Title of Nomination: Dakota Fast File Project/System Manager: Tom Leckey Job Title: Deputy Secretary of State Agency: Secretary of State Department:

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1 Title of Nomination: Dakota Fast File Project/System Manager: Tom Leckey Job Title: Deputy Secretary of State Agency: Secretary of State Department: Secretary of State Address: 500 East Capital Ave. City: Pierre State: SD Zip: Phone: (605) Fax: (605) Category for judging (please list only one): Innovative Use of Technology Person nominating (if different than above): Francis Taft Phone: (605) Fax: (605)

2 Executive Summary: Dakota Fast File The South Dakota Bureau of Information and Telecommunications (BIT) has taken advantage of software technology and data processing techniques to integrate client/server technology with a legacy mainframe application to benefit the State of South Dakota. BIT used Entire Broker, a component of Software AG s EntireX, to interface between a Visual Basic application utilizing a SQL database and a mainframe Natural/ADABAS system for the South Dakota Secretary of State s Uniform Commercial Code (UCC) lien filing system. With this interface in place, BIT was able to develop an Internet front-end to make the entire process a paperless process and one that puts the data entry function in the hands of the public. This filing process was named Dakota Fast File. With this innovative use of technology, BIT was able to extend the life of a legacy mainframe application without modifying it and shift the data entry, data maintenance, and data query burden to the public while giving them greater access to data in the process. The original UCC filing system operated in a paper environment. Debtors that obtain loans through financial institutions sign UCC documents listing collateral, legal descriptions, identification numbers, and mailing addresses. The financial institutions are required to file the documents with the Secretary of State s Office where UCC personnel performed data entry functions to store the information in a mainframe database. After the initial filing, financial institutions are able to file amendments, continuations to extend the filing expiration date, partial releases on collateral, assignments of the liens to other parties, terminations on documents, certified searches on filings against debtors, and to query debtor information. All of these functions required UCC staff time to perform data entry, research, copying, and public interaction. The Dakota Fast File system eliminated the high volume of paper shuffling and created an electronic transfer of information. Since Dakota Fast File went into production July 11, 2000, the response has been overwhelming. The original goal was for on-line filing of 50% of all UCC documents by January They met the average of 50% by October 15, The Secretary of State s Office has received these benefits: Reduction of one full-time salaried position Reduction of approximately $12,000 in annual postage Reduction of approximately 50,000 transaction by SOS staff per year by shifting the data entry responsibility to the financial institutions UCC filings are reflected immediately on the mainframe and SQL databases Shifted the burden of the responsibility for data entry accuracy to the financial institutions

3 2001 NASIRE Nomination: Dakota Fast File Description of Project The South Dakota Secretary of State s Office saw the need to make their Uniform Commercial Code system more efficient, less labor-intense, and less costly to state government. They decided to pursue the task of web enabling the legacy mainframe system using new technology. The Uniform Commercial Code (UCC) is a compilation of statutes designed to perfect commercial transactions and to promote uniformity among various filing jurisdictions. Notwithstanding their complexities, commercial transactions basically involve the sale of and purchase of goods. Under the UCC, financing statements are filed to make a public record of secured transactions between a debtor and a secured party. The financing statements are extremely important in establishing priority among creditors in judicial proceedings, including bankruptcy, to determine rights of conflicting creditors. Therefore, the fundamental objective of the UCC is to provide measures to protect the debtor and the secured party by filing a financial statement in the proper jurisdiction under uniform provisions. South Dakota is one of 50 states, plus the District of Columbia that has adopted the Code. The Code became effective in South Dakota on July 1, Title 57A of the South Dakota Codified Laws (SDCL) contains the statutes known as the Uniform Commercial Code. SDCL 57A-9 is the Uniform Commercial Code Secured Transactions. The South Dakota UCC filings are stored on the mainframe in an ADABAS database file. The application uses Natural to maintain the ADABAS file. The staff at the South Dakota Secretary of State s Office manually processed about 100,000 UCC filing per year prior to Dakota Fast File. Dakota Fast File is an Internet-based Visual Basic application for Uniform Commercial Code filings in the State of South Dakota. It uses Entire Broker, the centerpiece of Software AG s EntireX, as middleware between the Visual Basic application and the legacy mainframe system. Entire Broker manages communication between software components in a heterogeneous distributed processing environment. This software acts as an intermediary between participants in the application. This category of software is known as middleware. Entire Broker waits for calls from participants, such as the PC. Once it receives a call, it passes the data to the proper receiver, such as the mainframe. The receiver performs the necessary function and relays data and status messages back to Broker. Broker, in turn, directs the data back to the originating caller. The Secretary of State s application currently uses two Software AG pieces with EntireX: EntireX 5.3 ActiveX Broker Component and Entire Broker 5.3. EntireX has been portrayed as the software package that will revitalize new application development in mainframe systems.

4 Components of EntireX With Entire Broker as the Centerpiece The benefits of Entire Broker are increased productivity, reduction in upload/download processing, reduction in network overhead, time-out management for blocking and non-blocking operations, message holding until the sender releases them, and secured data through data encapsulation. The thin client Internet user front-end portion of the Secretary of State s project was developed using Visual Studio/Interdev software, Java script, and active server pages (ASP) to develop the web pages. Visual Basic Script was used to develop the server-side and Java Script was used to develop the client-side of the application. The user front-end application is housed and run from a state server. SQL 7.0 tables provide support in maintaining additional information utilized by the client-side application. The user front-end goes through the Internet and firewall to call Entire Broker and pass information through Entire Broker to the mainframe. A service that runs for a specified period during the day calls Entire Broker. Entire Broker communicates with the mainframe using Natural programs. The Natural programs carry out requested functions such as storing, updating, deleting, and querying information from the mainframe ADABAS files. The mainframe passes error messages and requested information back to the Internet via Entire Broker. The existing UCC system was an existing on-line legacy system. Modifications were made to the existing on-line functions to web-enable the system and to allow the service program to operate through a mainframe batch job process. The on-line mainframe system will continue to operate on-line for the Secretary of State s Office to perform daily transactions as well as to operate on the Web for financial institutions.

5 Financial institutions that subscribe to the Secretary of State s UCC Internet service need Internet Explorer 3.0 or higher or Netscape Navigator 2.0. The Internet UCC application software is downloaded from the server. The subscriber needs some type of zip software on their PC such as WinZip, Pkunzip, or EasyZip2000. The printing functions flow through the client-side printing set-up. The Dakota Fast File system is housed on a secured web server site using a digital encryption certificate to encapsulate the data being passed between the subscriber and the state web server. The Secretary of State s Office maintains the application security system. The mainframe and SQL data is secured using BIT security standards and procedures. The Dakota Fast File logs the activity on the system. Logs provide information on the users of the system in regard to the date, time, Internet provider address, user name, documents accessed, and transactions that were processed during specified timeframes. The goal was to shift the data entry process from the UCC staff to the financial institutions. This goal has been obtained. Approximately 60% of the UCC transactions are now performed via Dakota Fast File. This percentage of on-line transactions continues to increase as financial institutions are discovering the benefits of the system. Another added bonus with the integration with the Web is that the filings will be reflected immediately on the mainframe; whereas, when the financial institutions mail the filings to the Secretary of State s Office it may take almost four days for the information to be entered onto the mainframe. This time considers mail-processing and office-processing time. Relative Significance to the Improvement of Government Operations The greatest significance to the improvement of government operations is the ability to process UCC transactions faster and to provide a greater amount of services to the public at a lower cost to state government. The UCC filings are stored on the mainframe system instantly. No longer is there a 2 to 4 day delay due to mail service. If a new filing is added via Dakota Fast File within the minute any bank in the state searching on that debtor will have the lien included in their listing. Benefits realized by Service Recipients, Taxpayers, Agency, or State The benefits of using Entire Broker in the Dakota Fast File system are increased productivity, reduction in upload/download processing, reduction in network overhead, time-out management for blocking and non-blocking operations, message holding until the sender releases them, and secured data through data encapsulation. Since Dakota Fast File went into production July 11, 2001, the Secretary of State s Office has reaped the following benefits as a state agency: They met their initial goal of transferring at least 50% of the routine staff data entry to the financial institutions by October 15, Their original goal was to meet this mark by January. This will account for approximately 50,000 transactions per year. The percentage of on-line transaction continues to increase. Eliminated one full-time salaried position. Reduced annual postage expense by approximately $12,000. UCC filings are reflected immediately on the mainframe database. Shifted the burden of the responsibility for accuracy to the financial institutions. Reduced staff time handling phone calls dealing with debtor collateral searches.

6 The Office of the Secretary of State is not the only entity that has seen a positive result in the development of the Dakota Fast File. Since the financial institutions were included during the entire planning and development stages of Dakota Fast File, the system was tailored to meet their needs and are experiencing cost rewards of their own. Previously, the financial institutions were calling the Secretary of State s Office to inquire on debtor filings. Some institutions had to call twice before terminating any UCC document. By utilizing the Dakota Fast File for searches on debtors, the financial institutions are saving on long-distance phone expenses, postage, and approximately percent of their administrative time dealing with UCC filings. The primary benefit is that they no longer have to wait the 2-4 day period before their lien is filed on the mainframe database. Their liens are made secure immediately. This reduces or even eliminates the risk that another bank may file another lien on the debtor s collateral prior their lien filing. The financial institutions can use their staff time more efficiently. What once required at least a half a day to file fourteen terminations now takes less than five minutes. Due to other built in features on the Dakota Fast File utilizing SQL 7.0 databases, the data entry personnel has a reduced amount of data entry. For example, they may store lengthy legal and UCC collateral descriptions that they repetitively use when processing UCC lien filings. With a click of a button, the description is patched into the UCC lien filing. The financial institutions have an option to use the tickler system. The SQL-based tickler system displays to the user the lien filings that expire within a certain timeframe. There is a link to the UCC continuation function to continue the selected document so that the document does not expire. If the document is allowed to expire the collateral may legally be released. Return on Investment, Short Term/Long Term Payback Dakota Fast File has been an asset in Uniform Commercial Code filings for the South Dakota Secretary of State s Office and the financial institutions that deal with UCC filings in the State of South Dakota. The payback for the investment may not be apparent to all at first glance, but a comparison between future and past expenditures clearly displays the savings. The South Dakota Secretary of State s Office spent approximately $132,000 to develop the Dakota Fast File system. They have had been able to save on salary and postage expenses. Revenue has been received in the form of subscriptions to the Dakota Fast File. Dakota Fast File Financial Statement Year 1 Year 2 Development Cost $132,000 $0 Savings: One full-time Employee Salary & Benefits $21,500 $22,200 Approximate Annual Postage $12,000 $12,000 Total Savings $33,500 $34,200 Revenue: One year of subscriptions to DFF $99,600 $119,600 Total Savings and Revenue: $133,100 $153,800 Total Return on Investment: $1,100 $153,800

7 To use the Dakota Fast File system, the subscriber needs to register for a subscription to the Dakota Fast File system and needs to set up a prepaid account with the Secretary of State s Office. A prepaid account is similar to a debit account where the Secretary of State s Office is paid up front. The Secretary of State s Office retains the funds in a special account. Once the financial institutions execute certain transactions that require a fee, the funds are drawn out of the prepaid account and deposited into the proper receipting account. Currently, there are 155 South Dakota banks that have prepaid accounts at the Secretary of State s Office that are registered for the Dakota Fast File system. There are still 86 South Dakota Banks that are not signed up for Dakota Fast File that hold prepaid accounts at the Secretary of State s Office. Previously the Secretary of State s Office had to process the UCC lien filing by opening the mail, date stamping the document, microfilming the document and attachments, manually entering the data into the mainframe system, and send the original document back to the filing entity. The Dakota Fast File system has automated the system and has reduced the manual data entry by approximately 50,000 transactions per year. The success of the Dakota Fast File has set the South Dakota Secretary of State s Office as the leader in web-enabled UCC systems in the nation. They are currently working with other federal and county entities to further develop the Dakota Fast File as a central lien-filing repository in the state. The Secretary of State s Office is also interested in pursuing the same functionality using Entire Broker in other legacy mainframe systems that house similar data for their agency.