Ontario is about to go big on IT outsourcing

Ontario is about to launch two pilot IT outsourcing projects that it hopes will lead the way to significant cost savings as the province tries to keep spending under control.

— One project is for a unified communications system to be installed in a refurbished Toronto building that provincial staff will move into next January.

It envisions the government buying telephony as a service with virtually no hardware supplied by the winning bidder. Instead, all staff will have softphones on their PCs, which will also be equipped for video and audio conferencing.

If things go well, this pilot will be a template for rolling out a unified communications system to all provincial government offices in the greater Toronto area.

A formal request for proposals (RFP) for this pilot is about to be issued. A recent call for interested parties to submit ideas around which the government could craft an RFP drew submissions from an all-star group including BCE Inc.’s Bell Canada, Rogers Communications Inc., Telus Communications Co., MTS Allstream, Cisco Systems Inc., Avaya Inc. and Mitel Networks.

— The second project, for which an RFP was just issued, calls for a single company – or consortium – to supply all IT software development services to one of the province’s five IT clusters. The usual practice is to hire people on contract to do the work.

The two projects were among several initiatives outlined Tuesday by Ontario’s chief information officers to members of the Information Technology Association of Canada (ITAC), which represents suppliers of technology.

The province’s IT heads meet annually with ITAC to let vendors know what Ontario’s information technology spending plans are for the coming year – and to emphasize the province wants to work closely with the private sector.

Both projects detailed Tuesday have been in the works for some time and aren’t related to the spending cuts in the recently-announced provincial bugdet. In fact, David Nicholl, Ontario’s corporate chief information and information technology officer, told the meeting the budget will have no immediate impact on IT services or strategy. Still, he added, the budget acknowledged IT has a critical role to play in helping all ministries achieve their budget commitments.

In interviews after the meeting, the two people who oversee these projects explained their significance.

The unified communications pilot is part of a telecommunications modernization services plan, said Marty Gallas, corporate chief of infrastructure technology services for the province.

“This new network is looking at converging the voice and data network to improve productivity amongst the workforce, and to bring solutions that enable folks to collaborate more seamlessly than we do today.”

The platform would also allow staff to work from home, or from provincial satellite offices when necessary, he added.

The request for information from potential telecom providers included some “innovative responses,” he said, including complete cloud-based telephony.

Because fibre optic networks are extensive only in southern Ontario, the province envisions a government-wide unified communications platform would only work in the greater Toronto area – if the pilot proves there are savings.

As for the possible savings, Gallas said a cloud-based UC system could save $5 to $10 per employee per month over than what the province pays now for telecommunications.

The government should know by the end of 2013 if the pilot should be extended, he said.

Meanwhile, Rob Hollis, chief information officer for the province’s Land and Resource IT Cluster (which includes the Ministry of Natural Resources), was looking at a different problem – not enough IT staff to handle application development.

In fact, he was almost hiring as many software developers, analysts and project managers on short-term contracts a year as he had staff in his department. That just isn’t sustainable, he said.

“A big part of our work’s pretty standard, repeatable on the maintenance and support side,” he said. So it was decided to put out an RFP for a services supplier – either one integrator or a consortium – who will take work parceled out by the department.

The supplier will do the work in its offices, rather than have Hollis and his staff overseeing contractors, and deliver finished applications.

“It’s a change in the way we do business,” Hollis said. “It’s not all our work, but it’s a big chunk of our ongoing maintenance and support, to start with.”

The contract – which Hollis estimated could be worth several million dollars a year — will last three years, plus the option for two years of renewal. There’s no guarantee of volume of work – the supplier merely promises that if suitable work is sent its way it will be done at set rates.

The approach could be adopted by other departments but is first being tried in Hollis’ cluster.

“We haven’t done this in the OPS before,” said Hollis, “so we’re going to walk before we run.”

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including ITBusiness.ca and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@] soloreporter.com

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