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Human Capital Management Feasibility Report

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Executive summary

The Next Generation Human Resources and Pay (NextGen HR and Pay) Initiative Final Findings Report (2024) determined that it was viable to adopt the Dayforce solution to meet the HR and pay needs of the Government of Canada (GC). The feasibility project (2024-25) set out to build on the results of that Report to assess the GC’s level of confidence in the feasibility of implementing Dayforce solution across the enterprise.

This Feasibility Report presents the results and findings of the feasibility project. It is an overview of the Project’s context, challenges, and methodology. It analyzes the results of each project activity to draw conclusions about the feasibility of deploying Dayforce across the GC.

The feasibility project addressed items that were unknown at the time of, or out of scope of, the NextGen HR and Pay assessment by completing further design, testing, validation, and costing to confirm feasibility of a HR and pay business and pay transformation, including an enterprise-wide deployment of the Dayforce. Five criteria were pre-established to demonstrate feasibility and justify moving forward with HR and pay business and digital transformation. The intent of the feasibility project was to advance system and GC readiness, and to have confidence that all identified issues have viable possible solutions that can be implemented before eventually going live with Dayforce.

Findings

Based on a framework developed to assess the five feasibility criteria, activities were sufficiently completed to an adequate quality. While progress was less than desired in some areas, there were no insurmountable issues or obstacles encountered by any workstream. A few delays were encountered, but project deliverables were sufficient at the end of the project to shape the recommendation.

As part of the decision-making framework, the project set two critical thresholds, or “dealbreakers”, that would need to be met as a minimum requirement for the final recommendation to be positive. Those two thresholds were met.

The project team worked closely with all workstreams to collect results and to identify residual risks expected to remain post-feasibility project. Mitigation strategies were identified for residual risks and those risks continue to be closely monitored and refined. All outstanding risks and issues have a feasible path to resolution.

Table 1: Results overview
Feasibility criteria Completeness Quality
1. Prove that the system can meet the GC’s full requirements, and assess remaining vendor capabilities and functions from the Final Findings Report (33% weight) 89.7%
Sufficiently complete		 90.7%
Excellent result
2. Demonstrate that the GC can operate the system once in production (including managing its data) (33% weight) 95.5%
Fully complete		 74.9%
Insufficient result
3. Prove that the GC can successfully onboard federal departments and agencies to a new HR and pay system (14% weight) 88.5%
Sufficiently complete		 91.8%
Excellent result
4. Demonstrate the full life-cycle costing for the program (10% weight) 100%
Fully complete		 80%
Adequate result
5. Prove the GC can streamline its operating model and negotiate simplification opportunities (10% weight) 89.5%
Sufficiently complete		 91.3%
Excellent result
Overall 92.4%
Sufficiently complete 		84.6%
Adequate result

Recommendation

The work completed as part of the feasibility project and results outlined in this report indicate it is feasible for the GC to move forward with HR and pay business and digital transformation. However, success is not a certainty and risks remain. It is therefore recommended that the GC continue investments over the next two years, 2025-26 and 2026-27 to complete the remaining work identified in this report and address gaps mentioned throughout the chapters, to finalize the development of the Dayforce solution and prepare the enterprise and a first wave of departments to onboard.

While the Project demonstrated that it is feasible to implement Dayforce, this should not be interpreted as readiness to implement now. Following completion of the feasibility project, the GC has assessed Dayforce against 17 critical-to-pay capabilities and 11 prioritised HR capabilities, based on the functionality needed to deploy for Shared Services Canada (SSC) and PSPC. A further 14 HR capabilities are included in a complete HR and Pay Business Reference Model for the GC, and will be assessed to determine whether or not they are required in a single enterprise solution. PSPC and the Office of the Chief Human Resources Officer (OCHRO) will need to ensure that Dayforce can align with GC requirements for all HR capabilities (beyond those prioritized for Feasibility) currently being delivered through legacy core HR systems (MyGCHR and various PeopleSoft versions, HRMIS, SAP, etc.). PSPC will need to work collaboratively with all stakeholders to make sure solutions are available to meet the end-to-end employee life-cycle business needs of each unique department to avoid decreasing operational efficiency or causing hardship to employees in those departments.

Key success factors

Though most of the Project workstreams focused on digital transformation, other workstreams focused on the GC’s ability to adapt to adopt the new system by progressing HR and pay simplification and adapting the GC HR business model. The results of the feasibility project make it clear that a key success factor will be whether or not the GC and departments can make the transformation of HR and pay a priority – including earmarking necessary funding to support. The complexity of this endeavour should not be underestimated. The GC has shown that adapting its own business rules, processes, and data management practices at the pace needed to adopt a modern solution still presents a challenge. PSPC and OCHRO will need to support departments and agencies and enable them to participate, but also hold them accountable for their role in preparing for the transition. Taking the time to engage with users, involve them in finalising the development and testing, and prepare them for the changes will be critical to avoiding mistakes of the past.

The way forward

Post-feasibility, PSPC will focus on finalizing the core functional elements of the Dayforce solution (HR, Pay, Benefits, Workforce Management, Talent, Cloud Extensions, Product Roadmap, Integrations, and Reporting), integrating the HR and Pay Platform with key pre-pay, post-pay, and pension systems as well as working to strategically plan and establish departmental and enterprise-wide readiness to deploy the solution. A final deployment decision point on staggered roll-out (Winter 2027) of the system will occur once readiness conditions and benefits compared with the current state are confirmed.

Chapter 1—Context and methodology

Introduction

The objective of the Human Capital Management (HCM) feasibility project within the larger HR and Pay Transformation initiative is to build on the results of the Next Generation HR and Pay Initiative to assess the Government of Canada’s (GC) level of confidence in the feasibility of implementing Dayforce and proceeding with the transformation of HR and pay in the GC. This Feasibility Report outlines the activities and key inputs to provide an investment recommendation to the GC, including a roadmap of the remaining work required before implementation is possible.

The intent of the feasibility project was to advance system and GC readiness, and to have confidence that all identified issues have viable possible solutions that can be implemented before eventually going live with Dayforce.

Background and context

In Budget 2018, the Government of Canada (GC) committed to addressing the persistent challenges of the Phoenix pay system, which was launched in 2016 and has been plagued by ongoing post-implementation issues and a considerable case backlog. Given the ongoing costs associated with Phoenix support, the GC has repeated its intention to replace the existing pay system.

In 2017, Goss Gilroy Inc. (GGI) undertook an independent lessons learned study on the management and implementation of the Transformation of Pay Administration (TPA) initiative (that is, Phoenix adoption). GGI identified 17 lessons learned in six areas, noting that, fundamentally, it was the underestimation of the initiative’s complexity that led to its downfall. GGI’s assessment was reconfirmed in further assessments conducted by the Office of the Auditor General (OAG) and the Standing Senate Committee on National Finance in 2018, and other experts who agreed there was insufficient governance, consultation and communication, inadequate pay rule simplification and standardization, and inadequate testing. The reviews highlighted that HR and pay issues are not solely technical; the complexity of the business of GC HR and pay needs to be addressed before new technology can be deployed.

An HR and pay business and digital transformation presents the opportunity to finally integrate end-to-end HR and pay processes into a single solution. Such an integration will potentially:

In addition, standardizing and centralizing data management will aid modern interoperability, including streamlining the transfer of employees between departments. An integrated solution will save time, freeing up HR and pay professionals to deliver added value to people management through analytical and transformational work, rather than solely focusing on transactional administration.

Public Services and Procurement Canada (PSPC) launched an agile procurement process for a modern, integrated, and cloud-based HR and pay solution on August 24, 2018. The process pre-qualified 3 Software as a Service (SaaS) vendors: Dayforce (formerly Ceridian), Workday, and SAP. SaaS offers an alternative to on-premise solutions like Phoenix, as applications are hosted on a remote cloud network and the client (the GC) leases the use of the software. SaaS offers scalability, provides faster access to upgrades, and conforms to industry-leading practices; with the vendor assuming responsibility for installation and configuration. The SaaS model is based on user needs and modern HR management practices, with features like mobile access and virtual assistants supporting the employee’s experience.

In 2020, the Next Generation HR and Pay Initiative was created to develop recommendations on the SaaS solution. In 2021, after competitive solicitation and subsequent evaluations, Dayforce was selected for a viability assessment. The viability assessment tested the Dayforce system against the complexities of the GC’s HR and pay requirements. The assessment was lead by the Next Generation HR and Pay Initiative in collaboration with Canada’s Chief Information Officer and Chief Human Resource Officer, Public Service and Procurement Canada, Shared Services Canada, and participating client departments. The viability assessment was completed in 2023, and its results were included in the Final Findings Report (2024).

The Final Findings Report documented that the Dayforce SaaS is a viable option to meet GC needs. It identified 90 known gaps that need to be addressed for a full implementation, 72 of which will be addressed through either future Dayforce product enhancement roadmap (that is, software updates) or through GC business process redesign. However, there are 18 complex GC-specific gaps that Dayforce’s planned future enhancements will not address. Many of these gaps fall under key areas related to the complexity of pay in the GC, such as Mass Salary Revision, Establishing Rate of Pay, and Acting Administration. Addressing gaps through business process/policy changes requires policy and regulatory amendments, negotiating new collective agreements, or developing cloud extensions within Dayforce. These efforts, along with standard product enhancements and simplification efforts by the Treasury Board of Canada Secretariat – Office of the Chief Human Resources Officer (TBS-OCHRO), are being advanced simultaneously to reduce the project’s risk. The Final Findings Report also confirmed the need for an enterprise HR and pay strategy and central data management approach.

In May 2023, the Prime Minister announced the creation of the Enterprise Pay Coordination Office within Public Services and Procurement Canada to lead, coordinate and implement an integrated, enterprise strategy on human resources and pay, and to move forward in assisting the business and digital transformation. The strategy was developed to address the root causes of HR and pay issues along four key pillars: management, HR, data, and pay. In May 2024, the strategy, and the way forward were endorsed by the GC, paving the way for continued investment in Dayforce. The strategy noted that more work would be required post-viability to confirm the overall feasibility of a GC-wide implementation.

The feasibility project

To build on the Final Findings Report, Budget 2024 granted funding for PSPC to complete further design, testing, validation, and costing to confirm feasibility of an enterprise-wide deployment of Dayforce. With respect to assessing the system, the scope of the feasibility project addresses items that were unknown at the time of, or out of scope of, the viability assessment. While viability testing demonstrated that Dayforce is a technically viable option, preliminary work on how to implement Dayforce uncovered additional complexities that needed to be assessed. Furthermore, viability testing was limited to payroll activities (that is, ensuring the solution produced accurate pay calculations). For Feasibility, the GC assessed enterprise and departmental readiness, including complex post-payroll processes and infrastructure to ensure that post-payroll reconciliation can run smoothly.

Five criteria were pre-established to demonstrate feasibility and justify moving forward with HR and pay business and digital transformation. Success of the project can be measured based on the artefacts developed and evidence generated to:

  1. Prove that the system can meet the GC’s full requirements and assess remaining vendor capabilities and functions from the Final Findings Report
  2. Demonstrate that the GC can operate the system once in production (including managing its data)
  3. Prove that the GC can successfully onboard federal departments and agencies to a new HR and pay system
  4. Demonstrate the full lifecycle costing for the program
  5. Prove the GC can streamline its operating model and pursue simplification opportunities

The scope of work outlined below was determined to encompass the efforts needed to assess feasibility against the five established criteria. While not all aspects of the full implementation were evaluated, the selected scope focused on key areas to inform a recommendation at this stage.

The feasibility project was overseen by a Delivery Status Committee and two enterprise-wide senior-level governance committees:

PMC supported the feasibility project by removing barriers and managing risks, approving change requests, and providing the challenge function on Project updates and results before they were presented to DMSG. DMSG provided overall oversight and guidance to the feasibility project through endorsement and approval of key Project risks, the decision-making framework, the implementation plan, the recommendation, and the Feasibility Report.

TBS-Office of the Chief Human Resource Officer (OCHRO) pursued activities that were complementary to the project, including exercising its role as the Business Owner for HR Management by identifying HR business requirements, validating outcomes and conditions of success, overseeing the development of comprehensive strategies for transition and improvements, working toward simplification and standardization, and exploring amendments to policy, regulations and legislation where necessary, as well as fulfilling its mandate to resolve claims and compensate current and former employees impacted by Phoenix.

All activities remained aligned with the mandate letters to the Minister of Public Services and Procurement and the President of Treasury Board, as they include significant efforts and resources in support of the commitment of advancing work on the Next Generation Pay and Human Resources System.

Project methodology

The objective of the feasibility project was to generate the evidence necessary to determine if the GC can effectively adopt a new integrated HR and Pay solution. To confirm Feasibility, an expanded set of requirements was collected and configured by Dayforce, and validated by GC users. Parallel pay runs in both Dayforce and Phoenix were used to validate bi-weekly pay accuracy, test post-payroll activities and interfaces, and determine the requirements for operating a two-pay system model during a phased transition. The activities and deliverables of the HCM feasibility project were completed jointly by GC employees and the vendor, Dayforce. In partnership with Dayforce, partner departments (PSPC, SSC, and the Pay Centre) dedicated resources to test the Dayforce solution to generate data and evidence to inform a final implementation and investment decision.

A small-scale pilot, called Vanguard, was conducted with Shared Services Canada (SSC) and PSPC to validate configurations, processes, and payroll operations. Data components included developing a data strategy and central data hub, expanding Artificial Intelligence (AI) tools, and selecting a data platform through a procurement process.

The Project was underpinned by interrelated project activities under 17 workstreams:

  1. Prove that the system can meet the GC’s full requirements and assess remaining vendor capabilities and functions from the Final Findings Report
    • Systems configuration
    • Human resource capabilities
    • Cloud extension development
    • Third party integration
    • Other technical development opportunities
  2. Demonstrate that the GC can operate the system once in production (including managing its data)
    • Post-payroll process design
    • Data, AI, and service frameworks
    • Data migration
    • Data hub procurement
  3. Prove that the GC can successfully onboard federal departments and agencies to a new HR and pay system
    • Vanguard department backlog reduction plan
    • Vanguard department preparedness plan
    • Artificial intelligence virtual assistant
  4. Demonstrate the full lifecycle costing for the program
    • Deployment option selected
    • Implementation plan development
    • Implementation plan costing
  5. Prove the GC can streamline its operating model and pursue simplification opportunities
    • Pay simplification
    • Enterprise Integrated Target Operating Model (EITOM)

Key deliverables included the configuration of the system in accordance with collective agreements, development of 15 interfaces, multiple data loads, simultaneous pay runs for two departments, and validation of functionality for 17 critical-to-pay capabilities and 11 additional HR capabilities which impact critical Core HR, Talent, Workforce Management and Benefits modules. The final output is this Feasibility Report summarizing findings, validating the confidence level for implementing Dayforce, and informing the decisions on continued investment in the business and digital transformation of HR and pay across the GC.

Project considerations and constraints

The feasibility project included mechanisms to evaluate progress and mitigate risks, as well as ongoing efforts to enhance HR and pay services. The Project operated within specific constraints, including defined timelines and a focused testing scope. These factors collectively shaped the assessment process and the information presented in this report.

Project gating: The feasibility project followed a structured approach with checkpoints and decision off-ramps to ensure that each stage is informed by up-to-date evidence. This methodology mitigates risks by ensuring that no commitments are made without proper assessment and risk management measures in place.

Current state alignment: Actions being taken to improve HR and pay services in the current state (introduction of artificial intelligence tools to support faster processing and backlog reduction, reduction in the number of different HR systems used in the GC, data standardization, etc.) are crucial contributors to GC readiness to adopt new processes and technologies. These activities were not directly evaluated as part of the feasibility project, but are discussed in Chapter 3 of this report.

Timeline constraints: The feasibility project operated within defined time parameters, with a structured approach to assess progress against key criteria.

Testing scope constraints: The testing phase was limited to requirements that are configurable within the existing Dayforce system. Certain GC-specific requirements remain outside Feasibility scope due to dependencies on future system updates, cloud extensions, or adjustments to GC requirements through simplification efforts.

Risk: The constraints listed above are part of an overall strategy to de-risk the project by placing limits on the duration, cost, and scope of each stage of the transformation and associated contracts. This approach is intended to minimize the pitfallsFootnote 1 of attempts to plan over lengthy periods of time and define a broad scope of deliverables up front, notably project delays, overreliance on a single vendor, underperformance or failure. However, until departments and users are onboarded to the new service, there will always be uncertainty and therefore risk about the future. The nature of enterprise-wide modernization means that risks cannot always be fully avoided at any single stage but rather must be tolerated and continuously managed by building in scope for iteration and adjustment as a project develops and is tested with its target users.

Decision-making framework

A decision-making framework provides a structured approach to guide the decision-making process; ensuring consistency and objectivity in decision-making. It outlines the steps, criteria, and considerations for making informed choices. Goss Gilroy (2017) noted that governance and oversight was inadequate for the implementation of Phoenix, and that the challenge function could have been better exercised by stakeholders if there had been more transparency on progress so that potential challenges could be identified and possibly avoided. The decision-making framework developed for the feasibility project was designed as a tool to provide decision-makers with the information they needed to make sound decisions both during the Project and at its conclusion. The intent was to provide sufficient quantitative and qualitative information on the progress of workstreams and each feasibility criterion in addition to an overall rating and binary Yes/No recommendation. The framework was developed after several rounds of consultation with subject matter experts and stakeholders and was formally approved, after going through the appropriate levels of governance, by the DMSG.

This report includes results from the activities completed by each project workstream in 2024-25. Given the time and testing constraints, to provide an adequate level of confidence, the workstream activities under each of the five criteria were evaluated independently for:

  1. the level of completeness
  2. the quality of the results

Each project team developed relevant completeness and quality measures, considering pertinent factors related to their workstream and the established criteria for the feasibility project. Each team defined ranges for each measure using standard labels, as follows:

Completeness: Assessed against specific commitments related to the scope of the feasibility project.

Quality: Assessed based on professional judgement, lessons learned, available benchmarks, and the stated goals of the feasibility project. Scores reflect the work completed within the scope of the feasibility project itself, not necessarily to the standard required to implement a new solution.

Results were weighted within an overall framework based primarily on quantitative analysis to ensure objective and measurable outcomes. Additionally, a structured qualitative assessment approach was integrated, factoring in the relative scope, effort, complexity, significance, and risk of each activity. At high-level, rolling up each workstream to its associated criteria forms three equally weighted groupings:

The combined results, along with a Residual Risk assessment formed the basis of the evidence and recommendation to guide decision-makers.

The residual risk assessment identified risks remaining following the feasibility project to inform future planning. The ratings applied are meant to provide decision-makers with sufficient information to determine whether the cumulative risk of proceeding at this point is tolerable, by demonstrating that:

These results and risk assessments are presented in chapter two of this report.

There are benefits and drawbacks to the framework used, in terms of its ability to reliably inform decision-makers. Lessons learned and best practices were considered and applied in creating a framework specific to the scope and goals of each activity within the feasibility project. The results of different types of work could be combined and presented alongside each other in a comprehensible format. Each workstream could focus their measures on the most reliable qualitative or quantitative indicators of success at this point in the overall HR and pay transformation. Due to the limitations on what could be measured at this point, some of the ratings and benchmarks are based on the experience of Subject Matter Experts and refinements made based on advice from PSPC Internal Audit as an additional assurance measure.

Critical thresholds

While the framework is intended to guide decision-makers only, the Project did set 2 minimum thresholds for recommending continued investment. These thresholds are considered “dealbreakers” that would automatically trigger a no-go recommendation.

  1. An overall Quality score, based on combined and weighted quality results from all workstreams, in the “Insufficient” range (regardless of the level of completeness) would generate a no-go recommendation
  2. A Quality score for the five Dayforce criteria (system readiness), combined and weighted, in the “Insufficient” range would also generate a no-go recommendation

Chapter 2—Findings

Table 2: Overall, the workstream activities were sufficiently completed to an adequate quality to substantiate a recommendation based on the five feasibility criteria:
Feasibility criteria Completeness Quality
1. Prove that the system can meet the GC’s full requirements, and assess remaining vendor capabilities and functions from the Final Findings Report (33% weight) 89.7%
Sufficiently complete		 90.7%
Excellent result
2. Demonstrate that the GC can operate the system once in production (including managing its data) (33% weight) 95.5%
Fully complete		 74.9%
Insufficient result
3. Prove that the GC can successfully onboard federal departments and agencies to a new HR and pay system (14% weight) 88.5%
Sufficiently complete		 91.8%
Excellent result
4. Demonstrate the full life-cycle costing for the program (10% weight) 100%
Fully complete		 80%
Adequate result
5. Prove the GC can streamline its operating model and negotiate simplification opportunities (10% weight) 89.5%
Sufficiently complete		 91.3%
Excellent result
Overall 92.4%
Sufficiently complete 		84.6%
Adequate result
Table 3: While the decision-making framework was intended to guide decision-makers only, as noted in Chapter 1, the Project set two minimum thresholds for recommending continued investment. These thresholds were considered “dealbreakers” that would automatically trigger a no-go recommendation. The results surpassed the critical thresholds, as outlined below:
Critical threshold Final result

1. An overall quality score, based on combined and weighted quality results from all workstreams, in the “Insufficient” range (regardless of the level of completeness) would generate a no-go recommendation

 The final quality ratings fell into the adequate range overall (84.6%).

2. A quality score for the five Dayforce criteria (Criterion 1, system readiness), combined and weighted, in the “Insufficient” range would also generate a no-go recommendation

 The final quality ratings fell into the excellent range for Criterion 1 (90.7%).

While progress was less than desired in some areas, there were no insurmountable issues or obstacles encountered by any workstream. Completion of unfinished work is planned as part of pre-implementation activities (FY 2025-27). All outstanding risks and issues have a feasible path to resolution.

A few workstreams encountered delays or challenges due to the nature of the development of the system; all delays were managed through a structured change management process to ensure alignment with the project scope defined at the outset. All workstreams were able to sufficiently complete critical milestones to make a qualitative assessment of progress. Of note, the Project also reported “over-delivery” in some areas (for example, an additional cloud extension for pension requirements is expected to be delivered in Spring 2025, months ahead of schedule).

A summary of the results and findings of the feasibility project is presented below, organized by the 5 pre-established criteria. A more in-depth analysis of the overall results follows.

Findings by criteria and workstream

Criterion one

Prove that the system can meet the GC’s full requirements and assess remaining vendor capabilities and functions from the Final Findings Report (total weight towards Feasibility = 33%)

  1. System configuration (13%)
  2. HR capabilities (5%)
  3. Cloud extension development (7%)
  4. Third party integration (5%)
  5. Other technical development opportunities (that is, security & accessibility) (3%)

Overall completeness: 89.7% - Sufficiently complete

Overall quality: 90.7% - Excellent result

Dayforce proved that it could meet the GC’s requirements through:

The above activities advanced the overall readiness of Dayforce for a GC implementation as planned and provided sufficient evidence that Dayforce can complete cloud extensions to meet GC needs. However, Dayforce only partially completed delivery of their product enhancements and the Rate of Pay cloud extension (53 of 77 requirements). The Rate of Pay cloud extension is one of the most complex and critical cloud extensions required and, once fully complete and validated, should increase the GC’s confidence in Dayforce’s ability to design, develop, and deliver complex cloud extensions to address GC specific gaps. The Rate of Pay cloud extension is set to be delivered and ready for GC validation in May 2025. If there are further issues or delays this could impact the delivery timeline for other cloud extensions and could mean that some of the more complex cloud extensions require more time, effort, and resources than previously estimated. Plans, timelines, and costs would need to be adjusted accordingly.

Overall, the work completed by the Criterion One workstreams showed that the system is operating as designed and the majority of issues encountered were capable of being resolved. Specific solutions for gaps in functionality continue to be explored and addressed as they arise.

At the time the NextGen HR and Pay Final Findings Report was published (February 2024), there were 90 known identified gaps:

Since then, significant progress has been made to address these gaps:

Additionally, several gaps were re-categorized, cancelled, or confirmed as overlapping with other solutions. The remaining gaps are now:

As a result of these efforts, the total number of outstanding gaps has been reduced from 90 to 53, and all gaps can be met through the planned resolutions listed above.

The progress and qualitative assessment of the results provide the GC with the confidence that Dayforce can deliver a fully configured solution. Any delays can be absorbed through planned contingencies.

A key finding is that cloud extensions overlap and depend on each other more than previously realized. For example, as the team continued the validation work on the Rate of Pay cloud extension, additional requirements were identified. As a result, changes to delivery timelines were necessary to resolve issues, redefine requirements, and account for interdependencies between different cloud extensions. Of note, the overlapping interdependency means that if decommissioning of all or part of a cloud extension is ever required, PSPC would need to work with Dayforce to ensure “broken links” are addressed during the process. Accordingly, business transformations to avoid cloud extensions should continue to be pursued where possible and where the cost/benefit analysis demonstrates it to be the most advantageous course of action. This includes coordination with Pay Simplification efforts to reduce the need for extensions where practical, beneficial and cost effective.

Remaining work: To progress to full readiness for a production pilot and implementation, Dayforce and the GC will need to complete the following activities as part of pre-implementation activities (2025-2027):

PSPC will need to ensure that all configuration, including cloud extensions, interfaces, and necessary roadmap releases have been delivered prior to end-to-end testing, which is scheduled to begin in December 2026. Delays, additional costs, or manual workarounds are likely, but this commitment to fulsome testing would prevent major consequences during implementation. Specifically, cloud extensions could require more time and resources than previously estimated, including GC efforts to collect, validate, and endorse requirements with implicated business owners as part of testing.

Following completion of the feasibility project, the GC has assessed Dayforce against 17 critical-to-pay capabilities and 11 prioritised HR capabilities, based on the functionality needed to deploy for SSC and PSPC. A further 14 HR capabilities are included in a complete HR and Pay Business Reference Model for the GC, and will be assessed to determine whether or not they are required in a single enterprise solution. PSPC and OCHRO will need to ensure that Dayforce can align with GC requirements for all HR capabilities (beyond those prioritized for Feasibility) currently being delivered through legacy core HR systems (MyGCHR and various PeopleSoft versions, HRMIS, SAP, etc.). PSPC will need to work collaboratively with all stakeholders to make sure solutions are available to meet the end-to-end employee life-cycle business needs of each unique department to avoid decreasing operational efficiency or causing hardship to employees in those departments.

Building on the work completed to date, security and accessibility requirements will need to be continually reconfirmed as the configuration of Dayforce progresses. The penetration test done by Dayforce was sufficient for the feasibility project, but for the next phase the GC will need to be more thorough to ensure the system is secure. Therefore, a more involved penetration test will be conducted to identify any weaknesses so they can be fixed before going live.

The residual risk of Dayforce not delivering a fully configured solution in time and delaying onboarding is therefore rated as high. PSPC will closely monitor Dayforce’s delivery schedule to ensure that GC users can confirm and test all critical-to-pay processes prior to the first deployment wave scheduled for 2027.

Criterion two

Demonstrate that the GC can operate the system once in production (including managing its data) (Total weight towards Feasibility = 33%)

  1. Post-payroll process design (20%)
  2. Data, AI, and service frameworks (5%)
  3. Data hub procurement (3%)
  4. Data migration (5%)

Overall completeness: 95.5% – Fully complete

Overall quality: 74.9% - Insufficient quality

The feasibility project assessed the GC’s ability to operate Dayforce alongside other enterprise systems and processes (that is, finance and pension). Vanguard also tested the feasibility of running parallel bi-weekly pay in two systems by testing post-payroll processes with both Vanguard departments. Previously untested post-payroll processes were executed through Dayforce and the assessment is being used to design processes for operating two pay systems in parallel.

Dayforce was able to integrate with third party systems and conform to Receiver General controls, such as balancing the GC’s General Ledger, though some workarounds were required to deem this feasible. Challenges remain to enable the seamless flow of data between pay and legacy financial systems and systems supporting the Receiver General framework. These challenges and complexities are documented and will be resolved in subsequence phases of the transformation. Nine out of eleven interface outputs from system are aligned to GC requirements, while two pension specific interface outputs were not aligned.

Data modernization efforts are progressing, but more slowly than originally planned. While the overall adoption rate of enterprise data standards is currently low, the level of participation in departmental engagements (over 80 GC organizations) indicates the motivation to improve is high. Many GC organizations are limited in their ability to adopt the standards until planned HR systems updates occur, which is expected this calendar year. Other barriers to adoption are being investigated and addressed. There has also been improvement in the success of data loads. This success is informing the development of a reliable, flexible, scalable GC Data Migration Solution.

A Request for Proposal (RFP) for a central data hub was not completed as planned during the feasibility project due partly to insufficient resources. While suppliers were initially engaged through an Invitation to Qualify (ITQ) process, this process was delayed several weeks as a result of a pivot to a Canada First procurement strategy. The ITQ was reposted 25 February 2025, however, the GC was not able to assess the number of qualified suppliers participating by 31 March 2025. Detailed requirements for the RFP are being drafted with a plan to publish in Spring 2025 without impacting other workstreams. This insufficient result (0%) pushes the overall quality score for criterion 2 slightly into the insufficient range (<75%).

Despite the delay in procuring the Data Hub, the development of the GC’s Data Migration Solution remains unaffected. Data cleansing, standardization, integration of HR and pay data, and production of Dayforce import files will continue to be performed and enhanced iteratively in the Interim Data Hub until the final solution is complete and the tool and data can be migrated into the end-state Data Hub.

Remaining work: To progress to full readiness for a production pilot and deployment of Dayforce, the GC will need to complete the following activities as part of a pre-implementation phase (2025-2027):

The data generated in two pension integration files did not align with GC requirements, but the pension cloud extension has not yet been deployed and validated, so this was not unexpected. To resolve this, a detailed analysis of pension data gaps between Dayforce outputs and GC requirements will be conducted. Dayforce will deliver the pension cloud extension to resolve identified gaps and generate the required pension files post-payroll. The intent is to conduct iterative testing cycles with PSPC Pension team to validate output accuracy and, in the longer term, ensure pension integration is aligned with the broader GC interoperability and pension modernization activities.

Data migration is a critical dependency for future operations. Any transition away from current systems without a reliable, efficient method for extracting, standardizing, converting, and loading data to a new solution could have devastating results, regardless of the capabilities of the new system. Poor data quality could compromise the depth and reliability of testing activities prior to implementation.

PSPC will proactively support departments with readiness assessments that identify data quality issues or inconsistencies between existing systems to be addressed prior to data migration. Poor quality data and partial adoption of data standards would hinder other efforts to increase efficiency and accuracy pay processing, such as AI integration.

The central data hub is being designed to assist with data migration and dual pay system operation during the transition. Implementing it would also help to modernize interoperability between other internal HR and pay systems (for example, HR, pay, pensions, case management, etc.) but also with external systems (for example, Departmental Financial Management Systems (DFMS)). The data hub could also serve as the data archiving solution for the departments to decommission their legacy system after onboarding.

PSPC needs to advance the development of these critical pieces of enterprise infrastructure to avoid major delays or consequences during implementation. The residual risk of the GC not being able to adequately manage data and implement the system on schedule is rated as moderate. To address this risk, PSPC will continue to develop its own data capacity, processes, and tools while supporting the adoption of data standards in each department across the enterprise.

Criterion three

Prove that the GC can successfully onboard federal departments and agencies to a new HR and pay system (Total weight towards Feasibility = 14%)

  1. Vanguard Department Backlog Reduction Plan (5%)
  2. Artificial Intelligence Virtual Assistant (2%)
  3. Vanguard Department Preparedness Plan (includes Change Management) (7%)

Overall completeness: 87.5% - Sufficiently complete

Overall quality: 91.8% - Excellent result

The two Vanguard departments, SSC and PSPC, were pathfinders in assessing assumptions about the feasibility of achieving various departmental readiness conditions. The workstreams helped to assess the level of effort, time, and resources required for the Public Service Pay Centre and its client departments to meet those conditions. The Backlog Reduction Plan workstream validated the feasibility and approach for the elimination of backlog transactions for departments and agencies prior to future onboarding. A dedicated team at the Pay Centre was successful in reducing the backlog of SSC’s pay cases by 90.5% (from 12,281 cases to 1,161 as of March 27, 2025) in preparation for onboarding, scheduled for 2027 at the earliest. The Pay Centre continues to make progress on the SSC backlog toward a ready state, and operational mitigation strategies are in place to maintain a stable queue for the department. The Pay Centre has also developed a high-level operational plan that balances both PSPC readiness for Dayforce while ensuring progress in resolving the backlog of older cases across all Pay Centre departments.

The Artificial Intelligence Virtual Assistant (AIVA) pilot processed 4,000 cases between October and December 2024. AI generated outputs were deemed relevant and factually accurate and Compensation Advisors assisted by the tool were able to consistently close cases faster. This demonstrated the potential of AI to help enhance Compensation Advisor productivity. Pilot testing is complete and the AIVA is now pivoting to bulk processing; the AIVA will no longer focus on case types, but on feature development and functionality across all case types. After the pivot, AIVA metrics will be calculated on “amounts of cases affected and/or closed by AIVA bulk processing”.

The Vanguard Department Preparedness Plan developed an Enterprise Change Management Strategy containing the tools required to ensure departments will be ready to adopt the new solution. Tools, reporting metrics, communication materials, and specialized training have been developed and socialized to support departments with active stakeholder collaboration.

Remaining work: If departments encounter delays in meeting onboarding conditions it could affect overall timelines and/or costs. PSPC and OCHRO must define the parameters (minimum baselines) for each readiness activity and ensure they are communicated clearly to departments. Though a strategy has been developed as part of the feasibility project, the detailed plans have yet to be tested. The strategies and plans developed during the feasibility project will provide tools to assist organizations in establishing their internal plans, to assess the state of Organizational Chart data, to determine the volume of transactions requiring action, and establish resource requirements. Broader socialization of the tools and work to establish readiness metrics will occur post-Feasibility.

The success of change management activities is largely dependent on an enterprise and departmental commitment to make HR and pay transformation a priority, and to provide adequate funding. PSPC, TBS- OCHRO, central agencies, partner departments and agencies, and other key stakeholders must ensure that sufficient resources are assigned and dependencies are prioritized.

PSPC was identified as the second Vanguard department to be prepared for Dayforce. PSPC will have to ensure that the Pay Centre is adequately prepared to meet backlog reduction targets without compromising current service standards and other enterprise-wide commitments, such as pay equity. The Pay Centre will need to deliver on its operational plan to achieve Vanguard department readiness for Dayforce while maintaining progress in resolving the backlog of older cases across all Pay Centre departments.

The residual risk that the GC will not be able to onboard federal departments and agencies to a new HR and Pay system on schedule is therefore rated as high. PSPC will work to ensure active communication of lessons learned at each wave of implementation to promote continuous improvement, and the efficient application of resources, enhancing departments’ ability to manage and adapt to change effectively.

Criterion four

Demonstrate the full lifecycle costing for the program (Total weight towards Feasibility = 10%)

  1. Deployment option selected (2%)
  2. Implementation plan development (4%)
  3. Implementation plan costing (4%)

Overall completeness: 100% - Fully complete

Overall quality: 80% - Adequate result

An approach to deployment featuring two systems running in parallel was selected as it incorporated lessons learned from past HR and pay transformation efforts as well as feedback from extensive stakeholder engagement. After the selection of the deployment approach, an Implementation Plan was developed, integrating a phased approach, onboarding conditions, and system considerations. The analysis incorporated internal and external best practices, drawing on resources such as Gartner, Dayforce, EY, CGI, and internal governance bodies and departments. The Implementation Plan was endorsed by the DMSG in January 2025.

Both Phoenix and Dayforce will need to function in parallel until all pay accounts are transitioned successfully to Dayforce. This period of dual-systems operation will be technically complex, especially when resolving issues for pay accounts across both systems. This poses a significant risk.

The selection and endorsement of the deployment option and the implementation plan helped define the scope and scale of the initiative, which assisted in validating assumptions to refine costing estimates. Over the past year, the cost estimation approach for HR and Pay Transformation has become more structured and data-driven. The costing team incorporated multiple estimation techniques, including parametric and activity-based methods, to improve the quality of the estimate while applying risk and uncertainty analysis to establish a defensible contingency.

Extensive consultations and collaboration with key stakeholders, including the Chief Financial Officer Branch (CFOB), Office of the Comptroller General (OCG), and Office of the Chief Information Officer (OCIO), have strengthened the credibility of cost estimates. However, significant challenges remain due to the unique nature of this transformation and the complexity and uncertainties inherent in an initiative of this scale. Estimating costs for an HR and pay business and digital transformation spanning nearly a decade requires making assumptions in an environment where key variables—such as evolving technical requirements and the costs of running legacy and new systems in parallel—are not yet fully defined. Furthermore, accessing relevant benchmarking data to compare this pathfinder project with similar initiatives remains a challenge. The complexity of integrating financial planning with an initiative of this magnitude means that ongoing refinements will be necessary as more information becomes available. The full lifecycle costing for the initiative was therefore not presented to DMSG for endorsement before March 31, 2025, as planned.

Remaining work: Delays, unplanned activities or additional complexities could require adjustments to the implementation plan, thereby extending timelines and prolonging the period of dual-system operations. This could lead to cost overruns.

A refined high-level plan for the next phase of the HR and Pay Transformation Project is currently in development and is expected to be finalized in Spring 2025. This plan will support costing exercises and provide a structured approach for the next phases of preparation and implementation. While PSPC does not have a specific cost to run two systems in parallel, the assumptions and cost implications will be assessed through the third-party review of the estimates that will be required by December 2026. Through the third-party review, PSPC would seek access to comparable projects to assess the estimate of this project.

Goss Gilroy (2017) noted that a key risk in costing major transformation initiatives is to assume that any efficiencies, cost savings or service quality will materialize quickly. Given this lesson learned, any projected efficiency gains should not be included in financial planning unless they are based on realistic timelines and past performance. As HR and pay transformation progresses, upcoming decision points will require clear evidence of the transformation’s value, including benchmarking future operating costs against the current state. By reinforcing the team and maintaining a rigorous, adaptive approach, PSPC aims to improve cost predictability and support informed decision-making at every stage.

As a result of the work completed during the feasibility project, the residual risk of the cost and schedule estimates being inaccurate is moderate. Looking ahead, PSPC remains committed to strengthening cost practices by continuously refining estimates based on actual expenditures and benchmarking against industry best practices.

Criterion five

Prove the GC can streamline its operating model and pursue simplification opportunities (Total weight towards Feasibility = 10%)

  1. Pay simplification (5%)
  2. Enterprise Integrated Target Operating Model (EITOM) (5%)

Overall completeness: 89.3 - Sufficiently complete

Overall quality: 91.3% - Excellent result

As the Business Owner, TBS-OCHRO planned to address the GC-specific gaps identified in the Final Findings Report by advancing negotiations on four HR and pay simplification opportunities. Completed activities include reviewing pay simplification position papers, signing Memoranda of Understanding with a significant number of bargaining agents, and presenting a strategy and engagement plan to DMSG, developing collective agreement language, and holding consultations with bargaining agents. During the reporting period, bargaining agents have been engaged and have participated in pay simplification discussions. This can be interpreted as a positive signal that there is an openness towards pursuing simplification opportunities. Although this suggests that the GC can indeed pursue simplification opportunities, no agreement has yet been reached with bargaining agents and negotiations must continue to amend and reopen collective agreements.

At the same time, PSPC pursued the development of cloud extensions to address GC-specific gaps through technological means. The cost-benefit value of each simplification solution is constantly being reviewed. In some cases the cost to develop and subscribe to a cloud extension is less than simplifying the pay rules in employer policies or collective agreements. TBS-OCHRO therefore decided that of the four originally identified opportunities, one is paused, one is under review, and two are advancing in parallel to the development of corresponding cloud extensions.

However, a key lesson learned from previous HR and Pay transformation efforts was “simplification prior to implementation” to align business processes as much as possible to the structure of an IT solution rather than customizing it. A small number of cloud extensions are unavoidable to address unique GC requirements that will not change. However, each additional extension adds potentially compounding complexity.

TBS-OCHRO also advanced work on the Target Operating Model (TOM) for HR and Pay at both the enterprise and departmental level. An Enterprise Integrated Target Operating Model was approved by Program Management Committee in May 2024, validating assumptions for the way forward and providing clarity on roles of key stakeholders: the Business Owner, the Pay Administrator, the Project Sponsor, the Technical Authority, and the implementing departments. The Enterprise Integrated Target Operating Model outlines the interactions between stakeholders required to achieve the goal of delivering accurate and timely pay and HR services.

Remaining work: Progress to define the full suite of HR capabilities available in Dayforce is underway. Moving forward, TBS-OCHRO will design a set of Departmental TOMs using a system agnostic approach, until there is sufficient configuration of the solution to warrant tailoring it to a specific department that would be supported by Dayforce.

If HR and pay simplification negotiations take longer than expected, it will be possible to implement Dayforce using cloud extensions. These extensions could then be de-activated fully or in part at a later date if they are no longer required. Negotiations will continue post-feasibility with the objective of obtaining the concurrence of all bargaining agents on pay simplification solutions. There will be a need to revisit the engagement strategy or approach if negotiations are not successful. Moreover, as the validation of GC requirements in Dayforce advanced, additional gaps that had not been identified in the NextGen HR and Pay Final Findings Report emerged. As a result, cloud extensions now address a broader range of requirements than initially anticipated, expanding their scope. New opportunities for simplification are also expected to emerge, potentially necessitating additional negotiations with bargaining agents.

It should be noted that not all simplification requires negotiation with bargaining agents. There are many opportunities for GC business owners to simplify processes on their own or in collaboration with other business owners. For example, adopting built-in Dayforce back office functionality could simplify elements of pay disbursement. This would require modifications to GC processes including potentially significant changes to the Receiver General (RG) Framework support but would prevent additional development within the Dayforce platform to address current gaps. Until the full legislative, operational, control and system impacts of those modifications is fully assessed, it is not possible to determine the preferred approach for all stakeholders.

If accountability, roles, and responsibilities among key stakeholders (PSPC HCM, Pension, and Receiver General branches; TBS-OCHRO, TBS-OCG, and TBS-OCIO; the vendor; departments and agencies) are not clearly defined, understood, and funded, then this misalignment could lead to confusion and delayed decision-making during implementation. Unless alternative sources of funding or alternative ways of completing the target operating model are identified, organizations will be expected to onboard with only generic change management strategies and tools. This implies that the business readiness and change management responsibilities would belong to departments themselves, possibly supplemented by PSPC as the project authority, thus repeating a failure from the implementation of Phoenix.

Therefore, the residual risk that the GC cannot successfully simplify its operating model and rules is rated as high.

Overall findings

The main finding of the feasibility project is that Dayforce has demonstrated that it should be able to meet GC-specific requirements. The GC, however, has shown that adapting its own business rules, processes, and data management practices at the pace needed to adopt a modern solution still presents a challenge.

A successful GC implementation of Dayforce is therefore feasible, but not yet a certainty. Work to fully prepare Dayforce for a GC deployment is progressing steadily, however the work to prepare the GC to adopt Dayforce is progressing more slowly. If the GC still intends to adapt to adopt there is a significant amount of work remaining, especially when the concurrence and cooperation of various business owners, stakeholders, and bargaining agents is needed to update processes or pay rules away from the status quo. It is likely that the GC will face resistance or other challenges adequately preparing its organizations, workforce, and data for an HR and pay business and digital transformation.

Detailed readiness assessments for each department and wave will need to be closely monitored. To avoid delays, PSPC and OCHRO will need to support departments and agencies and enable them to participate, but also hold them accountable for their role in preparing for the transition. For example, organizations that have not achieved their readiness conditions on schedule will be moved to a back-up wave to avoid delaying implementation for those departments that have met the defined conditions.

This back-up wave is one example of the mitigations in place to address residual risks and limit the transformation’s overall exposure. While risks remain following the completion of the feasibility project activities, sufficient and appropriate actions are being taken going forward to monitor and address each of them before onboarding can begin. Time and budget contingencies that reflect the uncertainty and risk specific to each workstream are included in implementation planning, and will continue to be refined and updated as the project progresses.

The next phase of HR and pay transformation will address risks by simulating worst-case scenarios and mapping interdependencies to evaluate the project’s resilience to cascading failures, cumulative, or aggregate risks. Increased oversight and reporting will permit risk tracking and periodic reviews to share progress with decision-makers.

Chapter 3—Considerations & risks

Dependencies

Concurrent pay stabilization activities

TBS-OCHRO and PSPC support Phoenix and the current HR systems. They must continue that support until the GC successfully implements Dayforce. Planning the sequence of change is important, not only to address root causes early, but also to avoid causing unnecessary disruptions. By reducing the number of existing HR systems through onboarding to the current enterprise-wide standard, MyGCHR, implementing a data strategy and standards across the enterprise, and exploring alternative tools (AI, Case/Client Relationship Management (CCRM)) and service delivery models (internal and external), the GC can be in the best position possible to pay its employees accurately and on time today while preparing and informing change management strategies for a digital transformation in the future.

Efforts to simplify pay, streamline processes, and improve compliance with data standards will be technical dependencies for the transition to Dayforce. More importantly, their success will support the cultural shift needed to get the most value from the business transformation, regardless of the software being used.

Parallel initiatives

GC Jobs Transformation (GCJT) project

The Public Service Commission (PSC), as the independent agency with a mandate that comprises legislative obligations related to merit-based hiring into the federal public service, is the business owner for the current and future recruitment platform. While maintaining its independence, the PSC remains a key stakeholder that forms part of the HR and Pay Transformation governance. PSC is responsible for the recruitment component of the future HR and pay solution under the GC Jobs Transformation (GCJT) project. Originally implemented GC-wide in 2003, the current platform is dated and does not satisfy the full spectrum of job seeker, hiring manager and human resources (HR) professional needs. As a result, the PSC intends to transform recruitment across the federal public service. The goal of GCJT is to provide the GC with an adaptable, modern, user-centric digital recruiting solution. HR business processes related to recruitment, onboarding, and workforce management were designed and configured as part of the feasibility project.

Departmental Financial Management Systems (DFMS) modernization

Pay is a financial transaction, and there are significant financial requirements that any pay system must meet, both pre- and post-payroll. Though not in scope for the feasibility project, PSPC worked with the Office of the Comptroller General (TBS-OCG) in FY 2024-2025 to leverage their expertise in Financial Administration Act policy compliance and integration. Meeting these requirements will be a key part of assessing the GC’s full enterprise readiness for transformation in the next phase.

TBS-OCG, as the Business Owner for financial systems, is currently engaged in the modernization of several Departmental Financial Management Systems (DFMS), as most are at or near end-of-life. TBS-OCG assessed the feasibility of successfully implementing Dayforce in the context of HR and pay financial management (FM) requirements. The assessment evaluated whether Dayforce could directly meet FM requirements or would require integrated third-party solutions.

The key finding was that OCG has confidence that the FM requirements related to HR and pay can be met, and – in the context of FM – Dayforce is feasible. However, meeting the FM requirements is dependent on the development of complimentary services in the future-state financial management systems. Of note, the current Dayforce configuration does not fully comply at this stage with key directives and guidelines, including the Financial Administration Act and Directive on Delegation of Spending and Financial Authorities. While these requirements were not configured and validated as part of the scope of the feasibility project directly, PSPC is including a broad range of stakeholders in requirements definition to uncover gaps early, and plan for them.

The proposed HR and Pay solution must integrate with the Digital Signing Authority (DSA) service, address data latency issues, implement a salary forecasting solution, and ensure a full review of pay transaction processes and financial management controls to meet future financial system requirements and compliance standards. Solutions will be explored as part of the next phase of the project to ensure the seamless and timely flow of information between HR, pay, and finance systems and processes. This will require coordinated improvements and collaborative effort between HR and pay systems and financial system modernization teams to design and implement.

Other change management activities

Unified Actions for Pay (UAP) and departmental surcharge initiatives

The UAP, launched in Summer 2024, is an initiative that consists of seven new measures to be implemented by departments and agencies to reinforce best HR and Pay practices and increase the reliability and consistency of HR data. This initiative is helping with the accuracy and timeliness of pay delivery for employees and minimize impediments to the successful implementation of the HR and Pay transformation. These measures are centered around the use of self-serve functions, complete and up-to-date employee information in HR systems, as well as HR actions for managers.

The Departmental Surcharge initiative (also launched in Summer 2024) was implemented to incentivize departments and agencies to be timelier with their HR submissions and alleviates the additional manual workload and strain on the Pay Centre. As a first phase of this initiative, PSPC launched a mock billing period to explore the possibility of a departmental surcharge in June 2024. This would reduce the Public Service Pay Centre’s manual processing workload related to late transactions and improve enterprise performance, deliver accurate and timely pay to public servants.

Through engagement with departments and agencies and thorough analysis, some findings have revealed that there are systems limitations and operational realities that limit clients’ compliance with the UAP measures and Departmental Surcharge initiatives. This includes limitations stemming from existing directives and policies. These findings further support the need for HR and pay transformation, and to invest time in change management strategies. The challenges and realities experienced by departments are informing details of the change management and data management strategies.

User Awareness Sessions (UAS)

Along with the feasibility project, PSPC conducted User Awareness Sessions (UAS) to actively involve GC employees in the evolution of HR and pay, and to further validate Dayforce by allowing a diverse group of users to trial an out-of-the-box version. The initiative began with users from the Human Capital Management Branch of PSPC. Later, it was expanded to Vanguard departments (SSC and PSPC), and then to several other departments across the GC. Hour-long awareness sessions included a task workbook and questionnaire to collect feedback on participants’ overall impressions. Over 3000 public servants participated (in both Official Languages); the majority of participants reported that they found Dayforce simple and easy to use and some of the suggestions made to improve the system can be implemented. PSPC intends to use the data collected to shape future change management initiatives, resources, training, and activities. Of note, the results indicate that some users are skeptical that Dayforce will make it easier for them to do their jobs as many of the scenarios used were too simple. This finding highlights the need for targeted engagement and change management efforts for all types of users, especially for the employees who will use it every day.

Engagement with the Public Service Pay Centre

To keep the compensation community included in implementation planning, members of the feasibility project team conducted multiple visits to the Public Service Pay Centre in Miramichi. The aim of these visits was to identify any potential gaps or challenges in the draft implementation plan by presenting it to and capturing the views and perspectives of Compensation Advisors (CAs) and other pay subject matter experts. Potential pitfalls associated with parallel pay system operations were identified that planners should consider for future phases. The team incorporated the feedback provided by the Pay Centre into implementation planning. The engagement sessions also revealed how critical Pay Centre involvement will be to future planning considerations. Of note, the sessions revealed the need for a tailored change management plan specifically geared towards Pay Centre employees.

Strategic risks and other considerations

Several strategic risks emerged during the feasibility project, which are outlined below:

Fragmented governance and siloed approval paths

Some delays during the feasibility project were due to unclear decision-making pathways. For example, after receiving initial endorsement on the Rate of Pay cloud extension, some requirements had to be redefined to account for their impact to multiple organizations across the GC that were not initially consulted.

Part of the GC’s challenge is that some of the lessons identified during previous HR and pay transformation efforts have not been applied. Goss Gilroy (2017) recommended future transformation efforts assign accountability and authority to a single office. Notwithstanding the creation of the Enterprise Pay Coordination Office within PSPC, responsibilities for HR and pay transformation remain divided between two separate GC departments (TBS-OCHRO as HR Management Business Owner, and PSPC as Enterprise Pay Service Provider and Project Lead). Divided responsibilities between two departments sharing responsibility for interdependent transformation activities, with disparate departmental priorities, caused challenges in information sharing, and made synchronization of activities and tracking of progress difficult. Moreover, messaging from both departments was sometimes misaligned generating confusion amongst stakeholders.

As of April 1, 2025, a new delivery structure will be in place to ensure rapid informed decision-making and delivery. A single delivery execution lead, the Associate DM of Enterprise Pay Coordination, will be responsible for prioritizing governance decisions and coordinating activities across organizations.

Compounding technical complexity

As system design and configuration progresses, technical risks and issues are becoming increasingly interconnected. The technical landscape is complex and siloed, and a failure in one area could delay or halt progress in another critical area. Integration issues are not just about individual system delays but multiple layers of interdependencies across configurations, security protocols, and data transfer.

Some unforeseen dependencies were uncovered during the feasibility project which indicate that more cross-functional collaboration is required to ensure that interdependencies are better understood and alignment and sequencing of activities is prioritized. For example, data mapping for data migration was conducted in advance of system reconfiguration which resulted in poor data quality. In the early stages of this project, many of these issues were deferred as being out of scope for each workstream’s specific goals. As the project progresses to pre-implementation, these dependencies are being accounted for in project planning.

In Goss Gilroy’s (2017) view, it was the underestimation of the Phoenix initiative’s complexity that led to its downfall. While cloud extensions are meeting complex requirements so far, relying on a vendor to resolve each unique challenge faced by GC organizations with a technological solution may repeat this error. The wide ranging scope of HR and pay business and digital transformation must be recognized (not limited simply to a system replacement), defined, and managed appropriately with explicit outcomes tied to overall success. Full, end-to-end testing with a broad spectrum of real users (for example, Compensation Advisors, Managers, employees, etc.) will be completed to ensure all doubts regarding success have been addressed before implementation.

Data governance and integrity

Data migration concerns were reported across multiple workstreams. Data integrity is a major enabler for successful project delivery with downstream effects on other validation activities. Data migration must be strategically planned to avoid unrealistic timelines, resource constraints, and conflicts with other workstreams. These challenges were resolved for the purposes of the feasibility project, but their importance will increase as the project progresses towards Enterprise Testing. Dependencies between data migration and other program activities (for example, design, configuration, and testing) must be documented and accounted for in the pre-implementation phase.

PSPC will need to invest time and resources developing repeatable processes for data tests and conversions, and increase their frequency. Thorough profiling of the source data to identify data quality issues should be performed before data migration. Additionally, GC needs visibility into the data after the vendor has applied value mapping and other transformations in order to run quality checks. PSPC will also need to enable departments to participate in the verification of their converted data, and clearly outline their expectations and responsibilities for data cleansing and validation prior to onboarding.

Change management and culture

Over the next few years, active participation and committed leadership from all stakeholders will be critical to avoid implementation challenges or delays. There could be resistance to change due to a lack of trust, or the perception of possible job losses and other employee hardships. Unclear direction, misaligned communication, and non-targeted training could lead to confusion, frustration, and reduced employee trust. Departments will need tailored support from PSPC and TBS-OCHRO to achieve their readiness conditions. Communications and change management efforts will need to be aligned.

Complicating matters, most of the external partner organizations have not been funded directly for the role they will need to play. Lessons learned reports agree that change management must be treated as a priority, not optional or expendable when looking for ways to reduce timelines or cut costs. If PSPC, central agencies, partner departments and agencies, and other key stakeholders do not have sufficient capacity, resources, and expertise in place to meet the onboarding conditions and adhere to readiness timelines, implementation could be delayed. PSPC will need mechanisms to hold departments accountable for fulfilling their readiness responsibilities and contributing to the business transformation. A new ADM-level governance committee will be created to ensure departmental involvement at the ADM level on the project's strategy, development and reporting processes. PSPC and TBS-OCHRO are currently analyzing the impact of funding constraints, identifying the gaps, and exploring potential solutions with partners.

From viability to feasibility and beyond

The journey from technical viability to the determination of feasibility for deployment across the GC has moved the yardstick forward and reduced risk significantly. The results of the feasibility project validated key components required for the business and digital transformation of HR and pay, including the testing of complex pay processes that were not previously evaluated. Results also confirmed assumptions and requirements for business readiness, departmental readiness, change management, and Data Modernization. Though there remain risks moving forward, each iterative step has reduced the overall risk to HR and pay transformation through continuous improvements to governance, leveraging lessons learned, increased collaboration and stakeholder engagement, and through a deeper understanding of interdependencies and of the compounding complexity between technical components.

HR and pay business and digital transformation is a long process, which is not planned to be completed until 2034-35. Activities are being advanced as part of an incremental approach enabling early and consistent engagement with key partners and stakeholders. Determining viability and feasibility were only two steps of many.

Chapter 4—Recommendation & the way forward

Recommendation

The objective of the HCM feasibility project was to build on the results from the NexGen HR and Pay Final Findings Report, validate the confidence level for implementing Dayforce, and inform the decision on whether or not to continue investing in business and digital transformation of HR and pay across the GC. The intent of the feasibility project was to advance system and GC readiness, and to have confidence that all identified issues have viable possible solutions that can be implemented before eventually going live with Dayforce. This objective has been achieved.

The completeness and quality of the results achieved during the feasibility project were sufficient to inform a decision to move forward with the completion of readiness preparations and testing. Furthermore, any outstanding elements of the feasibility project are in progress and on track to be completed in Spring 2025.

As part of the decision-making framework, the Project set two critical thresholds, or “dealbreakers”, that would need to be met as a minimum requirement for the final recommendation to be positive. Those two thresholds were met. No ‘showstoppers’ were identified and while some delays were encountered, they key project deliverables were sufficiently completed with adequate results by the end of the Project.

The work completed as part of the feasibility project and results outlined in this report indicate it is feasible for the GC to move forward with HR and pay business and digital transformation. It is therefore recommended that the GC continue investments over the next two years, 2025-26 and 2026-27 to complete the remaining work identified in earlier sections of this report, to finalize the development of the Dayforce solution and prepare the enterprise and a first wave of departments to onboard.

The feasibility project built on the results of the Final Findings Report and resolved a number of key gaps and issues identified during the viability assessment. The results confirm the direction of moving forward to prepare for HR and pay business and digital transformation. While the Project demonstrated that it is feasible to implement Dayforce, this should not be interpreted as readiness to implement now. While unknowns may remain, the GC now has a much better understanding of the work remaining and the mitigation strategies required to address expected residual risks for the next phases of work.

In any large-scale transformation, residual risk is not an anomaly but an expected component of change management. While mitigation efforts have significantly reduced inherent risk, the reality is that residual risks require constant oversight, adaptability, and proactive intervention. Given the scale and complexity of this transformation, it is important to acknowledge that risks of delays or additional costs remain high. However, taking a cautious and iterative approach to ensure success and stability at each stage before proceeding will help avoid larger errors that could jeopardize the delivery of federal public services. Committing to implement the new solution in a phased manner, only once the system is fully tested, when employee data has been cleansed, and using targeted change management strategies will de-risk the transformation initiative and help avoid key errors made during the Phoenix implementation.

The way forward

Over the next two years, the HR and Pay Transformation Project will finalize configuration and testing of Dayforce concurrent with other transformation readiness activities. The transformation team will also work with the vendor, central agencies, and stakeholders to achieve overall system, enterprise, and departmental readiness.

The scope of the HR and Pay Transformation Project focuses on finalizing the core functional elements of the Dayforce solution (HR, Pay, Benefits, Workforce Management, Talent, Cloud Extensions, Product Roadmap, Integrations, and Reporting), integrating the HR and Pay solution with key pre-pay, post-pay, and pension systems as well as working to strategically plan and establish readiness to deploy the Dayforce solution for the HR and Pay transformation.

The HR and Pay Transformation Project covers several categories of work (and more):

Departments will participate in a series of activities to collect and evaluate business requirements to identify any unique requirements that exist for each department that are not already satisfied by the planned Dayforce design and configuration. Departments and the Business Owner will have the opportunity to validate the configured solution prior to entering the deployment phase, which will include user acceptance testing. The intent is for these activities to lead to a readiness assessment and implementation decision by 31 March 2027.

Beginning in April 2025, additional project controls and reporting will be put in place to ensure adequate oversight over the investment, including monitoring of risks. There will be several check-ins during the next phase, including regular monthly status updates and formal biannual checkpoints with DMSG, which will constitute opportunities for 'pivots’ if required.

Conclusion

The feasibility project resulted in the validation of the key components required for business and digital transformation of HR and pay. The Project tested complex pay processes that were not previously evaluated, and confirmed assumptions and requirements for system readiness, enterprise readiness, departmental readiness, data modernization and change management.

The complexity of this endeavour should not be underestimated. Taking the time to engage with users, involve them in finalising the development and testing, and prepare them for the changes will be critical to avoiding mistakes of the past. This may entail accepting necessary delays to ensure that emerging requirements and all end-user needs are met prior to onboarding departments.

PSPC is committed to proceed with change only when the GC is ready in all respects. Accordingly, any future decision to “go live” and pay public servants through a new solution will be based on:

Based on the results of the work completed, PSPC has a better understanding of the work required for the GC to adopt Dayforce for HR and Pay while mitigating risks that could jeopardize success. Active participation and cooperation amongst the diverse organizations and business owners involved will be key to improving how HR and pay are delivered for the GC.

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