours with the new system. The internal computer operations were smooth, with just the occasional PC or network problem to be resolved. Again, this gave an employee the flexibility to explore personal growth. In his case this was law school. Finally, in the fall of 2000, O’Brien with just a few months of law school remaining joined

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an Internet start-up firm, specializing in government and union technological issues. O’Brien’s departure was not taken with equanimity from Ragan. O’Brien’s subordinate, Ranieri, with just six months of experience, moved into his office and took over his roles. When Mike Ragan arrived in 1996, the operation was running smoothly. Except for O’Brien, all of the operational and clerical management had been at SEIU for many years. They understood the basic operations thoroughly. Their clerical experience met the organizational needs well. Ragan’s background was very different than his predecessor. With a management degree from the University of Pennsylvania and experience as an officer in the Air Force, Ragan served as the administrator of the Building Operators Union for a number of years. In that position he was able to use his own programming experience to develop a number of internal systems for his organization. He was a competitive rower and continued his relationship with the sport by heading a number of regattas on the Schuylkill River. What would be his mark on the organization that he now managed?

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In early 1998, the SEIU Benefits Office faced a dilemma in part prompted by the pending Y2K problem. Relationships with BASYS, the primary software supplier, had grown sour for a number of reasons. Ragan felt that they weren’t responsive enough for changes in the application that he requested. The BASYS management was concerned that their staff was tied up with the difficult Y2K conversions and other developments. Next, Ragan had stopped paying the monthly maintenance fees because he argued that they seemed like “money down the drain.” Though these fees entitled SEIU to get all of the software updates, SEIU would have to pay extra to have them installed on their system. The system was running adequately and he was willing to pay for emergency repairs on an hourly basis. From a technological point of view, there was some concern about the software. It was based upon a very mature technology that was growing more and more out of step with mainstream technologies. The underlying database (UNIDATA) was developed with a non-relational structure. The software was written in an obscure dialect of BASIC (UNIBASIC), originally developed 20 years before. The software did not take any advantage, nor could it, of the Windows or other graphical user interface (GUI) facilities. Though they were accessing the system through an Ethernet local area network (LAN), the PC was really acting only as a “dumb terminal” to this application. Ragan faced the following three alternatives: 1. Agree to pay the fees to BASYS necessary to bring their system up to current standards and reestablish a long-term arrangement with their vendor. 2. Design and implement a custom in-house system. 3. Investigate a number of alternative systems that had been developed using current software technologies. The first option seemed to Ragan as “throwing good money after bad.” The second option was too much of a gamble given the short time period ahead. Internal staff capabilities were inadequate and the consultant indicated that this option was extremely risky. It seemed that there was no choice but to explore the options. Ragan and O’Brien began their search for an appropriate system. A couple of options were identified. One in particular seemed interesting. A California company, Information Concepts, Inc. (ICI), was developing a “next-generation” Windows-based benefits management system. They had experience with a mainframe-based system that they were re-architecting for a client-server environment. The real draw to Ragan was Tom Dowling, who was the original designer of the Benefit Systems product. Dowling was now a principal for ICI and responsible for the East Coast sales. Dowling prepared the proposal and assured Ragan that their system would serve the needs of SEIU. Ragan also asked Tim McGuckin, a benefits consultant that Ragan used at the Building Operators Union for his advice. He seemed satisfied that the system would meet their needs. Ragan and O’Brien went out to California and saw a demonstration of the system and seemed impressed. Ragan, realizing that things

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had to move fast, signed the contract in June of 1998. The cost of the hardware and software, modifications, installation and training was nearly $250,000. Though very expensive, there didn’t seem to be a real choice. The timeline would be tight but Dowling assured Ragan that it was well within ICI’s capabilities. There was one major change that was required for the system. SEIU negotiated an interesting arrangement with Amerihealth to handle a mixed claims processing environment. With traditional Blue Cross, all the claims were entered by Blue Cross, examined and then paid. With the Amerihealth system, the claims would be entered at SEIU and then transmitted electronically to Amerihealth for evaluation. When the evaluation was completed, an electronic transmission would be sent back to SEIU for actual check writing. This would lower the costs of claims processing significantly. Unfortunately, this capability was absent from the ICI system and would require additional programming. Because of the timing, this additional programming was needed. McGuckin offered to supply temporary programming to meet the needs until the ICI programming was completed. During the summer and autumn of 1998 representatives of ICI came to review the operations at SEIU and to start the training of the operations management in the claims, contributions and pension areas. The computer system was delivered and installed. For several months thereafter progress was not apparent though the invoices for work appeared regularly. In December of 1998 Ragan was concerned that after the training sessions during the summer there was no progress on actually getting the system implemented. Some data entry of pension information was completed, but ICI couldn’t get the system to print checks on the network laser printers. Pension processing seemed to be the easiest function and things just weren’t happening. At this point the computer consultant, Ira Yermish was brought in to review the situation. Except for a brief review of proposals he had been “out of the loop” for this contract. McGuckin was providing the consulting support for this project. Yermish examined the contract in detail and discovered that ICI was not required to provide conversion processing. In other words, transferring the existing data from the BASYS system to the ICI system was not included in the contract. McGuckin did not have the ability to provide this support so Yermish offered his services to make the conversion. This cost was not expected and was not insignificant. After a serious meeting with ICI principals, the delays were explained and ICI assured Ragan that the conversion would be completed on time. During the next few months, Yermish tried repeatedly to get complete conversion database details. Finally, in March of 1999 these details were finalized and Yermish developed the conversion programs. A couple of months passed, test data was prepared by Yermish, but ICI couldn’t get this data loaded into their system. Still, there was little progress in getting any of the system working. Seeing no progress, Ragan contacted their attorney and meeting was setup with Ragan, O’Brien, Yermish, McGuckin and the attorney, Paul Bomze. After reviewing the situation it appeared clear that there were significant problems at ICI. Over $100,000 had already been paid to ICI. The invoices for custom programming kept appearing from ICI. There was an expensive computer that was sitting idle at SEIU. There was no visible progress on the installation and obvious panic. The first step taken at this point was to contact BASYS. Could they actually make the upgrades to their system in time for the millennium change? Except for the Amerihealth processing, which McGuckin software was already handling, they could do it. It would not be inexpensive but it was possible. Once this option was clear, the decision was made to terminate the contract with ICI. Immediately the lawyers went to work. ICI claimed that their contract was still in force and that the balance of over $200,000 in costs was due. SEIU claimed that ICI failed to deliver on their promises. In discussions with the principals at ICI, it came out that Dowling made the contract without the home office consent to the details. He had sold a project that could not be delivered for the price in the contract. Cash flow problems at ICI forced them to work on more lucrative projects. The case was scheduled for arbitration, but ICI backed out at the last minute and both parties agreed that the contract was voided and that no cash need flow in either direction. In December of 1999, BASYS upgraded the server at SEIU and successfully implemented the changes to their software. Except for a couple of minor problems, the software ran properly on January

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3, 2000. In August of 2000, the modifications to handle the Amerihealth transactions were installed at SEIU. The software still looks like the old character-based software. Work is progressing at BASYS on a web-based front end, leapfrogging any direct Window interfaces.

CURRENT CHALLENGES

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In the spring of 2000, the panic was over. Relations with BASYS improved markedly. It was time to regroup and examine the long-range information technology issues. Ragan met with O’Brien and Yermish to review options for future developments. These included: • Upgrade of the 18-year-old audit system • Major revisions to the planning models • Implement EDI processes for eligibility transfer • Upgrade of the claims analysis software • Establishment of a Web site for members and employers The audit system was built in 1983 around a LOTUS 1-2-3 and the original Microsoft BASIC. With a few “band-aids” it survived into 2000. One of the major weaknesses of the original program was its limitation of audit size. With O’Brien and his assistant Chris Donoflio, Yermish designed a new audit system using ACCESS and EXCEL. Over the course of the next few months Yermish implemented this system and O’Brien and Donoflio tested it on several small audits. As the testing progressed they made important suggestions for improvements. Finally, with the completion of a major audit involving hundreds of employees, the system was deemed complete in December of 2000, but there will be changes needed as new contracts arise with more complex eligibility requirements. As time goes on the question of application support looms ever greater. The planning models were built for the former administrator, Joe Courtney. They were standalone LOTUS spreadsheets that were based on quarterly totals collected from various accounting and operational data in the organization. The models could hold one year of historical data (by quarters) and could project fund balances for five years into the future. The presentation of the model data is an important part of each quarterly trustees meeting. Ragan, however, felt that the models needed significant changes to reflect changes in his plans for future operations. He wants the models to extract data automatically from the operational systems (Peachtree accounting and the BASYS system). He wants to be able to review more historical data on a monthly instead of a quarterly basis. He also wants more flexibility in the model calculations, but how does he assure that this flexibility doesn’t create more opportunities for failure due to error by the end-user? One of the issues not handled effectively within the BASYS system has been the transfer of eligibility information to the third-party insurance administrators. The BASYS system calculates the eligibility based upon contributions and contract specifications. The problem is that each of the third party entities has a different format for eligibility transfer. Yermish implemented a system to extract the data from the BASYS system and translate it into the appropriate format. Unlike other industries, there is no established standard for this data. There have been attempts in the industry to provide these standards (e.g., HL7), but these have failed to gain universal acceptance. Perhaps the new movements towards XML will provide the springboard for this process. While waiting for the Benefits Office must get the data moved efficiently among the providers. There are a number alternative design and operational alternatives. They aren’t sure which one makes the most sense right now. The claims analysis software was developed in the early 1990s to identify problems with claims. Like the eligibility data, claims data is submitted in different formats by each of the third-party operations. To date, the SEIU system treats each of these as separate databases. There is a movement towards disease management, where the Benefits Office provides direct insurance for specific conditions or diseases. To prepare for this, the system has to integrate the claims data by member. Again, there is no standard for the presentation of claims data. Inconsistencies within the databases must be resolved.

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Finally, the Benefits Office in conjunction with the Union Office wants to develop a Web site for to better serve the membership. The details of the design and the functionality of this site have not been finalized, though an arrangement with a web design firm, 7 Pixels Interactive has been made. One of the critical design issues concerns the nature of the membership. A large percentage of the members do not read English. What functions should be provided for members and employers? Ragan and Ranieri have a number of choices as to how to implement these functions: 1. Contract with BASYS to include reports and procedures to be included within their standard system. 2. Contract with an outside consulting firm to extract the data and load it into a working data warehouse in a manner similar to the processes that have been used in the past. 3. Develop more in-house programming and support expertise to take complete control over the projects. As the year 2001 unfolds, Ragan and Ranieri see that there is much work to be done. The Y2K crisis is behind them but they are not done with improving the information technology infrastructure appropriate for the modern organization. The big question is how it should be done and by whom. How do they work to effectively integrate the systems provided from a number of sources with different data formats and specification? They must consider how to manage these complex projects without straining their resources or losing focus on what the Benefits Office is responsible for: managing member benefits.

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Applegate, L. M. et al. (1999). Corporate Information Systems Management, fifth edition, IrwinMcGraw-Hill. Ripkin, K.M. and L. R. Salyes (1999). Insider Strategies for Outsourcing Information Systems, Oxford University Press. Sloane, A.A. and F. Witney (2000). Labor Relations (tenth edition), Prentice-Hall. Weiss,D (1996). Beyond the Walls of Conflict: Negotiating for Unions and Management, Irwin Publishing.

Ira Yermish is an Assistant Professor of Management and Information Systems at St. Joseph’s University in Philadelphia. His teaching and research areas include systems analysis and design, data base management, data communications, information resource management, and strategic management. In addition to his current academic activities, he is an active management and information systems consultant. Dr. Yermish earned degrees from Case Western Reserve University, Stanford University and the University of Pennsylvania. His early professional experience included positions with Univac, Control Data, RCA Corporation, the Institute for Scientific Information, and as founder of MagnaSystems, Inc. When not teaching or consulting, Dr. Yermish is an avid cyclist, runner, photographer, choral singer and arts board member.