Government Operations Committee on Feb. 6th, 2012

[David Nicholl]

We were much smaller.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Right, so basically ten times the....

When you're looking at different mailbox servers for the 100 different e-mail systems...the average cost per mailbox today is apparently $19, the industry has indicated, whereas the benchmark in the industry average is about $12, which would represent about 30% in savings government-wide. This could provide substantial savings, since at the present time there are over 300,000 mailboxes operating in the federal government. Obviously there is a huge potential for savings.

Is this the kind of cost saving you've achieved by consolidating your systems?

[David Nicholl]

We have about 100,000 mailboxes. My best guess or estimate at our mailbox cost is about $9 or $10, and that's unlimited size. You have to be careful in comparisons between how many e-mails you're allowed to store or if you are capped at a certain size. Our scale is different, but the opportunity is there for sure.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

The other aspect I know we're all concerned about is cyber threats and attacks. Obviously with one mail system you have that much more of a secure system.

[David Nicholl]

I think it's a great byproduct. It's a double-edged sword. A little bit of distribution maybe protects you a little bit as well sometimes, but certainly it allows you to focus and concentrate on securing what you have. There are two sides to it, though.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

It's a lot easier than securing 100 different systems.

[David Nicholl]

Yes.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Did you do any consolidation within your phone system? Coming from the private sector to Ottawa—I've been here six years—the communications system is phenomenal. The voice-over-IP phones average $15 per month, while we're paying somewhere around $31 per user, with over 300,000 of these legacy phone lines.

Has the Ontario government explored phone consolidation as well?

[David Nicholl]

Yes. It's not part of eOntario, which is the consolidation. We're centralized on a Bell Centrex system in downtown Toronto, but we have the same issue outside of Toronto: very disparate systems, PBXs in every office, very difficult to maintain.

We are looking, as I'm sure the federal government is, to our network as the means to move out of that environment. In fact, we have a request for an RFI on the street—I think it's closed—to go to industry to ask, from a strategic perspective, what we should be looking at.

With this, the most important part is your network. You have to have a secure and solid network if you're going to do this, so we've put a lot of effort into working with our partner on our network side to make sure we get a stable network in place, which we have now. We're now looking at how we can start bringing some unified communications, things like voice over IP or video on your network, into play. We'll start small, I suspect, because our network is—

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Are you anticipating cost savings there as well?

[David Nicholl]

Oh, absolutely, we do, yes.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Have the industry—

[David Nicholl]

No, we haven't quantified what it would be.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Okay. Thank you very much.

[The Chair, NDP, Pat Martin]

That just about wraps up your time anyway, Ron, so thank you.

Denis Blanchette.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Thank you, Mr. Chair.

I'd like to thank you for being here, Mr. Nicholl. In passing, I'd like to congratulate you, you and the Ontario government, for the results you've obtained.

Before asking my first question, I have a request. Obviously, you were not in the position prior to 2005, but what you did is based on what was done previously. Could you provide the committee at a later date with some data, particularly about what my colleague Mathieu was saying—the percentage of your budget that you set aside for consultants, before and after the clusters.

Also, to follow up on Mr. McCallum's question, I'd like to know how the profitability of the exercise developed when you started creating clusters. Was it immediately profitable for the government or only after a number of years or after certain conditions had been applied?

Could you please provide the committee with those details? I think it would be very interesting for us.

[David Nicholl]

I'll ask, but we certainly have the numbers of consultants, going back over the years. Yes, for sure we can do that.

Whether we have them as a blanket number between all of the IT organizations or whether we have them separated out between clusters and infrastructure, I'm not so sure, but yes, absolutely, we can do that.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Okay.

How does the Ontario government think? When the time comes to talk about consolidation, shared services, and so on, what's considered first? Are you looking systematically for savings first, functionality first, or customer service which leads to services to citizens? What motivates the Ontario government's thinking about changes to information technologies?

[David Nicholl]

Speaking directly to the 2005 infrastructure consolidation, which is really what we're here to talk about, I think, to be fair, there were a number of motives.

Clearly, we had been watching what hits.... Hewlett-Packard was kind of the poster child from this perspective, but IBM was there as well, and we certainly learned a lot from both IBM and HP.

I think there was a realization of what the potential could be, from a service perspective. When you're managing a single set of infrastructure as opposed to multiples, you can react more quickly and you can do things much more efficiently and much more effectively. You can ally your clusters. In other words, you can ally your IT people who are involved with the business to focus a lot more on providing the higher-end types of services, such as application development, advice, strategic planning, or information management. You can really shift your focus of work away from worrying about a desktop or a laptop or a BlackBerry or an e-mail account, and start thinking about things that really matter to citizens and to businesses.

I think the mantra was very much about that service element. There's no doubt that the cost savings were attractive as well, but honestly, in this case, one really does go with the other. There's no excuse for it not to; you really can increase services and you really can save money.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Thank you very much.

Unless I'm mistaken, the secret to your success is this: you have made good use of new technologies and their capabilities, you have been able to rely on your employees and you manage contracts given to the private sector much more rigorously. If I summarize it that way, would I be correct in saying so?

[David Nicholl]

There's probably more to it than that, especially in the area of how you manage a large number of servers. Virtualization, which is what everyone's moving to, really was a huge help to us and allowed us to remove a very large number of servers in a very short period of time. We adopted virtualization very robustly. So I would say that new technology was definitely a big help to us.

We couldn't have done it without our staff; it wouldn't have worked. We asked a lot of them. We put them in very difficult situations and they responded brilliantly, and they still do to this day. So I would absolutely say that the staff were a huge part....

The one thing you didn't see, from a critical success factor, was governance through our whole organization, up to and including the Management Board of Cabinet. They were aware of what we were doing. We had incredible deputy support to do this. We had support from our business ministries. The governance piece around this was vitally important. Even for the application modernization that one of your colleagues was speaking about earlier, which we're still doing to this day, the governance of that and the involvement of the management board have been critically important as well. Every six months, we report to the management board on that project. We know they're interested; they ask good questions. That was a large part of the success as well.

We really did have a lot of factors—we had the stars aligned—and that was a big part of our success.

[The Chair, NDP, Pat Martin]

Thank you, Mr. Nicholl.

Thank you, Mr. Blanchette; your time is up.

Now, saving the best for last, we will go to Mike Wallace.

[Mike Wallace, Conservative, Burlington, ON]

I don't think I'm the last, but thank you for that, Mr. Chair, and I'm not sure that I'll be the best.

I appreciate your coming, Mr. Nicholl, and sharing your experience. I have a few background questions for you so that I understand.

This project started in 2005 and it was ongoing for a number of years. Obviously, it didn't happen overnight. I think there was a change in government in the meantime. Regardless of the government in power, they committed what was still there to make this project go forward. Is that an accurate statement?

[David Nicholl]

Absolutely.

[Mike Wallace, Conservative, Burlington, ON]

In terms of using expertise from outside government and getting private sector advice and so on, can I ask you if you were with the private sector prior to this, or have you always been a public servant?