Cloud-based vs Cloud-native Technology: Overcoming the Inadequacies of Legacy Unemployment Insurance Systems

The fact that unemployment insurance systems are reliant on aging, outdated technology is no secret. This was highlighted by a National Association of State Workforce Agencies (NASWA) study back in 2010, but only a few states paid heed at the time and took steps to modernize their unemployment insurance administration systems. Then, pandemic related layoffs inundated State Workforce agencies with a massive surge of claims that overwhelmed their systems, impacting millions of unemployed Americans. To handle these aging systems, states desperately sought the help of COBOL programmers skilled in a 60-year-old computer language.

We now have more states moving to modernize their unemployment systems. The use of contemporary technology guarantees that future unemployment insurance systems are a lot more resilient in the face of a crisis. It also streamlines the claims and benefits process, reduces the chances of fraudulent claims that shutdown systems, ensures better service and timely issuance of benefits, decreases agency expenses, and much more. An important element of this transformation is taking advantage of the cloud for public services.

To take advantage of new frameworks and modern infrastructure platforms, State Workforce agencies must end the reliance on physical, in-house mainframes for their computing and data storage needs and adopt cloud for their unemployment insurance programs. State Workforce agencies have three primary approaches to adopt cloud, cloud-enabled, cloud-based, and cloud-native unemployment insurance systems. Let’s take a closer look at each of these options and see which one is better.

Cloud-Enabled Unemployment Insurance System

Going the cloud-enabled route involves shifting legacy applications and software from in-house servers to the cloud, with minimal changes to their functionality.

Existing applications are repurposed for use in the cloud environment without any changes to their underlying code. Cloud-enabled software continues to function the same way as it did when it was hosted in-house. Minimal change management and speed of implementation are some of the key benefits of this approach. But, repurposing outdated applications to run on modern cloud infrastructure fails to take full advantage of the flexibility, scalability, and security that the cloud offers. Additionally, it is challenging to add new features and functions to the software. You may require regular system upgrades to stay relevant, which is time-consuming and results in inefficiencies. With cloud-based and cloud-native technologies, cloud-enabled loses its ground as a future-proof option.

Cloud-Based Unemployment Insurance System

The cloud-based approach allows organizations to leverage cloud features without redesigning the complete system. This cloud-migration strategy may also involve under-the-hood modifications to existing applications that add functionality and allow them to make better use of cloud resources, without changing their inherent behavior. For example, State Workforce agencies may move the customer service portion of their unemployment insurance system to the cloud while running the other modules on existing technologies Cloud-based applications are more resilient than legacy or on-premise COTS-based systems but they fail to take the full advantage of the cloud including automated updates to keep the underlying technology foundation current, use of automation to enhance efficiency, or quick changes or additions to core capabilities. Cloud-based technologies can build more scalable unemployment insurance systems, but they may not be able to adapt easily to regulatory changes or constituent expectations.

Cloud-Native Unemployment Insurance System

Cloud-native applications are designed and created specifically on the cloud environment and, as such, offer users all that the cloud has to offer while minimizing maintenance and operations costs. The cloud-native route is the most comprehensive modernization strategy and involves thoroughly updating key unemployment insurance IT modules from the ground up. The approach requires replacing the existing legacy systems completely with a new system/module built natively in cloud, delivering unparalleled flexibility, resilience, accessibility, and security. These cloud-native UI systems are faster to implement as compared to adoption of an on-premise or cloud-based COTS-based systems and enable organizations to leverage key capabilities offered by the underlying cloud platforms. For example, Infosys LaborForce, a Salesforce-native unemployment insurance solution, leverages Salesforce Einstein to power its multi-lingual chatbots, enable automation, and facilitate AI-based data analytics for improved decision making. Another advantage is the automated updates to underlying technologies that keep the system current, making it easier for agencies to shift focus from technology operations to their core mission.

Do You Want to Avoid Replacing Your Legacy Unemployment Insurance System with Another Legacy Unemployment Insurance System? Adopt The Cloud-Native Approach.

It just takes 2 years for a new technology to be superseded by a newer, emerging technology. COTS-based approach or just simple lift-and-shift of existing unemployment insurance applications to the cloud still requires State Workforce agencies to keep updating their systems to ensure they don’t become outdated. This impacts efficiency and also makes them vulnerable to cyber-attacks. A cloud-native approach allows State Workforce agencies to break the perennial cycle of keeping their systems updated by handing this responsibility over to their partners.

Related Readings

• What is an Unemployment Insurance System
• Using AI To Modernize the Unemployment Insurance System
• Building a Future-Proof Unemployment Insurance System
• Modernizing the Unemployment Insurance Systems

Author Details

Stephanie Puryear, Principal Consultant – National Labor Practice, Infosys Public Services

Stephanie has 20 years of experience helping Labor and Workforce Departments administer Unemployment Insurance (UI) programs effectively. She has delivered UI solutions in 5 states and is the Manager for Business Analysis and the UI PMO for LaborForce. Stephanie has designed highly user-friend systems and is expert on helping agencies fight UI fraud.