The Benefit Delivery Modernization (BDM) program, the largest IT transformation initiative ever undertaken by the Government of Canada, was estimated to cost $1.75 billion when it launched in 2017. Five years later, the cost estimate reached $2.2 billion, and chances are it will be revised again, as delays and challenges persist, deplored Andrew Hayes, deputy auditor general, during a House of Commons Standing Committee on Public Accounts (CAPH) meeting today.
Halfway through the program’s 13 year timeline, we’re “still running on systems that are between 20 and 60 years old,” he added.
BDM is tasked with transforming how three key programs: Employment Insurance, the Canada Pension Plan, and Old Age Security benefits, are delivered to Canadians. Paul Thompson, deputy minister, Department of Employment and Social Development said that the transformed systems will be safer, agile and capable of delivering a better customer experience.
So far, Public Services and Procurement Canada (PSPC) has spent $817 million on the program, out of the $2.2 billion cost estimate, which includes $669 million in contracts with outside consultants. Four main system integrators, including Accenture, CGI Information Systems, Deloitte, and Fujitsu Consulting, account for the majority of that amount, said Thompson. And there are yet other million dollar contracts with IBM and Price Waterhouse Cooper (PwC).
“We’re approaching a billion dollars. These are astronomical figures. They’re immense, and they’re heavy for Canadians. And all this spending has led to the brutal findings from the Auditor General, warning of another Phoenix,” said NDP representative Blake Desjarlais.
A recent report from the Office of the Auditor General of Canada (OAG), in fact, showed that two-thirds of the government’s 7500 software applications were in poor health. Of those, 562 are essential to the health, safety, security, or economic well being of Canadians. Some of the systems date back to the early 1960s.
Canada’s chief information officer, Catherine Luelo, who appeared via videoconference, said, “We spend about $10 billion a year on technology, but I’m not sure this is about more money at this stage.”
The biggest challenge, she said, is a lack of skilled personnel in the public sector to carry out modernization.
“The reality is that there’s recruitment and retention challenges. It is a competitive marketplace for skilled IT professionals, which means that the government has to look creatively at how to retain and attract these people, but also has to take a good careful look at how they will train and upskill their current employees.”
Plus, she said, “we’re not paying our staff enough.”
Desjarlais added, “It’s much easier to work for IBM, it’s much easier to work for McKinsey, it’s much easier to work for these other companies that then hold the government hostage and say, ‘you will pay us because there’s no one else to do this work’, because you failed to pay our employees properly or at least a competitive rate.”
Audit after audit showed a continued pattern of outsourcing, which balloons cost while also diminishing public service, lamented Desjarlais.
However, Luelo maintained that modernization will be impossible without third party help. Hiring challenges, labour intensity and the volume of work all contribute to the decision to bring in third party firms.
Further, Luelo pointed to a lack of a central control around the disbursement of funds when it comes to modernizing Canada’s IT systems.
She explained that when she was a CIO in the private sector, she had the ability to set the strategy and then control the funding, meaning that there was a level of control when there was a sign-off on technology work that went across multiple divisions of publicly traded organizations.
“That same level of oversight [in the government] does not exist. We are in a very vertical model for many good reasons. But these are horizontal problems, and we don’t have, in my opinion, the right horizontal financial controls in place on technology investment.”
Within the government, there’s also an issue of prioritization that staggers progress, as not all issues can be addressed at once, Luelo said.
“In prioritization, there’s winners and losers, and we don’t seem to have a comfort with stopping programs or delaying them to allow us to do the work that needs to happen on the higher risk program.”
Scott Jones, president of Shared Services Canada, explained that the information upon which priority decisions are made also delays progress.
“Departments themselves are responsible for modernizing their applications,” he said. “They sometimes have to make difficult decisions with their financing because if they have to pay for modernization, it might have to come out of the funds that they would otherwise use for services or programs for Canadians.”
During the committee meeting, Luelo also addressed her recent resignation.
“I would observe within the public service, I’m used to being in meetings talking about delivery velocity, talking about budgets, talking about change management, talking about adoption, talking about ‘the doing’. And what I find is we spend more talking about ‘the what we might do’ versus actually talking about the ‘how we’re doing it and the result’, and my opinion is that needs to change.”