Part 6: Portal access to Student Loan account information

Realising benefits from six public sector technology projects.

What the project was about

Three government departments share responsibility for the Student Loan Scheme (the scheme):

  • the Ministry of Education – policy and reporting;
  • the Ministry of Social Development/StudyLink – loan agreements and payments to students; and
  • the Inland Revenue Department (Inland Revenue) – assessing debt and collection of repayments.

Student loan borrowers – more than 700,000 and steadily increasing – form a large proportion of Inland Revenue's customers. With a nominal value of about $13 billion, the scheme is a significant Crown asset. The Student Loan System (the System) allows this asset to be effectively and efficiently managed and, in particular, allows borrowers to repay loans more quickly.

The project aimed to create a new customer interface at Inland Revenue, as part of a wider re-design project. It allowed an individual student loan borrower's information from Studylink and Inland Revenue to be integrated and made a consolidated, up-to-date account visible to the borrower through a single portal. In April 2012, the first phase of the System was completed, in time to meet new legislative requirements. Phase 2, still in design, is due to be implemented in 2013.

In 2006/07, a two-phase business case to redesign the System was prepared. In 2009/10, funding for it was approved. The business case analysis identified two types of benefits:

  • a student loan information system more fully integrated with Inland Revenue tax systems and more access for loan borrowers to real-time and integrated information; and
  • transforming and redesigning how Inland Revenue did business to make it:
    • more adaptable to changes in policy;
    • effect change faster; and
    • increase the use of automated and e-channels for customer access.

In 2009, the Government made further significant changes to student loans policy. Inland Revenue believed that the complexity of the student loan policy design and the rule changes that had been implemented since the policy began in 1992, and the interdependencies with other parts of the tax system (such as income tax and PAYE) made delivery of the redesign in the time available almost impossible.

Ministers agreed that Inland Revenue should focus on changes needed to meet the requirements of the Student Loan Scheme Act 2011 promptly and cost-effectively. This decision reduced the aims of the system redesign to:

  • enhancing the borrower experience, providing services that encourage repaying and allow borrowers to manage their loan;
  • provide information about student loans that is accurate and complete and presents a consolidated view of the loan balance;
  • automating business processes except where human interaction adds value and is effective, repeatable, and efficient;
  • transitioning borrowers to using online services and ensuring that enhanced online services and tools available through the borrower portal are user-friendly, reducing compliance and administrative costs;
  • allowing more collaboration between Inland Revenue and Studylink to streamline functions, processes, information transfer, and delivery channels;
  • allowing flexible, accurate, and reliable reporting to meet operational, management, and Crown needs and the requirements of external agencies;
  • ensuring that business processes accurately reflect as much as is practicable the Government's policy intent and support best practice in managing loans; and
  • complying with Inland Revenue's architectural principles and standards and being scalable and flexible enough to meet future business needs.

After Cabinet's agreement that the focus should be the policy changes, the business case was no longer the primary "driving force" for the design, but the thinking and planning behind the business case remained influential. Some of the achieved benefits helped to transform Inland Revenue's systems. These benefits included:

  • customers having better access to account information in an integrated state;
  • more use of e-channels; and
  • greater flexibility in the system.

The redesigned project was divided into two phases. In April 2012, the first phase, which included changes needed to meet the requirements of the Student Loan Scheme Act 2011, went live. As a result, all student loan borrowers can access a consolidated, up-to-date loan account through a single portal.

This consolidated account includes new borrowing through Studylink, repayments through PAYE and other means, and information about total debt and how it can be repaid. This information is refreshed with daily updates of loan draw-downs from the Studylink system and Inland Revenue's employer tax and loan payments modules. As a result, for the first time, borrowers can have an integrated, up-to-date view of the true position of their loan, through the Inland Revenue portal.

Inland Revenue estimates that Phase 1 delivered 40%-50% of the project scope of the redesigned project, including some new business process capabilities. These are expected to provide Inland Revenue with greater flexibility to manage policy changes and faster design time so that changes happen faster and more cheaply. Inland Revenue has taken a significant step towards its corporate goals of:

  • more people using the e-channel;
  • more people managing their loan balance and repayments; and
  • more efficient and timelier collecting, with revenue benefits for the Crown.

The capital costs of the project were estimated as up to $35.9 million. The operating costs were $13.3 million during the four years of the project and $3.2 million a year after that.

Realised benefits

Direct benefits

The project delivered on the specific changes required by the Student Loan Scheme Act 2011 and increased effectiveness and efficiency by introducing:

  • an enhanced single information portal for borrowers;
  • a consolidated loan balance available to borrowers;
  • automated processes for transferring up-to-date information from Studylink;
  • automated processes for verifying and updating identity information; and
  • automated processes for tracking workflow between Inland Revenue and Studylink.

Ninety percent of people using the new channel services (telephone or web) use the online web portal. This is a significant step towards achieving Inland Revenue's corporate goals.

Indirect benefits

To achieve the single portal view for the borrower, Inland Revenue had to work closely with Studylink to understand the system's processes end-to-end. As a result, Inland Revenue has a much closer relationship with Studylink and each better understands the other's role in managing student loans.

Unexpected and/or unplanned benefits

The business-to-business interface has wider potential than just student loans.

Practices that contributed to realising benefits

Inland Revenue reduced the scale of its original project to deliver on time the functionality that legislation required.

To provide a portal for those with student loans, Inland Revenue had to work closely with Studylink to achieve a more sophisticated understanding of student loans. It needed to ensure that the respective responsibilities of Studylink and Inland Revenue were unchanged and that it managed information flows to support this arrangement. In the first phase of the new system, the business process changed from one transfer of 165,000 records once a year to about 6 million records exchanged, throughout the year. The process had to be automated, exceptions requiring manual intervention had to be minimised, and workflows between the agencies on any exceptions had to be managed. The new System automated this workflow management.

Inland Revenue has begun to think of the system as the forerunner of new ways of interfacing with other agencies and integrating various systems to provide customers with one integrated single portal. Student Loans is one of several government products that Inland Revenue manages in partnership with another government department. The potential of the new business-to-business interface and the lessons learned from working closely with Studylink have led to Inland Revenue thinking of applications elsewhere.

About 25% of the project team's analysts and functional designers were subject matter experts from business teams. This meant that those working on the changes understood the operational requirements and the desired changes to the borrower experience and how the Student Loan redesign needed to interface with other Inland Revenue business processes and systems. Inland Revenue believes that good people with knowledge of the business understand the changes that they are making and, therefore, deliver good results.

Changing the system was put in the context of overall corporate direction about transforming the way Inland Revenue works, including:

  • being more focused on customers;
  • being more adaptive;
  • efficiently capturing the data Inland Revenue needed;
  • providing customers with the information they needed and reducing as much as possible customers' need to call or write for further information; and
  • increasing compliance through early intervention, faster rulings, and fewer disputes.

Interdependencies were appreciated, linkages made across projects and trade-offs managed strategically by ongoing strategic overview through project reporting to a Corporate Programme Office and the Corporate Governance Board.

Project reporting included reporting on benefits realisation. The Corporate Governance Board monitors this.

Lessons for other projects

Inland Revenue treated the system redesign project as a business project, as well as a technology project. There was a clear sense of the project's interdependencies with corporate strategic goals and business transformation strategies, such as:

  • an integrated end-to-end view of the business process across organisational boundaries;
  • attractive and easy-to-use interfaces with the customer that promote use of the e-channel and reduce reliance on face-to-face or telephone services; and
  • close to real-time information to encourage customers to manage their accounts.

To deliver a consolidated customer-facing interface to student loans, Inland Revenue worked closely with Studylink to understand student loans more comprehensively.

Inland Revenue has begun to think of the system as the forerunner of new ways of working with other public entities and integrating systems to provide customers with one integrated single portal.

There was strong and continuing strategic-level overview of the project through a Corporate Programme Office and a Corporate Governance Board. This allowed links between this project and other projects and managing trade-offs on corporate resources, time, or other priorities where necessary.

All involved understood the benefits that the project would bring.

Project monitoring at a programme level focused on benefits realisation.

There was effective managing of unknowns through flexible innovation within the framework of required policy changes. The Programme Manager at Inland Revenue said:

While we started with a particular design in mind, it wasn't until we got into the project that we fully realised the complexity of the Student Loan System, the rule changes that had been implemented over the years since policy inception in 1992, and their interdependency with other parts of the system.

Inland Revenue was prepared to go back to the drawing board when necessary.

A tight timeline and "must do" delivery list to meet the legislation requirements helped focus corporate and project priorities.

Pragmatism (getting the job done to meet legislated requirements) within a strategic framework of business change resulted in more rather than fewer benefits, because those involved in the project understood what Inland Revenue wanted to achieve in the longer term.

Good people with knowledge of the business understand the changes they are making and, therefore, deliver good results: people with specialist business knowledge appropriate to the business processes being redesigned understand the system that they are designing as well as the bigger business picture. Therefore, they delivered more than just the bottom-line result.

Good practices

The main good practice learning is that going back to the "drawing board" when necessary can be critical to success. Having a clear business purpose was also a feature of the project.

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