Government Operations Committee on Feb. 13th, 2012

[The Vice-Chair, Conservative, Mike Wallace]

Thank you.

Next is the parliamentary secretary, Mr. Gourde.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you, Mr. Chair.

I'd also like to thank the witnesses for being here this afternoon.

I'd like to come back to the question asked by my colleague Mathieu Ravignat. This great exercise requires an enormous amount of skill and experience from information technology professionals from other sectors who have already gone through this kind of reorganization. But it's also important to work with federal public servants in the information technology sector because they are already on site.

If we want to gain time and save money, I personally don't see any other way than going and finding the best possible expertise outside and including it. The opposition parties might be looking for another way of doing it, but I think your study confirms fairly well that we don't need to reinvent the wheel. If it already exists in the private sector, then we should find the best example and use it within the federal government. The savings will be big, to use your words.

Is there another way of doing it or are you on the right track?

[John Chang]

We believe that a balanced approach is important. There are a lot of good examples of very competent delivery within the Government of Canada. Our recommendation is that you should leverage those areas. There is also a significant trend in the private sector in this space. I mentioned that earlier. I think it is important that you take advantage of that as well, so a right blend....

You know, the point here is that our recommendations are not asking you to make a decision today on everything. Again, this is a series of gates. As the industry evolves, you'll be able to take advantage of that in keeping options open as much as you can and not closing too many doors. That's one of the ways of mitigating risk. At the same time, leveraging what you do best internally, we believe, is a really good compromise to actually achieve what you want to do.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

I think the goal of all this work is to improve the efficiency of information technologies throughout the federal government.

When you prepared the forecasts you gave on the money we might be able to save, did you calculate the efficiency of all public servants?

Some technologies are outdated. In some departments, some of them are already 20 years old. Could our public servants work more quickly? When typing, will we still have to wait three or four seconds? Will it be quicker? Will there be a way to save time? Was that calculated?

[John Chang]

The indirect benefits of consolidation and standardization have not been included as one of the benefits in the report, but we anticipate that as you standardize across government, the service levels will be harmonized and you will be able to deliver a consistent quality, which will have spill-over impacts on the performance of other users of these systems.

I also want to mention that data centre services, as I said earlier, do not stand on their own. They are part of a networked set of applications and facilities that make up an overall IT service delivery. Those areas will also contribute not only to the success of this program but also to how the users of these systems improve their own productivity.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

I have another quick question.

Would it be going too far to say that, by improving the efficiency of all 300,000 public servants that work with information technologies, we might be able to save half an hour to an hour of work a day? In other words, 200,000 to 250,000 hours of work a day.

[John Chang]

Certainly that would be nice to have, but we have no data from that kind of analysis.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you.

[The Vice-Chair, Conservative, Mike Wallace]

Go ahead, Mr. Boulerice, for five minutes.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

I'd like to come back to the comments you made about the private sector's contribution.

You said that 54% was an objective to attain. Last week, Mr. David Nicholl from the Government of Ontario told us that, based on his assessments, the private sector often cost more than the public sector. You just told my colleague that you didn't know whether private sector technicians cost more or less than public sector ones.

If we have to find private sector expertise to get the knowledge, that's fine. When services are being consolidated and centralized, let's go and find private sector experts to train public servants and retain that expertise.

My objective would be that the public sector represent 75%, 80% or 85%, so that we have a strong public service that can take care of this service on its own, without depending on others.

Why aim to have 54% of the expertise come from the private sector? Why not 15% or 20%?

[John Chang]

As you've just described, 54% was a target that we arrived at through a very detailed analysis, taking into consideration strategic requirements, risks, and costs. It is an end state. It is a journey that you would undertake.

I will also say that the analysis included benchmarks for those specific areas that are to be considered for the 54%. We found significant data points in those areas to support our recommendation that it should be done in the private sector.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

I am concerned about keeping expertise internal because that's the best way to provide services. But that's our opinion.

We talked about potential savings of $45 million to $293 million. I'll be cautious and use the amount of $45 million. I don't tend to get enthusiastic when potential savings in major reforms like that are involved.

How many job losses in the federal public service does this represent? How many people risk losing their job?

[John Chang]

It was not our mandate to actually calculate that. As I mentioned earlier, detailed business cases are going to be considered for each of these tranches of work. I'm sure those detailed business cases will outline what the HR impacts would be.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

In the case of the cautious scenario of $45 million, could you tell us what part of those cost savings the workforce represents? Are we saving money because we're paying fewer people, or are we saving money because we made gains in technology or with the effect of volume?

[John Chang]

The current data centre services portfolio that we analyzed was about $822 million, and just below $400 million of that was labour. For the consolidation and virtualization, we believe—and we didn't do the analysis, so we can't say definitively what the HR impact would be—it would be reasonable to take a commensurate look at what the ratios would be.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

I'm asking you the following questions because, with the Conservative government, we've seen concentrations of expenses in certain constituencies for certain programs, take for example accessibility programs for people with disabilities. One of your main recommendations is to reduce the number of data centres from 300 to fewer than 20.

Do you have any recommendations for those centres? Do they already exist or will they have to be created? If we have to create new centres, where do you think they should be located?

[John Chang]

Studying the location of future data centres was not part of our mandate.

[Ivan Milam]

Let me add a clarification to that.

The data centre floor space analysis we did was in the aggregate level, meaning that we looked at the total amount of floor space the government has from the data centre perspective: the power being consumed in those data centres, the capacity in those data centres, the floor space being used in those data centres, and then the overall capacity of those data centres.

Then we looked at it and considered how much growth there was from a floor space perspective and a power perspective. John mentioned earlier that when we did the projections, it appeared there was five years of capacity left in the existing data centres. Again, that's for over 300 data centres, plus the over 1,000 points of presence.

Then we looked at it in the aggregate. We considered a situation in which the government would be able to shrink some of that floor space through virtualization and consolidation, and what that would mean. How much longer would the government get out of the existing floor space, in the aggregate? If you did the virtualization and consolidation, those would be the main factors.

We didn't then go and look at the individual data centres. I'm sure you would agree that 300 data centres is a fairly large number on which to do individual studies, so we did it at the aggregate level, and that's what you're looking at here. If you ask us questions about getting down to 20, I think those numbers are probably generated through Shared Services Canada or through a department, but we don't actually have a data centre consolidation number in this report.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you.

[The Vice-Chair, Conservative, Mike Wallace]

Thank you.

Next is Ms. Block, from the Conservatives. You have five minutes, please.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much, Mr. Chair.

I join my colleagues in welcoming you here today.

I want to follow up on a line of questioning that was being pursued by my colleague across the way. It has to do with human resources, although I think I'm going to take it in a different direction.

In your executive summary, you speak to human resources. I just want to quote from your summary. You say,

There are various human resource considerations to this project that range from the staffing of the Program Management Office and individual projects and work streams to working with the staff who will be impacted by the implementation.

Would you mind elaborating on the elements of the human resource planning with regard to this project?

[John Chang]

That's an excellent question, and you've highlighted a couple there already. First and foremost, the ability to manage and the ability to execute are critical components for building the capacity for change, so getting seasoned, experienced professionals, either from within the Government of Canada or externally--people who have had experience undertaking this type of journey--is critical to success.

In fact, if we had to highlight the most important human resource or project consideration for the success of this program, it would be that you need to have the right leader in place, with the experience and capability and capacity to execute this program. That's the capacity for change. As well, it's not just having the leader, but having a group of people staffed to manage it at the program level and provide the proper governance. That's a critical component.

The second aspect, as you mentioned, is how people will be impacted. The reality is that when you create a program for consolidation and virtualization and standardization, there will be overlaps in the work being done by people, so there has to be a rational strategy that takes into consideration people's tenure and expertise, as well as timelines for implementation at a functional level as you go into the details. You need to have a bottom-up detailed analysis of the impact on people.

I think things like that are the inputs for the detailed business case that we strongly recommend you have before you actually engage in the tranches of transformation or transition.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you. We know that besides the huge cost savings that will be achieved with this consolidation, there will also be the improvement in services to Canadians. We also know that the need to update our systems was identified, so I want to go back to the question my colleague asked with regard to weighing the benefits against the risks.

In your executive summary you stated that

In summary, the GoC has a strong opportunity to move from a federated data centre environment to a highly coordinated, enterprise service delivery model.

I'm going to suggest that we have this strong opportunity, and the need has been identified that something has to be done with our systems, so why is it important for the Government of Canada to pursue this strong opportunity at this time and not wait any longer?

[John Chang]

There are a couple of comments there. The first is what's happening in the IT industry generally, and I include public sector as well as private sector in the comment I'm about to make on the infrastructure services industry.

Earlier I mentioned the maturity and the commoditization of these services. That's both internal and external. From an industry and technology perspective, I think the maturity is there to take advantage of this. You've all heard of cloud computing and you see it in the consumer space. The technology is available today that allows that kind of offering in the marketplace. That shows the maturity of the technology. From a timing perspective, we think that's correct.

The other thing for you to consider is the case studies we shared with you. They are mostly five or six years old. A lot of the other governments—specifically Texas, Ontario, and Alberta—have embarked on this transition. A lot of lessons have been learned that you can leverage. Subsequent to that, because of those initiatives, we also acknowledge that many other governments, such as those in Malaysia, Denmark, Spain, and Italy, are embarking on a similar journey to try to take leverage of the industry maturity, and I mean both public and private sector maturity. Some other jurisdictions have also taken this journey over the last five or six years.

I would also add that the governments of the United States and the United Kingdom have announced data centre services consolidation initiatives.

[The Vice-Chair, Conservative, Mike Wallace]

Just so the committee knows, normally this would be the slot for Mr. McCallum, but he asked to be out for a few minutes, so we're going to go to Denis once, then to Scott, and then to John if he shows up. If he doesn't, we'll conclude with adjournment at that time.

Denis, you have five minutes.