Section II(g)

Information Technology

Terms of Reference

"To evaluate the current state of the information technology capability of the central government".

Background

The Province of New Brunswick, like most large public and private enterprises, relies heavily on computer applications to support its business operations. The Province wants to use information technology in its drive to increase the efficiency with which it delivers services to the public. The objective of this project is for us to provide the Province with an overview of the current state of its information technology capability. This overview is meant to be a precursor to subsequent focussed reviews of particular issues.

We discussed the initial terms of reference with Mr. William Thompson, Deputy Minister, Office of the Premier. In our discussions, Mr. Thompson outlined the specific items the Government was looking for:

Review and assess the information technology infrastructure of the central government (including supporting hardware, software and network components)
Review and comment on the central government's overall management of information technology
Review and comment on the central government's management of major information technology projects
Comment on other issues that affect the information technology capability of the central government that arise in the performance of the above reviews

Scope of Review Procedures

Our project is an inquiry-based review and relies upon information obtained through various interviews. The review encompasses all central government departments classified as Part 1 of the Civil Service Act with the exception of the Department of Education. The review does not deal with issues arising from the year 2000 problem, as this would be beyond the scope of this limited engagement.

We initially met with Mr. G. Stephenson Wheatley, Deputy Minister, Supply and Services and Ms. Lori MacMullin, Corporate Information Management Services (CIMS) to obtain background information and to schedule interviews. We subsequently interviewed the following individuals to obtain information on the central government's information technology capability:

Mr. G. Stephenson Wheatley, Deputy Minister, Department of Supply and Services
Mr. David Ferguson, Deputy Minister, Department of the Solicitor General (and Chairperson of the Information Technology Strategy Steering Committee (ITSSC))
Mr. Peter Andrews, Director of Information Systems and Services, Department of Natural Resources and Energy (and Past Chairperson of the Information Systems Advisory Committee)
Ms. Lori MacMullin, Chief Information Officer, CIMS
Mr. Kenneth Fitzpatrick, Director of Information Technology Services, Department of Labour (and Chairperson of the Information Systems Advisory Committee (ISAC))
Mr. Charlie Chaisson, Director of Technical Architecture and Shared Services, CIMS
Mr. Danny Keizer, Director of Strategic Initiatives and Security, CIMS
Ms. Lynne Fudge, Director of Information Architecture and Planning, CIMS
Mr. Bob Gamble, President, Service New Brunswick
Mr. Peter Dielissen, Director of Information Technology, Service New Brunswick
Ms. Mary Ogilvie, Vice President Development, Service New Brunswick

Observations and Comments

Review and assess the information technology infrastructure of the central government (including supporting hardware, software and network components)

The central government has approximately 10,000 personal computers. These computers are being replaced at a rate of 2,500 per year. In common with most organizations, the year 2000 issue has generally forced out older technology. Departments buy new units using a standard buyer's guide. This provides consistency and a minimum standard across government. It provides direction on desktops, printers, standard desktop software, network cards, etc.

The central government has over 200 servers that provide file and print, application processing and database access services. These servers generally run on Novell Netware, Windows NT or a Unix operating system. Each department controls server acquisition and there does not appear to be firm government standards. Some departments use CIMS to help them with the acquisition but most make their own decisions.

The central government uses mainframe services supplied by an external party. Although ten different departments utilize this mainframe, three departments, Health & Community Services, Finance and Transportation account for 80% of the use. We understand this mainframe is about two years old.

The central government's high speed ATM (asynchronous transfer mode) network provides wide area network (WAN) functionality for central government departments. A WAN typically serves as a customized communications backbone that interconnects all of an organization's local networks. Remote offices, where the ATM network is not cost effective, use a slower private frame relay network.

We have not reviewed the core application software used by each department in the delivery of services as that review is outside of the scope of this review. We understand that there is approximately $80 million in application software in the development stage. This development stage ranges anywhere from being contemplated to in process. Business processes drive new application development and new applications drive the technical infrastructure. Additional servers may be necessary as business changes, for reasons related to capacity, distribution, performance, etc.

The current status of personal computers, servers, network communications, desktop and other network software within the central government varies by department. The general opinion, however, based on the interviews we conducted is that the central government is reasonably well equipped at this point in time. We concur with this assessment, as not unlike most organizations, there has been a heavy investment in technology over the past few years in order to become Y2K compliant. New application development and normal replacement of older units should drive most of the central government's requirements in this area over the next few years.

We believe the central government should review the cost / benefit of implementing stronger standards, an "evergreening" program, and a centralized (or virtual) help desk. We expand upon each of these opportunities later in this report.

Review and comment on the central government's overall management of information technology

We believe the area of IT management presents the single largest opportunity for the new government to increase the benefit it gets from its IT expenditures. The overall management of IT was a common theme in every interview we held. In general, there has been limited success over the last few years in the development of corporate applications or in the sharing of business processes, data and applications across departments. We believe the Province must look for common solutions to minimize the expense of redundant IT development. As the dependency upon and the investment in IT increases, the financial consequences of not addressing this issue will grow dramatically.

This is not a new issue. It was mentioned in a 1993 IT Strategy Review and again in 1996. The following extract was taken from a 1996 NBG Information Architecture Report Synopsis that was prepared by Corporate Information Management Services:

"CIMS believes that in order to achieve a truly integrated approach to IM/IT, Government as a whole, must develop and implement an enterprise wide strategy. This is particularly important if opportunities within sectors are to be fully exploited".

CIMS was established "to protect the corporate interest and promote the common good". It does this through a process of facilitation and encouragement as it has no direct control over departmental IT expenditures or staff.

Although there has been some improvement over the years as CIMS has matured and the terms of reference of the (ITSSC) and (ISAC) have been refined, we have been told the same basic issue of decentralized control still exists. The following examples illustrate some of the specific problems that arise from this issue:

IT priorities are set by individual departments and not by central government

The departmental priorities may be different from those of the central government
Opportunities to achieve economies of scale may be missed
New applications are developed by individual departments

Common architectural principles, standards and methodologies are not in force
There is little reuse of code and services
Each department has to re-invent the wheel
Individual departments cannot afford to keep people with the skills necessary to manage major projects, as each department only has very large or specialized projects periodically

The central government should carry the specialized skills given the volume of new IT development that occurs across all departments
Succession planning, redundancy of skills, career path development, training, and performance and quality management are facilitated through a centralized pool
There is limited sharing of data among departments

Similar data is stored in multiple locations
Storing and maintaining multiple copies is time-consuming and expensive
We have been told that at least six different major projects currently underway have independent person registries
There has been limited development of an overall central government strategy or policies on common initiatives like the internet, intranet, help desks, interactive voice recognition, document management, workflow, or common databases and applications. Each department is responsible for its own activities and does not have funding for common applications.

Redundant and inefficient development is taking place
The central government can better carry the business case than any one department for large infrastructure projects
There is an uneven sharing of IT funding among departments

Smaller departments cannot benefit from the higher technology spending levels of the larger departments
The better IT resources are attracted into departments that spend more on technology thereby compounding the problems facing smaller departments

We believe that the governance and organization of the information and information technology function in central government requires fundamental change. It appears from our interviews and review of preceding studies that the current structure lacks the authority and capability to provide the required direction and leadership that the central government requires. We believe that the central government should initiate an in-depth process, to identify and implement an organizational structure that will use its information technology resources more efficiently.

We have outlined some preliminary thoughts on one alternative below. An in-depth review may identify other alternatives that are more appropriate. Alternatives will have to be assessed based on a broader context, in that they cross and alter departmental information technology responsibilities. This issue is too complex for the limited scope of this review.

In every large organization, information and information technology are increasingly important to the business being supported. New business strategies and information technology are so inter-linked in today's environment that it is difficult to have the former without the latter. Large organizations in today's environment recognize this dependency by including senior IT staff in high-level management discussions.

We believe that the central government should consider creating a new information technology position at the level of Deputy Minister (Deputy Minister of IT). The position should include the following responsibilities:

The development of a business-driven, top-down, government-wide information and information technology architecture to provide a framework for future development. This architecture should more specifically:

Define the underlying technology infrastructure including standardization on operating systems, hardware platforms, communications protocols and database technology
Provide guidance and direction for integrating processes, applications, data and technology infrastructure
Accommodate new ways to communicate with other parties without having to make major changes to the underlying system
Facilitate information sharing across the organization
Eliminate redundant or counter productive efforts
Provide a master plan to guide individual changes
The development of a central strategy and policy on items like the internet, intranet, government-wide help desk, interactive voice recognition (IVR), document management, workflow, common applications, central databases and overall integration
The development of a standard application architecture that will identify common requirements and set standards and methods for application development and design

In order for this Deputy Minister to have any practical impact, the central government would have to enact additional changes:

The Deputy Minister of IT would have responsibility for central government information technology funding and the allocation of that funding to various departments
Board of Management would approve the overall IT strategy, IT budget allocation and key IT development initiatives
ITSSC and ISAC would review the overall central government architectural principles and IT application development projects, as well as provide input to the budget allocation process
Departmental information technology directors would report to both the Deputy Minister of IT and the departmental Deputy Minister
The individual departments would still have responsibility for and ownership of new IT developments

In addition, we believe the central government should review the efficiencies to be gained from clustering different departmental services that have similar service delivery, information and information technology requirements. This concept of clustering, groups individual departments for IT purposes. It encourages joint planning and facilitates the sharing of IT staff, resources, data and application development. This approach has been adopted in several other provincial and territorial jurisdictions to enable common IT development and resources by sector. We believe this approach holds great potential for IT efficiency.

Review and comment on the central government's management of major information technology projects

As mentioned before, the central government has approximately $80 million worth of new information technology projects in a variety of stages from conception to in-progress. There are eighteen departments in central government that manage their own IT development. On average, each department has a huge project every ten years. In addition, there are another twenty smaller projects every year across central government. Departmental program managers manage these projects. These program managers have an in-depth knowledge of the departmental programs that they are re-engineering, but the skills they bring to project design, cost estimation and management vary widely.

The central government has experienced a number of problems with its management of major IT projects, as summarized below:

The departments need a roadmap of where they're going in relation to the overall direction of the central government
They have to re-invent the wheel in every department
The departments are all doing their own thing with their own consultants
There are no specialized IT project management skills across government
Proper planning is not done up front
Many projects do not take an end-to-end process view as this would require integration and standardization across multiple departments
Many project teams lack process engineering expertise to ensure that processes change as well as the technology
Departments do not have to follow standard guidelines on major IT projects
Different methodologies are being used for different projects
Projects are being developed to accommodate "wish lists" as opposed to "need lists"
Scope creep and late delivery of projects are general problems
The departments that use CIMS bring them in too late for CIMS to add maximum value

Based on the limited interviews we have conducted we believe the central government can improve its management of major information technology projects by undertaking the following initiatives:

1. The central government should strengthen its project methodology

It should develop architectural principles that all new projects follow, for technology infrastructure and applications
A quality assurance process should be put in place that ensures conformity to these principles
New applications should be reviewed by ITSSC and ISAC to reduce overlap of efforts in different departments, and approved by the Board of Management through the Deputy Minister of IT.
Techniques should be adopted that limit wish lists, like function point analysis that allocates costs to functions and then slims down the functions to only those needed
Projects should be structured around three to six-month releases in light of long-term goals, in order to maintain focus, more effectively use staff taken off line functions, minimize staff turnover on projects, and more closely align the needs analysis with delivered functionality
Project estimates should utilize appropriate costing methodologies, e.g. the inclusion of ancillary costs such as the cost to replace departmental staff who spend large blocks of time on the project
A post-implementation process should be a standard part of every project to ensure appropriate assistance is available to the departments operating new systems, to utilize the knowledge of past problems and successes in future projects, to share newly acquired knowledge, etc.
2. The central government should set up a central (or virtual) project management office that will allow a greater level of specialization. The overall development activity of the central government should allow for the retention of highly skilled specialists that could implement best practices across departmental boundaries. Examples of appropriate specialists are:

Process engineers
Architects
Project managers
Database designers
System designers (e.g. Internet design, User-centered design, etc.)

We believe the above initiatives would improve productivity, reduce the overlap between departments, maximize re-use of previous work, reduce the level of scope creep, maximize the number of projects delivered on-time, and improve the overall quality of projects delivered. The implementation of modern IT project management methodologies by skilled specialists that work on numerous government projects, would improve the management of these projects and reduce repetitive errors.

Comment on other issues that affect the information technology capability of the central government that arise in the performance of the above reviews

In the process of our review we noted a number of other issues which we thought to be important. These are items the central government should address to enhance efficiency, reduce costs or sustain the value of past investment. The potential cost efficiencies of implementing these initiatives are significant.

Centralized Help Desk

Technological advances, including desktops, laptops, local area networks (LANs), WANs, office automation, internet, remote office access, e-mail, etc. offer many new opportunities for improving the central government's business processes. However, the variety of new technology also increases user frustration and heightens demand for quality support. A user should not have to determine whether the problem is an application, network or hardware problem and decide where to go for assistance. A help desk provides a single point of assistance.

Currently, help desks are spread across eighteen different departments. These help desks have different skill levels and resources. We believe the central government should investigate the cost savings, efficiency and service level available through the implementation of a centralized government help desk.

A central government or "virtual" help desk could:

Reduce redundant resources
Facilitate the sharing of problem resolution information
Allow the use of sophisticated software to support help desk operations and provide management information
Achieve economies of scale through the installation and use of help desk software
Provide centralized break and fix, initial installation and other services
Assist in the efficient scheduling and training of help desk staff
Minimize the quantity of telephone numbers required when assistance is needed

The central government could start this process with a cost / benefit analysis based on a survey. If justified, a few of the larger departments could then be selected to participate in a pilot project. This would provide the necessary critical mass to start, with other departments added later. Subsequent to consolidation, the government could investigate the economies to be gained from outsourcing this service. The transition, of course, would have to be managed appropriately.

The resources for a centralized help desk would not have to be in one location. It could be established on a virtual basis. It might also involve regional call centers. We would be pleased to discuss various alternatives available to you should you wish further information.

Desktop Management

The central government should investigate the cost / benefit of "Evergreening". This is an arrangement whereby the vendor agrees to replace all equipment with current technology every two to four years and will take back the old equipment. The advantages to this arrangement include:

Assurance that the system utilizes current technology
Spreading of capital acquisition costs across fiscal years, avoiding the need to make substantial periodic capital investments to replace obsolete equipment
The vendor assumes responsibility for removal of obsolete equipment, which many organizations tend to put into use elsewhere simply because they have the equipment
Potentially increased purchasing power with the vendor through volume discounts
The central government may be able to negotiate vendor responsibility for guaranteeing compatibility of all new systems with government-established standards for software applications
More equitable spending on computers for staff in both large and small departments

The central government should consider longer-term contracts for original equipment manufacturers of hardware, i.e. brands, to obtain the benefits as described above. It can still tender local resellers on a six-month basis to obtain price deflation because of technology advances.

Standards

The central government should consider strengthening its standards on servers and software. Communication of information, integration of data and help desk support are all simplified if the proliferation of different hardware and software is minimized. The central government should consider trying to limit the number of versions of software in use to two. This will slow acquisition of new versions, but will simplify support and cross-department compatibility.

Staffing

Recruitment and retention of IT staff with the appropriate skill is an industry problem and the central government faces the same issue. Numerous internal staff have been hired by external consultants and are now being contracted back to the central government at higher rates, in some cases twice what the central government was previously paying.

We understand that the central government currently has a study underway on "Managing, Retaining and Recruiting for the I.T. Profession". It has also implemented an across the board compensation adjustment for IT staff to make compensation levels more competitive. We believe the central government will have to re-address items like compensation and benefits, career path planning, training, etc., in order to attract and retain the skilled individuals it will require to manage and improve its information technology infrastructure. Other organizations have successfully utilized bonuses for retention, specialized skills, Y2K, large project knowledge or outstanding performance, in order to attract and retain skilled individuals. We believe the central government should consider the use of these bonuses for highly skilled staff that are in demand. IT staff compensation, of course, cannot be changed without considering the impact on non-IT staff.

People under contract currently carry on a high percentage of regular system operations. Although a certain amount of contract staff is healthy to an organization, extensive use is very expensive. We believe the central government should review the cost efficiency of having regular system operations carried on by external parties.

Government-Wide Intranet and Internet Website

The central government should review the benefits to be gained from the implementation of a government-wide intranet. An intranet essentially looks like the internet, is accessed using a browser such as Netscape or Microsoft Explorer, but is only available to those inside government with the appropriate security clearance. It is secured from outsiders by a firewall. An intranet enables employees to find information when they need it, and to cut and paste it into their work. People save time because they are not duplicating work. Instead of government information stored on stand-alone PCs, filing cabinets or huge piles on desks, information is online and available for use by all.

Similarly, the central government should review the benefits to be gained from the implementation of an internet-based website that provides a more user-centred, integrated view across the departments. We understand that the current website has generally been developed by individual departments. If a user does not know which department offers the particular service the individual is looking for, the information is very difficult to find. A more coordinated approach to this issue would reduce duplication of effort, increase standardization and provide a more usable site.

Business Continuity Planning

Business continuity planning includes business interruption, disaster recovery and contingency planning. We understand that business continuity planning has historically been a very difficult item to implement across central government given the self-insured culture. Business continuity planning consists of recovery plans and technology that ensure the continued operation of critical government functions when threatened by unforeseen circumstances. A considerable amount of work has been done in this area because of the year 2000 issue. The central government should maintain the recovery plans for critical functions on an ongoing basis to ensure the benefit of this previous work is not wasted.

Investment Versus Cost

We have been told in some of our interviews that the initial cost of an IT project receives more focus than the long-term benefits that will accrue if the project is successfully completed. IT development expenditures have to be viewed as investments that pay long-term dividends. Almost all IT projects follow a bell curve progression. The costs increase through the period of development and implementation and then drop off as the new system comes on-line. While the initial cost is an important factor, it can not be viewed in isolation. An improved cost / benefit methodology will assist the central government in balancing the long-term benefits versus the initial cost of new IT infrastructure projects.

Concluding Remarks

In common with many organizations over the last few decades, the central government's information technology environment has evolved from a centrally-controlled mainframe structure to a decentralized structure effectively controlled by individual departments. This shift in control from a central agency to individual departments has resulted in a fragmented information technology strategy for the central government. This, in turn, has caused:

The lack of a cohesive government-wide information technology strategy
Redundant effort by different departments on common issues and opportunities
Increased costs because multiple copies of common information are stored in different departments rather than a central information warehouse
An inability to attract and retain the specialty skills required to properly plan, manage and control the central government's information technology infrastructure
Lack of action on significant cost efficiency initiatives like the clustering of IT resources for similar service lines, the implementation of a centralized (virtual) help desk, or government-wide intranet and internet development

We believe the government has to fundamentally change the governance and organization of its information and information technology resources. It has to create more balance among the departments responsible for program delivery and a central agency that can implement a government-wide information technology strategy. Information technology has to be viewed as a resource similar to cash, people or capital assets. They all have to be managed to maximize their effectiveness.