In business, government, and basically any other arena, extremes generally have negative, unintended consequences.

Take the case of Indiana’s welfare system. In late 2006, after concluding that inconsistencies and fraud riddled the Family and Social Services Administration, Gov. Daniels awarded IBM a $1.16 billion, 10-year contract to automate welfare applications and services.

IBM and the state then dismantled a model that was based on individual caseworkers working with welfare applicants at community sites. They replaced it with a centralized, privatized system that relied heavily upon automated call centers and online registration.

The Daniels administration touted the new system for efficiency, fairness and consistency. But those in 12 test counties — Madison County included — found it to be arbitrary, inaccessible, slow and downright frustrating. The new system eventually served 59 counties and about a third of the state’s 1.2 million person welfare case load. But applicants complained that, in addition to ferreting out abuses of the welfare system, the new model penalized people who legitimately qualified by punishing wrong turns in a perplexing application process.

This month, the administration, pressured by class-action lawsuits, announced that it would discontinue the contract with IBM to manage state welfare. Instead, the state will manage the welfare system by turning to a combination of the old caseworker-based model and some features of the call-center and online-registration model.

After all of these missteps, the state finally appears headed in the right direction. The old system offered face-to-face interaction for those who were seeking food stamps, Medicaid or other benefits but didn’t fit neatly into a particular eligible or non-eligible category. It also provided an important combination of counseling and registration direction. Its weakness was the uneven disbursement of aid, sometimes at the whim of local frontline FSSA employees.

The recently debunked system did offer the opportunity for do-it-yourself form filing, which some folks prefer. It also offered a greater measure, theoretically, of policy consistency across the state.

The new system, currently under development by the state and due for public disclosure Dec. 14, could provide better accessibility and better solutions — if it’s formatted and managed correctly.

When it comes to the state’s handling of welfare, that’s always a big “if.”