Ottawa

Phoenix replacement process aiming for transparency

There's more riding on the federal government's plan to replace the chronically dysfunctional Phoenix pay system than just paying workers properly, according to a former government executive, and that's why transparency is key.

Pay system's failure can be traced to flawed procurement process, former government exec says

Federal public servants protest in Ottawa over problems with the Phoenix pay system. (Justin Tang/Canadian Press)

There's more riding on the federal government's plan to replace the chronically dysfunctional Phoenix pay system than just paying workers properly, according to a former government executive.

There are also political implications.

The federal gun registry, the sponsorship scandal and now the Phoenix failure are examples of "major project failures" that can be traced back to flawed procurement processes, said Sahir Khan, vice-president of the Institute of Fiscal Studies and Democracy at the University of Ottawa.

"I think we've seen a string of governments that went in with strong fiscal balances into elections," said Khan, who formerly served as both an assistant parliamentary budget officer and director at the Treasury Board Secretariat.

"[They then found] themselves having to answer very difficult questions about procurement issues and large technology issues."

Sahir Khan is executive vice-president at the Institute of Fiscal Studies and Democracy at the University of Ottawa, and a former assistant parliamentary budget officer. (CBC)

'We believe in transparency'

The Treasury Board team leading the project to replace Phoenix said at a recent technical briefing that it's a more transparent, open, flexible and agile procurement process, one that has involved public sector unions.

Three companies are competing to build the new pay and human resources system, and this time around, they're talking openly about the process.

Ceridian, which has more than 250 workers in Ottawa and hundreds more across the country, hopes their cloud technology will be chosen for the massive project.

"We believe in transparency. Everything we do is done on an agile basis," said David Ossip, the company's CEO.

"I think the way that they're doing the evaluation — which is a series of tough challenge days where you have to show specific functionality — is a very good way of differentiating the vendors."

The technology firms vying for the pay system contract are already offering similar solutions in the private sector, where Ossip says change tends to come more easily and decisions are often made more quickly.

Risk of outdated technology

One of the other competitors is SAP, a large multinational firm that's been doing work for the Canadian government for years.

Robert Conlin, vice-president of public services for SAP Canada, grew up in Ottawa and works from the firm's local offices. This new pay technology is needed now, he said, so the process has to move more quickly.

Robert Conlin is vice-president of public services for SAP Canada public services. SAP is one of the companies competing to build the federal government's new pay and human resources system. (submitted)

"If you have a process that goes on for two years, you run the risk at [the] time of delivery of being at the end of life for that technology," Conlin said.

"So this is the new normal for technology procurement, because it's essential, given the pace of change of innovation in the industry."

The Treasury Board said this time it asked public servants what they want from a new pay system. They also sought out lessons learned in other places that implemented new, not-always-successful pay systems including Australia, California and Alberta.

"The transparency, that's fantastic. I give them full marks. Way better than last time," Khan said.

But openness is just one part, Khan added.

The government will also have to get "a rock-solid business case with third party assessment," Khan said, and install a management team "with the track record of having successfully designed and implemented these large scale IT projects."

If the government gets it right, Khan said it could form the template for how they make purchases in the future.

CBC requested an interview with Workday, the third company vying for the Phoenix replacement job. Workday responded with a statement attributed to country manager and sales vice-president Jennifer Buckley, who pointed to the company's 98 per cent customer satisfaction rating and said: "We are confident that we can achieve the same with the Government of Canada by modernising the HR and payroll systems that federal public servants use daily."

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