Shared IT Services across the Canadian Government – three opportunities

Earlier this week the Canadian Federal Government announced it will be creating Shared Services Canada which will absorb the resources and functions associated with the delivery of email, data centres and network services from 44 departments.

These types of shared services projects are always fraught with danger. While they sometimes are successful, they are often disasters. Highly disruptive with little to show for results (and eventually get unwound). However, I suspect there is a significant amount of savings that can be made and I remain optimistic. With luck the analogy here is the work outgoing US CIO Vivek Kundra accomplished as he has sought to close down and consolidate 800 data centres across the US which is yielding some serious savings.

So here’s what I’m hoping Shared Services Canada will mean:

1) A bigger opportunity for Open Source

What I’m still more hopeful about – although not overly optimistic – is the role that open source solutions could play in the solutions Shared Services Canada will implement. Over on the Drupal site, one contributor claims government officials have been told to hold off buying web content management systems as the government prepares to buy a single solution for across all departments.

If the government is serious about lowering its costs it absolutely must rethink its procurement models so that open source solutions can at least be made a viable option. If not this whole exercise will mean the government may save money, but it will be the we move from 5 expensive solutions to one expensive solution variety.

On the upside some of that work has clearly taken place. Already there are several federal government websites running on Drupal such as this Ministry of Public Works website, the NRCAN and DND intranet. Moreover, there are real efforts in the open source community to accommodate government. In the United States OpenPublic has fostered a version of Drupal designed for government’s needs.

Open source solutions have the added bonus of allowing you the option of using more local talent, which, if stimulus is part of the goal, would be wise. Also, any open source solutions fostered by the federal government could be picked up by the provinces, creating further savings to tax payers. As a bonus, you can also fire incompetent implementors, something that needs to happen a little more often in government IT.

2) More accountability

Ministers Ambrose and Clement are laser focused on finding savings – pretty much every ministry needs to find 5 or 10% savings across the board. I also know both speak passionately about managing tax payers dollars: “Canadians work hard for their money and expect our Government to manage taxpayers dollars responsibly, Shared Services Canada will have a mandate to streamline IT, save money, and end waste and duplication.”

Great. I agree. So one of Shared Service Canada’s first act should be to follow in the footsteps of another Vivek Kundra initiative and recreate his incredibly successful IT Dashboard. Indeed it was by using the dashboard Vivek was able to “cut the time in half to deliver meaningful [IT system] functionality and critical services, and reduced total budgeted [Federal government IT] costs by over $3 billion.” Now that some serious savings. It’s a great example of how transparency can drive effective organizational change.

And here’s the kicker. The White House open sourced the IT Dashboard (the code can be downloaded here). So while it will require some work adapting it, the software is there and a lot of the heavy work has been done. Again, if we are serious about this, the path forward is straightforward.

3) More open data

Speaking of transparency… one place shared services could really come in handy is creating some data warehouses for hosting critical government data sets (ideally in the cloud). I suspect there are a number of important datasets that are used by public servants across ministries, and so getting them on a robust platform that is accessible would make a lot of sense. This of course, would also be an ideal opportunity to engage in a massive open data project. It might be easier to create policy for making the data managed by Shared Service Canada “open.” Indeed, this blog post covers some of the reasons why now is the time to think about that issue.

So congratulations on the big move everyone and I hope these suggestions are helpful. Certainly we’ll be watching with interest – we can’t have a 21st century government unless we have 21st century infrastructure, and you’re now the group responsible for it.

14 thoughts on “Shared IT Services across the Canadian Government – three opportunities

  1. deadsquid

    They tried this once before with GTIS. It was an abysmal failure, and I can see the consolidation of existing IT into a central service being even worse. Government IT needs to look at themselves as enablers rather than gatekeepers, and as a client service group rather than a policy maker. Starting off with a “one system for everything” approach in the PR surrounding the move makes me think this initiative will be about as effective cost-wise as amalgamation in Ottawa was.

    Reply
  2. Chris Moore 

    David, great points my tweets today to the MP’s was to encourage them to embrace the #cloud, #BYOD – Bring your Own Device, as well as open source, much like your open data comments.  I also encouraged them to have a strong leader, this whole effort will be up against the VERY strong culture of the #GOC, culture eats Strategy.  I also encouraged them to look at transparency in their whole transition, much like the US Federal CIO Vivek Kundra did with the IT Dashboard.

    Also in a DM with Minister Clement I suggested doing as we are doing setting up an advisory board of external experts to advise.   This also creates an additional level of accountability.

    As we both know many EYES will be watching both within and from outside the #GOC.

    Reply
    1. Neil Mcevoy

      That’s right on the nose Chris. There’s an obligation on Government to eliminate wasteful spending of taxpayers monies and clearly with so much duplication of different email systems, data-centres etc., there’s lots of low hanging fruit to do exactly that.

      Cloud services have now matured such that they offer real, practical tools for achieving this consolidation, and better yet, doing so will help catalyze the Cloud industry in Canada, tackling the other major issue – A lack of ICT innovation in Canada, and an associated poor economic dev strategy. Growing a Government Cloud outsourcing market in Canada will yield a double-whammy of big savings + NEW international growth.

      Strong leadership and an external board of advisors is indeed the key to ensure this is approached in a robust and results-oriented manner. We can’t let lethargic culture hold up benefit for taxpayers.

      This is our goal with the Canadian Cloud Council : http://www.cloudbestpractices.info/Canada

      Neil.

      Reply
  3. Doug Bastien

    Sadly and unsurprisingly, in practice, there is no direct correlation between centralising services and realising cost benefits. Despite many attempts before to centralise services, the result hasn’t resulted in cost savings, but the opposite. The reason is the very framework of shared services; a broken procurement model that:
    rewards unintegrated systems,blocks open-source and free options,is built on reinforcing sustainability of the framework for increasingly greater financial rewards.I’ve written more in my blog post on this here: http://blog.dbast.com/?p=1012

    Reply
  4. Canuck

    The most promising services for centralization are commodity services like email, instant messaging, directories, and file servers.  These are pretty-much standardized (though people can still screw them up, say, by trying to use Microsoft Exchange).  As soon as you get into non-commodity stuff like a CMS or (god forbid) and ESB, you’re asking for failure.

    Reply
    1. David Eaves

      Canuck – completely agree. It’s a fine line you have to draw to make this work. I think there are examples that swing all directions (total failure, to large savings and improved outcomes) but generally the stuff you point is the right starting point – which is what the government announcement has focused on.

      As Chris points out… a lot of people will be watching this closely.

      Reply
    2. FrankT

      I think Exchange is probably best-of-breed actually… a bigger win for Microsoft than Windows itself. Although it’s become complicated enough with it’s fancy high-availability features to only make sense for large customers. Small orgs are being pushed to Microsoft’s cloud offering.
      Anyway a lot of departments have custom applications that interact with their email systems in inconsistent ways. It would probably be nicer if they all used very standard interfaces but the point is that it will cost money to change everything. It also ties very heavily into workflow for even simple tasks like booking a boardroom or shared projector, done differently at each department. So I fear this new IT agency will have to start teaching people new ways to work. I think consolidating email should have waited until networks and data centres were lined up, but anyway I look forward to being part of the adventure. ;) Synchronizing directories and providing a standard @gc.ca alias would have been an easier first time… and that might be what happens first anyway.

      For non-commodity stuff I think the network and data centre consolidation will open up consolidated storage area networks and virtualization platforms. Then all the weird apps can be virtualized into the private GC cloud, and still be managed by specialists in the individual departments without them having to worry about the plumbing. The mega-departments will still need their mainframes though. They are the original private cloud in a manner of speaking anyway.

      Reply
  5. csedev

    Experience has taught me that the cost from department to department for shared services, like a hosting a web application, is often outrageous and prevents innovative projects from happening.   (For example, PWGSC currently offers a space on their web servers for $50,000 per year)

    Not only will the costs be prohibitively high, but I also assume the process required to setup these new services, like a web server or database, will also become very time consuming and bureaucratic. 

    So, although centralizing our information technology services may appear beneficial, without careful design, process planning, and implementation, this new department may become another bottleneck in our governments ability to innovate.

    And given that the STIC has rated Canada as below international standards in regards to innovation, I don’t think we can afford to let it fall even further.

    Reply
  6. Anonymous

    This focus upon shared service as a method to save money will massively increase costs and worsen services. All of the arguments made for sharing come from within the shared services industry (IT companies, consultants, or think tanks funded by companies selling shared services). All of the so-called evidence is based upon estimates, projections and surveys. No real data.Professor John Seddon, an expert in service organizations with extensive experience in public sector systems says that there are two arguments for sharing services. The ‘less of a common resource’ argument and the ‘efficiency through industrialisation’ argument.The former argument is ‘obvious’: if you have fewer managers, IT systems, buildings etc; if you use less of some resource, it will reduce costs. But the reductions are often minor and one-off.The second argument is ‘efficiency through industrialisation’. This argument assumes that efficiencies follow from specialisation and standardisation – resulting in the creation of ‘front’ and ‘back’ offices. The typical method is to simplify, standardise and then centralise, using an IT ‘solution’ as the means.The problem with the industrial design is simple – it doesn’t absorb variety in demand. Because of this, costs soar as the IT system has to be modified and customers ring back again and again because they can’t get what they want. The evidence of this flawed theory can be found everywhere. In HMRC or South West One shared services which predicted savings of £176 million over 7 years and actually recorded a pre-tax loss over its three financial years. Duplicate payments sitting at £772,000 and a struggle to manage £12.9m in outstanding debts.

Last month Western Australia followed Queensland in ending its shared services. It was claimed that it would save $58 million a year and instead cost $444 million dollars (no savings). It is estimated that it will cost taxpayers between $1 – $2 billion dollars to rectify.In the UK there is general acknowledgement now that these big shared services projects (and especially big IT projects are doomed). And whilst shared services is being pushed from within the UK Cabinet Office (staffed by former members of the financial consultancies who used to sell these services) these projects will in 5-6 years time run full cycle and quietly be abandoned. Howard ClarkThe Systems Thinking Review

    Reply
  7. Macs45

    This announcement is a hilarious to say the least…  A political move that “sounds nice”, but does absolutely nothing but cost more…  Seriously, they say that they’re going to save money.  How is that possible?  Stop thinking small people.  Think of the effect this will have on our local economy.  Yes, you will save $ in acquisition costs because all of the manufacturers will be selling the equipment below cost since the purchases will all be big RFPs or RVDs.

    1. Bulk buys = less acquisition costs. (Good right?  Not really, keep reading)
    2. Bulk buys = eliminating the middle man (resellers)
    3. Bulk buys = one winner take all
    4. Bulk buys = approx. 3000 private sector workers without a job.
    5. Bulk buys = approx. 5-7000 Government workers without a job

    I could go on…  But seriously  think about how much money will be lost in unemployment cheques and welfare cheques after you put close to 10,000 Canadians out of a job. 

    At the end of the day, the Government gets most of the money the spend back in taxes every year.  In situations like this, you’re damned if you do and damned if you don’t.  On paper to the uneducated and unaware average Joe Public, it looks great to see that the Government is saving money…  but at the end of the day, it’s a vicious circle and this “change” will hurt more than anything.

    When it takes 5 years to upgrade something as basic as the next Windows operating system on desktops, how long do you think it’ll take to consolidate 300 datacenters down into 20?  How much is that going to cost?  Who is going to get the money for doing it?  I know…  The massive U.S. owned companies that will take the money out of the country with them.

    LOL…  Hilarious!

    Reply

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