State of South Carolina UCC Online Digital Government: Government to Business

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1 Application Title: State of South Carolina UCC Online NASCIO Category: Digital Government: Government to Business Project Initiation Date: April 2009 Project Completion Date: May 2011 Contact: Melissa Dunlap, Chief of Staff, SC Secretary of State 1205 Pendleton Street, 5 th Floor, Columbia, SC Phone: (803) mdunlap@sos.sc.gov Approval Contact: Barbara Teusink, Deputy Division Director of the Division of State Information Technology. Phone: (803) bteusink@cio.sc.gov

2 Executive Summary UCC Online is offered by the SC Secretary of State s Office (SOS) and allows businesses and citizens to file, search and retrieve UCC documents electronically. The existing back-end system was replaced with a Web-based system for managing new and existing UCC filings. UCC Online provides: Web-based interface for real-time submission of UCC filings with screen wizards and help links and immediate filing confirmation and acknowledgement copy Quicker UCC Search processing time and immediate search results with certified and non-certified documents Convenient 24/7 access Secure payment processing by debit or credit card, or monthly billing In-house filing, document management, reporting tool Bulk data service allows authorized account holders to electronically access corporation, UCC and notary bulk files SOS staff operational efficiencies and reduction in lost revenue through the new online service and business processes This web-based application was built at no cost to taxpayers through a partnership between the Secretary of State s Office and SC.gov. By providing this application through the SC.gov partnership, SOS benefited from a cost avoidance of $744,000 for software and hardware costs. SOS staff time spent performing UCC filings and searches has been significantly reduced. The delay normally experienced by customers from having to mail in filings is eliminated. UCC Online is a best of breed solution and a model for UCC filing, searches and document retrieval going forward. The majority of the information is database driven and can be managed through the database and/or the administrative tool. Configurable options include filing types, filing fees, rejection reasons, and system messages. Form templates used to return acknowledgement copies to users were created from standard IACA UCC forms. In 2012, UCC filing online adoption is 18% and online UCC Searches adoption is 96.4%. There are currently 171 active subscribers using the UCC Online service. Our goal in the design of UCC Online was to create a convenient and reliable method for customers to file, search, and retrieve UCCs with around-the-clock access. This new service will greatly benefit those who need our services, as well as the citizens of South Carolina. - South Carolina Secretary of State Mark Hammond.

3 Business Problem and Solution Description Problem Statement The SC Secretary of State (SOS) set out to accomplish two things with this solution: 1. Increase customer satisfaction a. Online survey results from the SOS web site indicated that 11% of customers who were unsatisfied with the agency specifically mentioned not having online access of UCC images as the reason for their dissatisfaction. 2. Reduce the manual labor involved in processing Uniform Commercial Code filings. a. Documents could only be filed in person or by mail. Images of filings could only be obtained by submitting a request to the SOS office and waiting for them to be mailed to the customer. Filing and searching documents and mailings were a very labor intensive process for SOS staff. Barriers/Challenges/Opportunities Documents could only be filed in person or via mail. Once the documents are received at the SOS office, the documents are given a unique identifier, reviewed and then scanned by SOS personnel. Key data fields are then typed into a database for search capabilities. Search capabilities existed on the previous SOS web site. Parties could search by document number or name of debtor or secured party. However, images of the filings could not be retrieved through this web site. Instead, a request had to be submitted to the SOS office and staff would then search, retrieve, copy and mail the requested documents. Sensitive data redaction was a manual process performed SOS staff. The SOS staff currently uses a third party client-based electronic document management system (EDMS) application to manage UCC filings. The SOS maintains several databases. Frequently, the public and businesses request bulk data information in the form of queries from these databases. The requestor must provide a self-addressed and protected CD envelope for the requests that are delivered via US Postal Mail. Purchases are made through a pre-funded debit account, cash or check. Personnel and budget resources were also barriers and challenges. The SOS staff does not have an IT department for management, design, development, quality assurance and ongoing maintenance of software applications. The SOS did not have the budget to replace their existing systems or the personnel to build and maintain a new system. The SOS evaluated a partnership with SC.gov to provide a solution for the issue at hand. SC.gov is the official Web site of South Carolina government and a collaborative effort between the State and South Carolina Interactive to enable them to conduct state business online and improve public access to government information. This web-based

4 application was built and is maintained at no cost to taxpayers through a partnership between the Secretary of State s Office and South Carolina Interactive, doing business as SC.gov. Solution These goals were accomplished when the SC Secretary of State s office in partnership with SC.gov launched UCC Online by replacing the existing UCC back-end system with a new Web-based system for managing new and existing UCC filings and providing the public user with a new Web-based user interface for submitting a UCC filing online and obtaining search results immediately. UCC Online is an application suite with the following modules bundled together: 1. In-house filing tool; 2. In-house document management tools; 3. In-house application management tools; 4. In-house reporting tools; 5. Premium bulk data service which enables authorized account holders to electronically access corporation, UCC and notary bulk files on demand; 6. Public web-based user interface for submitting a UCC filing (UCC-1, In Lieu of Continuation, UCC-3 and UCC-5) on-line with immediate filing confirmation and acknowledgement copy. 7. Immediate search results with certified and non-certified document retrieval process relating to UCC-11 filings. The ASP.NET application utilizes three (3) servers dedicated solely to the SC SOS applications. The current environment uses load balancing between two of the servers to serve up the application to users and the third server is a dedicated SQL server. Microsoft s Active Directory is used to manage SC SOS and subscriber user accounts. SC.gov took custody of the legacy data and converted the non-relational data into a relational database for UCC Online. The database is now maintained by SC.gov and the SC SOS is provided read-only access to run custom queries and view data. SC.gov houses both redacted and non-redacted UCC documents. Access to non-redacted images is provided to SOS staff only through the document management tool. Legacy images are stored in a.tiff format. SC.gov used Atlas Dot Image commercial software to convert these images to PDF. All data modifications made through the Public interface and in-house filing and management tools are tracked for audit and quality control purposes. The majority of SC SOS legacy documents had not been redacted to remove social security numbers and tax ID numbers from multiple locations on the UCC forms. SC.gov contracted with Extract Systems for the redaction of social security numbers and tax ID numbers. Extract Systems also completed a manual verification process of the redacted images to ensure a higher overall accuracy rate.

5 Customers submitting filings or requesting document retrieval may sign up for a subscriber account and be billed monthly or pay instantly using any a debit or credit card. Credit card processing is handled through NIC s proprietary payment processing engine that meets all standards for PCI/DSS compliance. Users who choose to file using the public interface are taken step-by-step through the filing process to ensure accurate and efficient filings. Help links are provided and users immediately receive an acknowledgment copy of the filing. UCC searches can now be performed online and customers receive their results immediately. Many states already offer UCC search and filing solutions. UCC Online is a best of breed solution and a model for UCC filing, searches and document retrieval going forward. The application is highly portable since the majority of the information that would vary from state to state is database driven and can be managed through the database and/or the administrative tool. Configurable options include filing types, filing fees, rejection reasons, and system messages. Form templates used to return acknowledgment copies to public users were created from standard IACA UCC forms. The solution is based on business, policy, and technical challenges that were presented to us and we created and have provided the next generation of UCC search and filing services that save time and money for the state. Communications Plan A go-to market strategy was implemented in an effort to drive customer adoption through the stages of the application lifecycle (awareness, launch, post-launch). Examples of activities include: SOS included Coming Soon announcements in all correspondence, filing documents, search results mailed out in March and April 2011, and when the service was implemented, announcements, newsletters and membership e-blasts were sent to the SC Bankers Association, SC Bar, SC State Chamber of Commerce and Columbia Regional Business Report. 4. Significance Beneficiaries: Businesses, citizens and the SC Secretary of State s office benefit from this online service. Secretary of State customers wanted the ability to search, retrieve, print and file UCC forms and have Internet access to bulk data files. Current customers such as financial institutions, corporations, law firms, and accountants have requested these services and now they are available around the clock. Customers now have the option to use additional payment channels that include debit cards, credit cards, and subscriber accounts. Customers and the Secretary of State's office benefit from a publicly accessible automated filing and retrieval system and publicly accessible bulk data files. The application contains screen wizards to ensure accurate and efficient filings and help links on each page. Customers receive immediate filing confirmation and immediate search results.

6 The Office of the SC Secretary of State was able to accomplish two strategic goals by providing this online service: reduce costs and provide the public with effective around the clock service via the Internet. Innovation resulting in improved government operations: The in-house filing tool allows SOS staff to process paper filings quickly, efficiently and accurately. Debtor and secured party pages feature a lookup tool that allows the selection of an existing party name from the database. As the party name is entered, the list of matching results narrows with each key stroke, and upon selection of an existing party, all fields on the party page are populated. Atlas Dot Image software was integrated so that the scanner detects if the document is a 1- or 2-sided document and scans the filed document appropriately. When a search was requested, the SOS staff would perform the search, print the documents, count the pages of each document to calculate the search fee, write an invoice and send the search documents and invoice back to the customer. Using UCC Online, search requests submitted to the SOS office can now be saved when completed, and the customer is notified via of the amount due. SOS can now the customer a link to the search results instead of printing and mailing them. The document management tool provides the ability to upload missing images into the database. With document lookup, SOS staff can look for any filing using a filing number or party name. SOS staff can view the actual image, the image, and for online filings, view the receipt. For searches, the search response and requested images are available for SOS staff to view or resend to the customer. Users who chose to file using the public interface are taken step-by-step through the filing process to ensure accurate and efficient filings. Help links are provided and users immediately receive an acknowledgment copy of the filing. This is a completely handsoff approach for data collection, validation, and back-end processing of UCC filings and searches. 5. Benefit of the Project Customer centric: The ability to search, retrieve, print and file UCC forms are available around the clock. Customers receive immediate filing confirmation and immediate search results. Customers can now use additional payment channels that include debit cards, credit cards, and subscriber accounts. Government Operations: Reduction of staff time spent performing UCC filings and searches thus allowing them to focus on other responsibilities. Revenue lost annually from unpaid invoices has been reduced. Staff inefficiencies have decreased now that the application performs all financial calculations and payment is made at the time of the transaction or billed rather than manual calculation of fees and invoicing customers. Security: All applications within which sensitive data is transmitted are performed using the Secure Socket Layer (SSL) protocol using the registered SSL certificate.

7 Data for this application is stored using a secured SQL database. Customer access to bulk data files is through a SFTP site. Credit card processing is handled through NIC s proprietary payment processing engine that meets all standards for PCI/DSS compliance. To protect data, each page has a time limit placed upon it, when the limit is exceeded without any activity occurring, the page will forces automatic session logout. Usability and Accessibility: Each page contains screen wizards to ensure accurate and efficient filings. Many pages within the application have associated Instructions and help links. A progress indicator displays the current step of the user experience and lets them know how many steps are remaining. A user guide is available online to assist in becoming familiar with system. Users may contact the SOS office or SC.gov for assistance. All pages meet Section 508 accessibility, W3C and HTML 4.01 standards. Privacy: A contract was entered into with Extract Systems for the redaction of social security numbers and tax ID numbers. Extract Systems completed a manual verification process of the redacted images to ensure accuracy of the sensitive data redaction. SOS can access non-redacted images through the document management tool. All data modifications are tracked for audit and quality control purposes. Transferability: UCC Online was developed to comply with current International Association of Commercial Administrators (IACA) standards. South Carolina has actively worked with New Jersey and West Virginia in sharing business knowledge, lessons learned, database schema and source code. South Carolina has also worked with Arkansas to share business knowledge to develop the web service API for the XML filing solution. Outcome Our anticipated usage rate was 50% adoption for online UCC filings and 70% adoption for online searches. We also aimed for 20 new subscription accounts for monthly billing for the UCC online service. In 2011, online UCC Filings averaged 15.4% adoption. So far in 2012, UCC filing online adoption is averaging 18%. The addition of the XML filing solution that will be implemented in June 2012 will increase the online adoption for UCC filings and is predicted to exceed 50%. In 2011, online UCC Searches averaged 93.4% adoption. So far in 2012, UCC search online adoption is averaging 96.4%. A year after implementation we currently have 171 active subscribers using the UCC Online service. Financial By providing this application through the SC.gov partnership, the SC SOS benefited from a cost avoidance of $544,850 for initial development, $85,000 for ongoing maintenance and enhancements and $114,000 in hardware costs. The cost avoidance will continue to grow as enhancements and ongoing maintenance will continue to be provided through the SC.gov partnership. We are already currently working on adding additional administrative reporting capabilities to the application and an XML filing solution for subscribing customers to help increase online adoption. The XML filing solution is scheduled to be implemented in Q