Management Summary and Recommendations: Shared Services Canada Resource Alignment Review

Acknowledgements

Treasury Board Secretariat commissioned Gartner Canada Co. to conduct a review of IT Transformation at Shared Services Canada. The Government of Canada regularly seeks the advice of industry experts to help inform direction and decisions. Results from this review form part of a broader set of recommendations from various reports and consultations that are informing the way forward for Government of Canada IT.

In accordance with both the Access to Information Act and Privacy Act, a limited amount of text within the report may not be disclosed.

The Management Summary and Recommendations are available below. For a copy of the full report, please contact TBS Public Inquiries: questions@tbs-sct.gc.ca.

Management Summary
1.0 Recommendations

Table of Figures

Figure 1. IT Model Hierarchy
Figure 2. Operating and Delivery Models
Figure 3. High-Level Recommendations Roadmap
Figure 4. IT Model Hierarchy
Figure 5. Run, Differentiate and Innovate Model
Figure 6. Fragmented Versus Centralised IT in the GC
Figure 7. Potential Future-State Governance Structure
Figure 8. High-Level Recommendations Roadmap

Management Summary

Background and Introduction

Treasury Board of Canada Secretariat commissioned this independent review to inform the Government’s way forward for delivery of modernised IT infrastructure services. The engagement kickoff was held 29 August 2016 and the final report submitted on 17 November 2016.

Shared Services Canada was created in August 2011, with Minister Ambrose stating: “Shared Services Canada will have a mandate to streamline IT, save money, and end waste and duplication.” After several security breaches, the Government added cybersecurity to the expectations of SSC.

The Independent Review describes how to organise large-scale IT infrastructure, and assesses SSC’s management of legacy IT and its plan for transformation/modernisation.

The scope of work includes the following:

Work Area 1: Assessment of Large-Scale IT infrastructure
Work Area 2: Legacy IT Infrastructure
Work Area 3: Enterprise Transformation of IT Infrastructure

The Independent Review undertaken by the Contractor and Expert Panel is based on research and analysis supported by the resources listed in Section 5 of the Statement of Work.

The Independent Review reflects best practices for enterprise IT implementation and management, domestically and abroad. To this end, we are providing:

Advice and recommendations for delivery of large-scale IT infrastructure;
An assessment and recommendations regarding SSC’s plans to maintain the Government of Canada’s legacy IT infrastructure, including essential upgrades; and
A review and recommendations regarding SSC’s IT Transformation Plan, implementation approaches and related risk, and SSC’s capacity to enhance its operational and business capabilities.

As requested in the RFP, Gartner created an Expert Panel to orient and validate our approach, work and deliverables throughout the Independent Review prior to its submission to the Project Authority for approval. This Panel, as described in Section 9 of the Statement of Work, consists of prominent executives with experience in leading and delivering large-scale IT transformation initiatives.

Our Panel consists of the following senior-level executives from Canada, the United States and Europe:

William (Bill) G. Oates:: Former chief information officer (CIO) of the State of Massachusetts, former CIO of the City of Boston and former CIO of Starwood Hotels and Resorts Worldwide, William is a senior executive with [This information has been severed]
Luc G. Portelance:: Former President and Executive Vice President of the Canada Border Services Agency (CBSA), former CIO at the Canadian Security Intelligence Service and retired 36-year Canadian Government employee, [This information has been severed]
Ron L. Hughes:: As a former Chief Deputy State CIO for the State of California and Director of the State’s data centres, [This information has been severed]
William (Paul) Wickens:: Paul is the current Chief Executive of the Northern Ireland Enterprise Shared Services Organisation. [This information has been severed]
Salvatore (Sal) Anthony Calta, Jr.:: [This information has been severed]

Work Area 1: Assessment of Large-Scale IT Infrastructure

Work Area 1 is based on Gartner Research. It describes IT organisation and delivery models for large organisations, providing case studies of the implementation of shared-service delivery models and their associated critical success factors. Finally, Work Area 1 provides a viability assessment of the models as they relate to the GC on a going-forward basis.

IT Organisation and Delivery Models:: The Gartner model below describes both operating and delivery models for IT organisations. Gartner believes the following to be true at the present time.

Figure 1. Text version below: — **Figure 1. IT Model Hierarchy**

The Government of Canada operates under a federated operating model. SSC is currently positioned at the asset-optimising delivery model; however, Partner and Government of Canada expectations are more aligned to the service-optimising/shared-service delivery model.

The Government of Canada can choose a centralised, federated, decentralised IT operating model and/or an asset, process, service or value optimising delivery model. As organisations move further right on the figure, a higher level of maturity is required. All these models are viable and can be successful if they are chosen and implemented in-line with the business expectations of the IT organisation. The figure below summarises these operating and delivery models, and also positions each of the case studies presented.

Figure 2. Operating and Delivery Models

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From a pure shared-service perspective, the only truly viable service delivery model is the service-optimising model. In this model, IT organisations formally articulate and charge for all their services, know their internal markets and customers, understand their core competencies and value propositions, source appropriately based on a competitive understanding of their strengths and weaknesses, and strategically manage their service and product offerings. They run the organisation like a business or an internal service company. Success stories support this.

The Expert Panel and Gartner believe the shared-service delivery model was the right approach to adopt when SSC was originally created, and remains the correct path today.

The Expert Panel and Gartner believe the set of services (network, email, procurement of workplace technology devices and data centre) SSC is focusing upon is at the core of those offered by shared-service organisations that we have observed worldwide. All have been shown to be implementable — although their relative ease and value to the organisation vary by service.

The Expert Panel and Gartner believe that aiming to provide 100% of the infrastructure services required by Partner organisations is impractical and unrealistic. Focusing on the core services that can be leveraged by the largest set of Partners is the approach to follow. Once services are established, all Partner organisations must use SSC as the sole provider of these services. Governance mechanisms must be in place to deal with potential deviations from this approach, ideally driven by the Partner organisations themselves.

Work Area 2: Delivery of Legacy IT Services

Work Area 2 is an assessment of the business processes that support and enable SSC in its role as an IT service provider for the Government of Canada. Specifically, it assesses SSC’s plans in the areas of financial management, service management, project management, people management, procurement management, partner engagement and governance.

Conclusions: [This information has been severed]

Relatively low levels of maturity in IT management disciplines, service and stability issues, and poor Partner satisfaction contribute to an overall lack of confidence in SSC’s ability to support the infrastructure.

History has shown a full transformation to retire the legacy environment and move to a future state has not been even remotely achievable in the last five years. It is realistic to assume that at least another five years could be required to retire a substantial portion of the legacy infrastructure.

History has also shown that the pace of change and improvement in SSC (and in the GC in general) is slow. Correcting these problems using traditional approaches would take years to complete. For example, implementing higher levels of IT service management maturity typically takes organisations 24 to 36 months.

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Work Area 3: SSC Transformation Plan

Work Area 3 is an assessment of SSC’s Enterprise IT Transformation Plan. It examines how SSC intends to implement the delivery of optimised IT infrastructure services to the Government of Canada, and includes an assessment of the business processes that support and enable SSC in its role as an IT service provider for the GC. It evaluates SSC’s plans in the areas of financial management, service management, project management, people management, procurement management, partner engagement, risk management and governance.

Conclusions: The Transformation Plan contains a set of projects and initiatives that are consistent and appropriate for an organisation targeting a shared-service implementation.

However, we feel the plan is overly ambitious for SSC, given its track record. The planning horizon is too long, with too many unknowns, and the completion of the full transformation is too far in the future.

The Expert Panel and Gartner feel the Transformation Plan represents an iterative or evolutionary view of the original transformation approach. A key perspective presented by the Expert Panel is that the world is now a much different place than it was in 2011. Approaches and strategies appropriate to that period may now be obsolete and no longer relevant. A primary example of this is cloud email — this was not a feasible approach to consolidate email in 2011, but is a mainstream approach in 2016 and one successfully adopted by multiple members of the Expert Panel.

SSC Transformation: The Scale of the Task

The Expert Panel and the Gartner team feel that the goal of a centralised shared-service delivery model for infrastructure is the correct approach for the GC to adopt. The set of targeted services is appropriate, and the mandated participation of Partner Organisations is valid. The motivation and objectives behind the creation of SSC in 2011 remain even more relevant today — we are unequivocal in this point of view.

However, the GC has vastly underestimated the size, scale and complexity of this effort. If successful, SSC would be the largest and most diverse whole-of-government IT infrastructure shared-service organisation in the world. While Gartner can identify a number of national governments that have been successful in these efforts (Ireland, Singapore, Finland, Oman and Israel), all are smaller than Canada. Successful provincial and state implementations can also be found (Ontario, British Columbia, Michigan, California and Massachusetts), but operating models are different, and the scale is still smaller.

Taken in this context, it is not surprising the GC and SSC have experienced difficulties — they are attempting the largest and most complex public-sector shared-service implementation ever considered. Complexity in this task is not technically based — but rather, based in organisational, policy, regulatory, financial, human resource and procurement constraints that the transformation must operate under. Given this type of complexity, the Expert Panel and Gartner believe a key missing component is leaders who have successfully executed this type of initiative before in a public-sector setting.

SSC Transformation: Extraordinary Measures Are Required

The issues, problems and risks that have been identified are substantially known to SSC and the GC. There are few (if any) new and startling findings, outside of the realisation of the scale of the challenge. Given this, very little progress has been made on dealing with these issues and advancing the SSC agenda. The problem is not determining what is wrong; rather, it is successfully executing a remediation plan.

The Expert Panel and Gartner feel the greatest risk to the GC lies in the state of the current legacy IT infrastructure — the service and stability issues indicate a degrading situation that is untenable. Taking traditional approaches and one year to solve this is not feasible.

Funding to fix these problems must be found immediately. The GC cannot wait for another budget cycle:

The typical procurement processes require too much time to execute. We cannot take one year to procure Partners, solutions or tools to solve these problems;
The best resources in industry must be engaged in finding and enacting solutions. We must look outside the GC for help;
Bold operational leadership from Treasury Board Secretariat (TBS) and SSC are needed to push past the boundaries that limit success;
Decision making cannot follow current approaches. Execution must be based on agile, effective decision making, with clear and singular accountabilities. This is the antithesis of governance today; and
Progress cannot be measured in years for this effort — positive results must be achieved in months.

These issues point to the need for extraordinary measures to be taken. Following the same approaches that have previously been taken will not yield results.

Governance Is the Most Critical Gap

The Expert Panel and Gartner believe the largest issue and gap to be addressed is related to the governance of IT across the GC. This is a foundational requirement — without this, long-term success for SSC will be a continual struggle.

Decision making and prioritisation are core challenges — and central to the governance issue is the ability to set direction and prioritise across the GC, while balancing the needs and requirements of individual Departments.

SSC, as a centralised infrastructure provider, has control and authority over this domain, and 43 Partner organisations each have control and authority over decentralised IT functions, such as application development.
Migration from legacy to the new SSC future state requires much more than building new data centres. Application systems must migrate to the new environment in order to retire legacy. This is something SSC has no control over — moreover, there is little incentive to Partner organisations to invest in this effort when program priorities take precedence.
In general, there will always be priorities that advance the IT agenda of the GC as a whole, such as establishing an IT infrastructure foundation for digital government. These will not always coincide with Departmental program priorities. In lieu of a clear, accountable decision maker, SSC is forced to make difficult GC-wide decisions that often conflict with the interests of Partners.

There is no central role, authority or accountability to manage prioritisation and operational direction across the GC. When attempted, this effort must be accomplished through persuasion or influence.

A Cross-GC Role for IT Is Required

Gartner believes that IT is critical to program delivery, service to Canadians and a digital future, and believes that high-level leadership (i.e., at the Deputy Minister level) for GC IT must be established. This role would have overall authority and accountability for IT and the IT profession for the GC. Gartner has named this role the “DM of IT.” We believe this role should be a transient one — put in place for the 18- to 24-month period required to execute the key recommendations the Expert Panel and Gartner are proposing.

The DM of IT must have some degree of influence over Departmental CIOs. One approach proven to be successful is in the Province of Ontario, where each Departmental CIO has a dotted-line reporting relationship to the Provincial CIO.

The DM of IT would have two mandates:

In the short term (18 to 24 months), overseeing, implementing and being accountable for the recommendations of this report related to SSC. To do this, the DM of IT would be supported by a Task Force comprising Departmental representatives, the CIO of Canada and outside industry experts.
In the longer term, develop overall authority and accountability for IT and the IT profession for the GC. The role would serve as a basis for central planning and investment, provide greater oversight and guidance on major GC-wide transformation projects (such as Phoenix), and provide integrated leadership of the CIO community.

The DM of IT Implements a Set of Key Recommendations

The analysis presented in the assessment of the legacy IT infrastructure and enterprise transformation of IT offers detailed recommendations related to each of the analysis domains (financial management, partner management, etc.). These are at a detailed domain level, and should be considered in the context of making specific improvements to areas of business capability.

The Expert Panel and Gartner do not feel that these recommendations are sufficient in themselves to move the GC and SSC forward toward the goal of dealing with current service issues and operational risks, and achieving a vision of a true shared-service organisation for the GC. We have therefore identified five macro-level recommendations that the GC must consider to achieve its short- and long-term goals. These five recommendations would be the responsibility of the DM of IT to oversee and implement:

Establish Partner governance for SSC and the SSC Transition Task Force
Stabilise service delivery
Develop an SSC “relief valve” strategy for the transition period
Baseline the current state
Reconstruct a future SSC and refine the transformation plan

Below is the high-level roadmap for the recommendations, and more detailed comments on each recommendation.

Figure 3. High-Level Recommendations Roadmap

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1. Establish Partner Governance for SSC and the SSC Transition Task Force

The DM of IT would lead governance for SSC and the SSC Transition Task Force — a multidisciplinary group charged with implementing the recommendations. The Task Force itself would provide advice and insight to the leader, and would consist of:

CIO and Deputy Minister representatives from selected GC Departments;
Industry experts; and
Subject matter experts and representatives having expertise and experience in successful shared-service implementations.

This Task Force would establish one of Gartner’s foundational requirements for successful shared services — governance of the shared-service organisation by the service consumers. For this reason, it is necessary for this role to be filled outside of SSC.

The Expert Panel and Gartner believe this Task Force should be transient in nature — that it exist [This information has been severed] with a mandate to:

Oversee the stabilisation of service delivery efforts;
Oversee the baselining effort to inform the reconstruction of SSC;
Oversee the effort to reconstruct/redefine a future SSC; and
Provide Partner-based direction, advice and input to SSC for those transformation projects currently in progress.

2. Stabilise Service Delivery

The Expert Panel and the Gartner team believe the top priority for SSC and the GC is to deal with the current service and stability issues with the legacy IT infrastructure, and to move it to a supportable state for the next three to five years (or whatever a revised Transformation Plan would target). The DM of IT and the SSC Transition Task Force would have overall authority and accountability for the successful execution of this initiative. Gartner believes the following high-level steps would be required for this mandate.

Funding would be provided to the task force to support specific stabilisation initiatives. The DM of IT would have ultimate authority for the usage of these funds.

The President of SSC and a group of selected CIOs would establish the major stabilisation challenges currently facing the GC. A top-ranked set of priorities would be identified and approved by the SSC Transition Task Force — each to be addressed by SWAT teams assigned to the specific problem area. These SWAT teams would be comprised of:

Key SSC personnel responsible for the domain;
Outside industry experts in the domain under consideration (eMail, networks, etc.). These may represent vendor organisations, system integrators and other consultants. It will be critical to enlist the best and brightest to drive these projects; and
Selected Departmental subject matter experts in the domain.

The Expert Panel and Gartner suggest these teams be led by outside experts when possible — they will be able to provide fresh perspectives, as well as take new approaches to the problems that SSC and the GC have not been able to solve.

These initiatives must be focused on short-term fixes, but must also ensure changes are sustainable for the projected life of the legacy IT infrastructure — this could be anywhere from three to five years, or even longer.

Each SWAT team would develop a set of key performance indicators (KPIs) to measure the ability to meet the specific stabilisation objectives of each initiative. These would be assessed and reported on periodically to the SSC Transition Task Force.

Lastly, time is of the essence for these initiatives. They must be targeted for improvements in months — not years. The stabilisation program should work itself out of existence [This information has been severed]

3. Develop an SSC Relief Valve Strategy for the Transition Period

The business of government will continue throughout the transition period, and Departments will have infrastructure needs as new systems are built and deployed. In situations where conflicting priorities (e.g., stabilisation initiatives, SSC capacity, etc.) prevent SSC from meeting these needs, a “relief valve” strategy must be in place to allow Departments to proceed. This would require two components — development of the relief valve strategy, and then putting in place the capability.

This strategy would be developed by the SSC Transition Task Force and would have a number of components:

Guidelines to dictate when relief valve options can and should be applied. There are two types of situations the strategy must address:
- Situations where SSC cannot immediately meet the need, or meet the need in a timely enough manner to accommodate Department timelines; and
- Situations where the infrastructure need is not congruent with the SSC service strategy. In keeping with the 80/20 rule, service needs that cannot be scaled, or cannot be leveraged, should be considered for service delivery outside of SSC.
Architectural standards that guide the manner in which the solution will be deployed. This will accommodate repatriation of the solution to SSC at some future date.
The relief valve options themselves, which could include:
- The use of sanctioned cloud-based vendors;
- The use of managed service providers; and
- The use of vendor-supplied services/infrastructure.

Once this has been formalised, the SSC Transition Task Force would provide the mechanism and governance to apply the strategy during the transition period.

The enablement of this capability would require rapidly developing supply arrangements with selected vendors of infrastructure services. These would encompass all the relief valve options described above, but the Expert Panel and Gartner believe that cloud infrastructure service providers should be the highest priority.

The Expert Panel and Gartner believe the need for this capability will extend well beyond the transition period. The brokering of these types of services should be a core component of the long-term SSC service delivery strategy.

4. Baseline the Current State

A comprehensive baseline for SSC does not exist. When SSC was first created, IT asset information, service-level metrics, a complete HR skills inventory and an analysis of complete IT costs (including evergreening) were all of mixed quality. A complete view of the legacy IT environment still does not exist today. The Expert Panel, the Gartner team and case studies all point to this gap as a major impediment to SSC progress against its transformation agenda.

The baseline effort would determine the following elements of the current state:

A full inventory of the IT asset base;
The costs related to the asset base, and the cost of services;
The current service levels being achieved;
Pricing of services provided by external Partners; and
Optionally, but very likely required, an assessment of IT management process maturity.

The baseline exercise will provide SSC and the SSC Transition Task Force with a number of critical data points that will support the development of a future direction for SSC:

The required funding to support the legacy IT infrastructure. This will feed into downstream work in developing a chargeback mechanism and process;
A snapshot of the total costs to provide services to the GC. This can be used to benchmark how well SSC performs against peer shared service organisations by service lines; and
If conducted, the IT management process maturity assessment can be used to prioritise and execute improvement programs in selected areas such as IT asset management, service management, vendor management, etc.

The baseline should be conducted by an external organisation specialising in this type of analysis, and with the requisite tools and approaches to gather data in this type of environment.

5. Reconstruct a Future SSC and Refine the Transformation Plan

The establishment of the SSC Transition Task Force sets in place one of the key foundational elements required for a successful shared service organisation, namely, governance of the shared services by the consumer. This last recommendation addresses the remaining conditions for success that the Expert Panel and the Gartner team have identified. These include:

Determining the correct organisational structure for SSC to enable the implementation of commercial best practices;
Addressing constraints that limit SSC’s flexibility with processes such as procurement, financial management, HR management and others;
Considering structures such as an agency, crown corporation, strategic partnership, joint venture or outsourcing as potential models for SSC. Alternatively, special privileges could be granted to exempt SSC from traditional Departmental constraints;
Establishing a chargeback/showback model and service levels. Gartner has identified three conditions that must be in place for a service-optimised/shared-service organisation to succeed:
- Governance of the shared-service provider is by the customer;
- The shared service is paid for by customers, typically through a chargeback arrangement; and
- Service levels are set through the governance process — in effect, shared-service governors acting as customers decide which services to provide themselves with through the shared service organisation.

The DM of IT and the team must re-examine sourcing and delivery approaches. The Expert Panel and Gartner believe the IT ecosystem has evolved significantly since SSC was created in 2011. Valid decisions and strategies made at that time may no longer be relevant today. For example, the use of a cloud-based email solution was not viable in 2011. Today, this is a mainstream approach to deal with email consolidation — one adopted by some members of the Expert Panel for their jurisdictions.

There is universal agreement from the Expert Panel that the progression of cloud and its continuing trajectory make this approach a vital component of a going-forward strategy for SSC. Case studies and Expert Panel experience show that shared-service organisations are increasingly becoming the brokers of services, rather than the ultimate providers of services. In some organisations, this has translated to a cloud-first strategy — seeking a cloud-based solution as the first option for the delivery of specific infrastructure services.

The Expert Panel and Gartner believe SSC and the GC must be more aggressive in the pursuit of alternate sourcing options. This is the direction industry is taking, and an approach that may be able to drive increased velocity in SSC’s transformation.

Finally, the DM of IT must work with SSC to refocus the Transformation Plan to achieve the reimagined SSC. This will encompass the macro-level recommendations — for example, the development of a new SSC operating model, the development of a chargeback/showback model, etc. In addition, some of the in-flight projects in the Transformation Plan will be well-aligned to the goals of the future state — elements such as the continued consolidation of networks and the focus on a service-first strategy are extremely relevant.

The Plan must also address a permanent Partner-led governance framework and body to replace the SSC Transition Task Force.

The Expert Panel and Gartner recommend the refocused plan follow these guidelines:

Shorten the time frame for the plan to a rolling three-year window. Plan for annual updates for two years, and a major plan refresh in the third year;
Be very results-focused, and identify key benefit measures for each project. Ideally, these should be business-focused measures;
Focus on projects that deliver value in the planning time frame. For long-term projects, break these down into components to ensure that measurable and sustainable benefits can be reaped as each major component of the project is delivered; and
Drive the transformation project portfolio based on input and priorities identified by the SSC Transition Task Force. The transformation must be driven by Partner Organisation priorities.

90-Day Plan

First Month: Appoint Deputy Minister of IT

Appoint a Deputy Minister to lead the SSC Transition Task Force, reporting through the Secretary of the Treasury Board or through a transition structure within the Privy Council Office. This person will be charged with recruiting and constructing the Transition Task Force, as well as leading this group through the recommended initiatives during a period running through the first two years of IT restructuring.

Months 2 and 3: Build SSC Transition Task Force Team

The SSC Transition Task Force should have expert-level knowledge in three domains:

Knowledge of the Government of Canada — the operations of the GC and how to deliver projects and programs successfully;
Information Technology — knowledge and experience in the implementation of key infrastructure technologies being supported by SSC, e.g., email, data centre, etc. The Expert Panel and Gartner believe the majority of these experts should be recruited from private industry; and
Shared Services — knowledge and past experience implementing successful shared-service organisations in both the public and private sectors. The Expert Panel and Gartner believe these experts should be recruited from outside the GC.

This Task Force should include:

The CIO of Canada;
A PCO representative;
Deputy Ministers from selected Departments;
CIOs from selected Departments; and
Industry experts — this potentially includes CIOs from private industry, experts from vendor organisations, experts from consulting organisations, experts from academia and leaders of other shared-service initiatives, particularly in the public sector.

Month 2: Develop Stabilisation Priorities

The SSC President will lead a team (including a subset of the SSC Transition Task Force) to work with selected CIO representatives from across the GC to determine the major stabilisation issues that are impacting the GC today. These will be ranked in tranches of five to 10 — with each group being addressed by tiger/SWAT teams that include a mix of private-sector experts, SSC employees and broader GC domain experts (e.g., application experts from Departments). After each round, the next group will be selected and addressed with the process, continuing until the infrastructure has been stabilised.

It will be vital to not spend an excessive amount of time ensuring the right five to 10 priorities get selected — mistakes will be made, but progress must be made quickly. Throwaway investments may need to be made, but the objective will be to stabilise the infrastructure and have it maintainable until the longer-term transformation can be completed.

The goal is to have the first set of priorities ready for approval by the appointed Deputy Minister of IT on or before the end of the second month.

Months 2 and 3: Begin Development and Delivery of the SSC Relief Valve Strategy

The SSC relief valve strategy will establish:

A strategy to allow Departments to continue to deploy new systems and solutions during the transition period, when demand cannot be accommodated by SSC; and
The capabilities to meet this demand.

This strategy would consist of guidelines to dictate when relieve valve options can be considered, any standards associated with these options and the options themselves — such as cloud infrastructure service providers. The capabilities would consist of the supply arrangements that would allow Departments to rapidly acquire and implement these services.

The DM of IT should begin development of this strategy as one of his/her first priorities, with the target of having this ready on or before the end of the third month after the start of operations for the SSC Transition Task Force. As strategy development is progressing, the DM of IT should also work with TBS to fast-track the development of cloud capabilities for the GC. The Expert Panel and Gartner believe this should be given the highest priority — before examining managed service providers or other vendor-supplied infrastructure service providers.

Once SSC Transition Task Force Reaches Critical Mass: Oversee Current SSC Transformation Plan

The SSC Transformation Plan should be put on temporary hold until the SSC Transition Task Force reaches a critical mass. At this point, the task force can review the in-flight/planned transformation initiatives, and determine which should proceed and which should be put on hold. Some potential targets for continuation include the projects related to network consolidation efforts, as well as improvements in service management maturity.

After 90 Days

Month 4 Onward

The SSC Transition Task Force goes into full operations and begins to oversee, advise and execute the recommendations provided in this report. Their mandate exists for 18 to 24 months, the time required to:

Approve, oversee and complete the stabilisation initiatives, including the ongoing prioritisation of new initiatives;
Provide ongoing review of new GC initiatives that require SSC services to determine their prioritisation and/or to approve alternative delivery methods, such as cloud;
Complete the baseline/benchmark exercise to fully understand the current state;
Determine the ideal organisational structure for SSC moving forward (crown corporation, agency, joint venture, etc.);
Design the future-state SSC that addresses key areas, such as a permanent governance model and framework, a chargeback model, service levels, and a cloud strategy/capability;
Develop a revised Transformation Plan that moves SSC to this desired future state; and
Provide guidance, direction and oversight into ongoing SSC transformation initiatives in-flight during the transitional governance period to the end of the second year.

1.0 Recommendations

1.1 IT Operating and Service Delivery Model

Gartner IT Operating and Delivery Models

The analysis of Work Area 1 presented the Gartner concepts regarding IT operating models, as well as service delivery models. The figure depicting these models is reproduced below. Note that in the context of the GC, three observations can be made:

There may be a range of business expectations from Departments based on the relative maturity of their IT adoption. For example, some may see IT as a utility, while others may see if as a way to transform programs; and
An asset-based delivery model is well-suited to support a utility-oriented expectation for IT, but likely ill-suited for those Departments that wish to use IT to transform their programs. A service-optimising/shared-service model is capable of meeting a much broader or even complete range of business expectations.
A decentralised operating model, providing shared services enterprisewide is very rarely found (for example, a single operating department providing network services to the entire enterprise). The decentralised model does not effectively support the goals of cost reduction, risk reduction, and standardisation. Nor does it allow an enterprise to bring all operating units / departments of the organization to a common level of maturity and agility.

Figure 4. Text version below: — **Figure 4. IT Model Hierarchy**

Gartner presented three hypotheses that relate to the current state for SSC. These are:

Hypothesis 1: The Government of Canada elected to pursue a federated operating model (applications in Departments/agencies and infrastructure at SSC) and, with its objectives of standardisation and cost efficiency, oriented SSC toward an asset-optimising delivery model.
Hypothesis 2: SSC is following a shared-asset delivery model (consolidate data centre, email and network assets), but Partner organisations expect a shared-service delivery model (service optimising).
Hypothesis 3: All delivery models can be successful and viable; however, each requires different organisation and delivery architectures. The case studies where shared services in governments have been successful have consistently indicated critical success factors, aligned to Gartner Research, that we do not believe are currently present in SSC and the Partner organisations.

These hypotheses were confirmed by Gartner in the Work Area 2 (Legacy IT Infrastructure Assessment) analysis. Most notably:

Our analysis of the legacy IT infrastructure has confirmed that the current SSC IT delivery model is an immature asset-optimisation model. However, only some progress has been made against this asset-optimisation agenda — for example, in the area of networks. Other services, such as email consolidation, data centre consolidation and application hosting, have only seen limited progress toward consolidation of assets.
Interviews with Departmental stakeholders identified service quality, predictability and operational risk as key issues at present. These are typically focused on outcomes seen in a process-optimised model (a level of maturity beyond asset consolidation). Long-term direction in the GC IT strategy points to enablement of digital government services, where a service-optimised/shared-service model is required (which requires another step in maturity beyond process optimisation).
The analysis of both the legacy IT infrastructure and the enterprise transformation of the IT infrastructure plan points to gaps in critical success factors required to be successful in any of the delivery models — those most notably required to be a service-optimised/shared-service organisation:
- Governance of the shared services provider is by the customer;
- The shared service is paid for by customers, typically through a chargeback arrangement; and
- Service levels are set through the governance process — in effect, shared-service governors acting as customers decide what services, at what level of quality, and at what cost, with which to provide themselves through the shared-service organisation.

Conclusions

Gartner and the Expert Panel believe the shared-service delivery model was the right approach to adopt when SSC was originally created, and remains the correct path today:

It will allow the GC to bring all Departments to a common level of IT maturity. It will eliminate the issue of “have not” and “have” Departments;
It will provide the GC with a viable approach to deal with the risks of an aging IT infrastructure. The concerns with aging IT present in 2011 are still in place today. A shared-service model is a practical and pragmatic approach to dealing with these risks across government;
It is the most effective approach to allow the GC to meet its digital-government agenda. A common IT infrastructure, architected to meet the demands of digital government, can be implemented once and then leveraged across all Departments;
It will allow the GC to manage IT infrastructure challenges most effectively — to address security and cybersecurity needs, manage growth and scalability, and ensure availability and responsiveness for all Departments from a single managed infrastructure; and
At maturity, provide all this to the GC in the most cost-effective manner possible.

SSC Scope of Services

Gartner’s Run, Differentiate and Innovate model is depicted in this figure. Within each tier, example services form a mix of IT and business services. This model is used as a basis for analyzing services that organisations can consider for centralising (for example, into a shared-service organisation), or potentially outsourcing.

The lowest layer is Run — this includes all those all services categorised by some as “business as usual,” “keep the lights on” IT spending or sustain investments. Run services typically do not directly achieve new or enhanced goals of the enterprise by themselves.

The Differentiate or Grow layer focuses on developing and enhancing IT systems in support of business growth or, in the case of the public sector, program delivery. Discretionary investments are more likely to be included in this layer.

The Innovate or Transform layer focuses on implementing technology systems that enable the enterprise to enact new business models. This is a “venture” category represented by activities such as using a mobile device to transmit real-time citizenship data to a border crossing official to perform pre-emptive tasks related to identity verification.

Figure 5. Text version below: — **Figure 5. Run, Differentiate and Innovate Model**

The SSC Transformation Plan program structure focuses on email transformation, data centre consolidation, telecommunications transformation, procurement of workplace technology devices, cyber- and IT security, and service management — clearly aligning to the Run layer of the Gartner model and representative of the focus that most shared-service organisations undertake.

Gartner believes attempting to implement all these services simultaneously has been challenging for SSC. Feedback and experiences from the Gartner Expert Panel suggest the following priorities based on the ease of implementation and the potential value received:

Networks
Email
WTDs
Data Centre

Conclusions

Gartner and the Expert Panel believe the set of services SSC is focusing on is in the sweet spot of those offered by shared-service organisations that we have observed worldwide. All have been shown to be implementable — although their relative ease and value to the organisation vary by service.

Gartner and the Expert Panel believe that although these are the right services to offer, some fine-tuning of priorities, as well as examining alternative delivery approaches (e.g., cloud email services) could allow SSC to deliver them more quickly to the GC.

SSC Scope of Workload

SSC provides services to 43 Partner organisations, which are required to utilise SSC as a service provider for the core services of network, email and data centres. These core Partner organisations, and an additional number of Departments and agencies (totaling approximately 100) now must use SSC for the procurement of workplace technology devices.

Two common questions that arise in a shared-service environment are:

What should the size of the total footprint of infrastructure services be that the shared-service organisation provides?
How much leeway should be provided to Client/Partner organisations in determining whether to use those services offered?

Gartner, the Expert Panel and case studies agree that a 100% target for all infrastructure services is both unrealistic and impractical. Infrastructure that is most broadly shared and most commonly required should drive the service strategy. Case studies such as [This information has been severed] point to the value of an 80% target as a measure of success. Services that have requirements too stringent to allow these to be provided with requisite levels of security, availability or other requirements should be a low priority in the service catalogue (e.g., Top-Secret networks), Additionally, services that exist in Departments that are “one off” and neither scalable nor able to be leveraged, should remain within departments (e.g., the Global Affairs Canada international network).

The Expert Panel and Gartner are adamant on the principle that once services are established, all Partner organisations must consume these services, as opposed to seeking alternate delivery channels. The only exception to this principle is when a required service is not provided, and would be too costly for SSC to implement, or where the service could not be leveraged across a critical mass of Partner organisations.

Conclusions

Gartner and the Expert Panel believe that aiming to provide 100% of the infrastructure services required by Partner organisations is impractical and unrealistic; focusing on the core services that can be leveraged by the largest set of Partners is the approach to follow.

Once services are established, all Partner organisations must use SSC as the sole provider of these services. Governance mechanisms must be in place to deal with potential deviations from this approach, ideally driven by the Partner organisations themselves.

Assessment of Critical Success Factors

The analysis of Work Area 1 presented case studies and critical success factors for shared-service organisations. The table below summarises these, as well as Gartner’s assessment as to the presence or absence of these today.

Critical Success Factor	Comments
Clear Motive	Partial. The original motivation for the creation of shared services centred on an asset consolidation model. Today’s expectations are more geared toward a true shared-service organisation. The lack of alignment between what is being delivered and what is desired indicates clear motive is only partially met.
Strong Leader	Missing. This requires an individual with necessary authority who is behind the shared-service initiative to ensure it actually happens. There is no individual with the required authority in place today to do this.
Program Management Competence	Partial. Creating, implementing and maintaining shared services is a massive undertaking involving many disciplines of formal program management. Gartner believes competence in this area is at basic or low levels of maturity.
Operational Governance	Partial. These are the decision makers, typically at the senior management level of government, who will guide the shared-service organisation in resource allocation issues. Their remit includes both demand and supply governance. This has been missing for most of SSC’s history. Recent initiatives to put in place a DM-level committee to deal with these issues are too new to assess at this point.
Clear Scope	In Place. This is a clear statement as to what is being moved to a shared-service arrangement and why it is included in the scope. Gartner believes this is well-understood for the majority of services being provided today.
Communication Strategy	In Place. There is a plan and a means to communicate to all affected agencies and personnel about the shared-service initiative and its progress. Gartner believes this is substantially in place today.
Leadership Engagement	Partial. Government leaders, especially including political leaders and even the “strong leader” described above, need to understand the complexities and likely resistance to shared services before commanding that it go forward. However, ensuring success does not stop at the command. It requires ongoing engagement to ensure that disparate and often resistant decision makers lower in the organisation are doing what is needed and expected of them. Engagement includes ongoing progress reports to, and real-time decision making by, the heads of agencies affected by shared services. This also includes the willingness of senior political leaders, usually the head of the government, to take action against uncooperative agency heads. While part of this requirement is met, many aspects are still missing — especially the lack of Partner-led governance.
Modernisation Funding	Missing. This is funding for the new host organisation to invest in the necessary facilities, equipment and software to support its customers. This has been missing since SSC’s creation — with the expectation that savings would drive this. Explicit funding for modernisation has never been provided.
Chargeback Model	Missing. Shared-service organisations should not receive their funding from the appropriations process; rather, they should receive it from their customers, and they need a model to bill customers for services. That model should be accurate, fair and as simple as possible to administer. This is missing today.

Conclusions

In reviewing the nine critical success factors the Expert Panel identified as most critical, only two are fully in place — the remaining seven are either missing or only partially met.

1.2 Legacy IT Infrastructure Management

The table below summarises the findings from the Work Area 2 analysis of the Legacy IT Infrastructure. Recommendations to address these findings can be found in the relevant analysis sections.

Subject Area	Conclusions
Financial Management: The Contractor must assess the funding required to maintain GC’s Legacy IT infrastructure until legacy systems are transformed.	[This information has been severed] [This information has been severed] but as this is incremental funding only for two years, financial pressure will return in full in FY18–19, given that Gartner does not believe full transformation can be achieved in a two-year period. [This information has been severed] [This information has been severed]
Service Management: The Contractor must advise if the business and operational metrics proposed by SSC are measurable, aligned with industry best practices, allow for early identification of risks, and will provide relevant, meaningful measures of results clearly linked to the objective. At a minimum, it must include determining how the existing performance management framework can be improved.	Many of the required underpinnings for appropriate business and operational metrics do not exist today. This includes elements such as standard service management processes, and a baseline enumeration of service characteristics (such as quantities of service). Without these, it is impossible to reliably calculate many of the metrics used by industry best-practice organisations. The few functioning metrics that exist (e.g., incidents, user satisfaction, service requests and projects underway) are just basic metrics, more than anything systematically linked to the strategic goals and objectives of SSC.
Project Management: The Contractor must evaluate if SSC has a sufficient life cycle management plan and capacity for Legacy IT assets, and associated maintenance and investment plans.	SSC lacks a complete baseline of legacy assets — this makes management of the assets almost impossible. This hampers the ability of SSC to plan for transformation, given it is not clear exactly what is to be transformed and where the highest-value targets are. Notwithstanding the lack of a baseline, a standard IT asset management process and framework does not exist across the SSC service lines. No formal life cycle management framework is in place across the organisation; this is managed by each service line at differing levels of maturity. The relative maturity of IT asset management practices at SSC is relatively low compared to industry.
People Management: The Contractor must evaluate SSC’s people strategy to support the legacy systems until transformation has been implemented.	The lack of baseline HR data when SSC was created, along with a well-articulated definition of required skill sets aligned to Client service expectations, has made it impossible to develop a meaningful strategy to support legacy systems outside of basic measures such as head count. There is evidence to suggest that SSC did not receive all of the resources that were necessary for success from Departments at the time of SSC formation.
Procurement Management: The Contractor must assess SSC’s capacity for supply management across all organisations.	An SSC-wide sourcing strategy is not in place. A sourcing strategy methodology is in place but is inconsistently applied. The need for an SSC-wide vendor management process is recognised but is nascent. Policy requirements and limitations hinder SSC’s ability to be responsive and agile in procurement activities.
Partner Management: The Contractor must evaluate whether SSC has the internal capacity and knowledge of Partners’ business to ensure that Partners’ requirements can be met. The Contractor must also provide recommendations on SSC’s prioritisation of investments in legacy systems across the GC.	Partner engagement has roles for business relationship managers (account managers) and service delivery managers, and there are people assigned to every Partner and Client account. Additionally, the ADMs and DM of SSC meet with Partner ADMs and DMs at a peer level. There is a monthly scorecard that represents the metrics that are available: projects underway, Client satisfaction scores and incidents. Gartner’s Prioritisation Information Ecosystem model scores SSC based on the presence of 12 key attributes in three areas: projects, tactical and strategic. SSC’s score shows some foundational elements are present; however, it suggests little effectiveness. This translates to poor-to-middling results in prioritisation efforts.
Governance: The Contractor must assess the governance in place regarding the delivery of Legacy IT to the GC, including the roles and responsibilities of SSC, Partners, Clients and central agencies.	A proliferation of governance structures are in place today, which is an indicator of the absence of true decision makers. It is not clear which governance bodies or individuals are accountable to make which decisions, and how those decisions are tracked through to closure. From a Government of Canada perspective, it is not clear where ultimate decision authority for shared services resides. Public- and private-sector success stories for shared services show clear support from the top of the organisation, along with a clearly identified individual who has authority. External personnel, such as those in academia or with industry experience, are not sought out to be part of the SSC governance structures. This limits SSC from a source of valuable insights — especially from those who have experienced success in shared-service transformations.

The results of the assessment can be summarised as follows:

Financial Management

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Service Management.

Many of the required underpinnings to support robust and meaningful service metrics are missing. Only very basic measures are in place today. SSC is not aligned to industry best practices at present.

Project Management.

SSC is at a low level of maturity for IT asset management practices. Processes are fragmented and ad hoc. Management of the IT asset life cycle is done in an ad hoc manner and relies on knowledge of individuals rather than a well-defined framework and associated processes.

People Management.

Issues with people management originate from the initial creation of SSC. The lack of a complete baseline, as well as a well-defined HR target state to support legacy infrastructure, has hindered SSC’s ability to develop anything other than a very basic strategy to support the legacy IT environment.

Procurement Management.

Sourcing and vendor management capabilities are at a basic or nascent stage. Procurement is hindered by policies and regulations associated with a typical GC Department — this hinders SSC’s ability to be agile and effective.

Partner Management.

A well-defined structure is in place to manage the relationship between SSC and its Partners. Prioritisation maturity is low at this point, with the efficacy of a new DM-level prioritisation committee too early to assess. Some interviewees voiced concerns that even though these structures are in place, resolution of issues does not occur here and must be escalated for action. These foundational structures are overshadowed by service and stability issues, which strain the relationship between SSC and some Partners.

Governance.

There is an abundance of governance committees and bodies, but overall accountability for decision making appears ill-defined.

Risk.

Although this was not a formal assessment area for this work stream, Gartner believes service and stability issues are engendering an increasing operational risk to program delivery.

Conclusions

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1.3 Enterprise Transformation of IT Infrastructure

The table below summarises the findings from the Work Area 2 analysis of the legacy IT infrastructure. Recommendations to address these findings can be found in the relevant analysis sections.

Subject Area	Conclusions
Financial Management: The Contractor must evaluate if the transformation programs and their associated projects in SSC’s enterprise IT transformation plans are appropriately resourced.	Financial pressures and funding constraints limit SSC’s ability to fund and progress on all projects within the Transformation Plan. Current projects show further pressure in future years, where a significant bubble of additional funding will be required to advance the Plan. One of the few ways SSC can deal with in-year funding shortfalls is to defer projects such as those in the Transformation Plan. This has been a historical pattern, and one that will repeat unless significant changes are made to how the Transformation Plan is funded.
Service Management: The Contractor must advise if SSC’s enterprise IT transformation plans include a comprehensive identification of factors measuring SSC’s successful delivery of its mandate commitments. The Contractor must also assess if the business and operational metrics proposed by SSC are measurable, aligned with industry best practices, allow for early identification of risks, and will provide relevant, meaningful measures of results clearly linked to the objective.	The shortcomings in service management for the legacy IT infrastructure do not provide SSC with any type of base upon which it can leverage for the Transformation Plan. The Plan itself only has KPIs in a few areas, and is lacking a comprehensive framework to measure success. The overall approach does not align to industry best practices, and will likely not allow for the early identification of risks, nor provide meaningful measures of results.
Project Management: The Contractor must evaluate if the target state described in SSC’s enterprise IT transformation plans will meet GC business requirements; whether the implementation approach, including scope and timelines, is appropriate and achievable; and if SSC has identified the planned benefits from implementing its enterprise IT transformation plans and has a realistic approach to realise those benefits. The Contractor must also evaluate if SSC has a sufficient life cycle management plan and its associated maintenance and investment plans.	Broadly speaking, the projects identified in the Transformation Plan are well-aligned to the initiatives typically seen in a shared-service implementation. If fully achieved, the target state represents a fully operational environment for the core services identified by SSC. However, there are [This information has been severed] projects in the Plan, with a period of nine years to complete. With only [This information has been severed] projects in-flight, Gartner feels that accurate estimates of the scope, timelines and resources required to complete the plan are not possible to make. There is not a sufficient base of information at this time to make a determination of plan achievability. Benefits for the in-flight projects are, for the most part, only rudimentary. They are not business-focused and do not articulate a set of benefits that resonate with value to the GC. Ongoing evergreening costs are accounted for in most of the projects in the Transformation Plan, and thought has been put into life cycle management.
People Management: The Contractor must assess SSC’s change management plan and strategies for ensuring its staff have the competencies, skills and training required to achieve the outcomes of SSC’s Transformation Plans.	No change management plan or strategy appears to be in place in the Transformation Plan. The Transformation Plan does have a comprehensive people strategy component. Coupled with its draft HR Plan, these documents propose a broad set of initiatives to drive improvements in SSC’s workforce. However, Gartner believes the sheer size of the Plan, and the number of initiatives that will need to be undertaken, will strain the organisation — the Plan itself may not be doable in the time frames identified. Based on SSC-supplied statistics, the organisation will be facing a significant shortfall of resources in future years — estimates place this at approximately [This information has been severed] during the next three years. This is a huge shortfall, and one Gartner believes will be difficult, if not impossible, to fill. SSC must also comply with GC policies and regulations with respect to HR practices. This constrains its ability to recruit, hire and retain scarce IT resources.
Procurement Management: The Contractor must assess SSC’s capacity for supply management across all organisations. The Contractor must also review and provide an opinion on SSC’s vendor management with private-sector product and service providers, including recommendations to maximise the use of performance-based contracts.	SSC does not have a transformation-specific sourcing strategy distinct from its legacy IT infrastructure. Limitations and constraints, such as the need to make Treasury Board submissions, have a negative impact on its ability to service Clients with any degree of agility. SSC does not have a transformation-specific procurement strategy distinct from its legacy IT infrastructure — the same limitations in that area apply here. SSC does not have a transformation-specific vendor management strategy distinct from its legacy IT infrastructure. This is a relatively new capability for SSC and is still under development. SSC’s overall procurement management capabilities are at a low maturity.
Partner Management: The Contractor must assess SSC’s engagement with Partner organisations and evaluate SSC’s internal capacity and Partners’ capacity to ensure that needs and requirements can be appropriately scoped, costed and managed. At a minimum, it must include but is not limited to determining if SSC has the proper balance among enterprise transformation activities and Partner projects including knowledge of Partners’ business to ensure that Partners’ requirements can be met. The Contractor must also assess indicators of success in meeting Partners’ needs and assess how they are tracked. At a minimum, it must include but is not limited to determining how the existing performance management framework can be improved, including change management.	Partner engagement has roles for business relationship managers (account managers) and service delivery managers, and there are people assigned to every Partner and Client account. There is some evidence of Partner project performance being tracked and reported on in the monthly scorecards (new business requests, key active project status and critical risks). Planning cycles are not synchronised and present challenges to how SSC can incorporate Partner input. The annual budgetary planning from the Partners only emerges after SSC has made a budget submission. A very new process sponsored by the ADM CEPP has developed a framework that looks at IT projects’ attractiveness and achievability, to develop prioritisation. It is still too early to assess its effectiveness. Gartner found no evidence to suggest the use of change management metrics to support leaders in the making of accurate or more rapid decisions.
Governance The Contractor must assess the governance in place regarding the delivery of enterprise IT to the GC, including the roles and responsibilities of SSC, Partners, Clients and central agencies.	Gartner has observed a number of changes being made to governance recently, which would suggest the specific requirements of the Transformation Plan are being taken into consideration. These are too new to assess whether they will adequately support the transformation. Existing governance appears to be problematic, with a proliferation of governance bodies and unclear definitions of ultimate accountability. At least one of the Partner organisation CIOs commented, “Current governance does not work; Deputy Ministers are being asked to prioritise detailed items because lower levels are not willing to make the decisions.” Another Partner organisation CIO expressed concern over losing track of governance because it is constantly changing and evolving.
Risk The Contractor must recommend if the risk analysis and risk mitigation strategies are sufficient and provide a set of recommendations on how SSC processes are effective in determining the readiness of Partner Departments to jointly execute SSC’s enterprise IT transformation plans and service strategy.	SSC’s risk assessment is focused on internal-to-SSC risks only. The practice of risk management within SSC is not yet mature, and Partners may remain largely unaware of SSC’s assessment of risks, the planned mitigation strategies, or their roles and responsibilities in support of the execution of the SSC Transformation Plan and service management strategy. Risk mitigation plans are insufficient to ensure the readiness of Partner Departments to jointly execute SSC’s Enterprise IT Transformation Plan and service management strategy.

The results of the assessment can be summarised as follows:

Financial Management: [This information has been severed]
Service Management.: Measures of success for the Transformation Plan are basic or missing. The ones articulated in the Plan will not provide relevant, meaningful measures of results, nor will they align to the business objectives of Partners.
Project Management.: The transformation is large and complex, with a significant number of projects to be delivered during a nine-year period. The planning horizon is much too long, with the risk of projects/initiatives being no longer relevant in nine years. The Plan is not well-defined enough, with only [This information has been severed] projects underway, to accurately judge whether the Plan is achievable and realistic.
People Management.: The Transformation Plan does have a comprehensive people strategy component and, when coupled with SSC’s draft HR Plan, documents a broad set of initiatives to drive HR improvements. However, the Plans are very ambitious and the challenges that SSC is facing are significant. Gartner is doubtful that this HR strategy can be executed in three years.
Procurement Management.: There is no distinct procurement strategy for the Transformation Plan. The same limitations of low/basic process maturity apply equally to the legacy IT infrastructure and the enterprise IT.
Partner Management.: A well-defined structure is in place to manage the relationship between SSC and its Partners. Prioritisation maturity is low at this point, with the efficacy of a new DM-level prioritisation committee too early to assess. As with legacy IT infrastructure, these structures are overshadowed by service and stability issues that strain the relationship between SSC and some Partners. Confidence by Partners in the ability of SSC to execute on the Transformation Plan is low.
Governance.: Governance for the Transformation Plan appears to be evolving at a rapid place. There is little to suggest that foundational issues related to clear accountability for decision domains are being addressed.
Risk.: As has been observed with most SSC IT management processes, risk management appears to be at a low level of maturity. The focus of risk assessments and risk mitigation strategies appears to be SSC-centric, with little consideration for Partner organisation readiness or risks.

Conclusions

Gartner and the Expert Panel believe the Transformation Plan is appropriate from the standpoint of the projects being proposed. However, based on SSC’s track record and the breadth of the Plan, Gartner and the Expert Panel have little confidence the Plan can be executed successfully. The Plan itself presents a planning horizon that is much too long; it should be more immediately focused.

The Expert Panel and Gartner are unanimous in recommending that the Transformation Plan place greater emphasis on a cloud-first strategy. Coupled with greater flexibility in procurement and governance, this could be an avenue to drive greater velocity in the transformation and serve as a relief valve for Partner demand.

1.4 Strategic Direction and Recommendations

The Current Situation

The Expert Panel and the Gartner team feel the results of the Work Area 2 and Work Area 3 analysis can be best summarised as follows.

Legacy IT Infrastructure

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History has shown a full transformation to retire the legacy environment and move to a future state has not even been remotely achievable in the last five years. It is realistic to assume that at least another five years could be required to retire a substantial portion of the legacy infrastructure.
History has also shown that the pace of change and improvement in SSC (and in the GC in general) is slow. Correcting these problems using traditional approaches would take years to complete. For example, implementing higher levels of IT service management maturity typically takes organisations 24 to 36 months to achieve.
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Enterprise Transformation of IT

The Transformation Plan contains a set of projects and initiatives that are consistent and appropriate for an organisation targeting a shared-service implementation.
However, we feel the plan is ambitious for SSC, given its track record. The planning horizon is too long, with too many unknowns, and the completion of the full transformation is too far in the future.
The Expert Panel and Gartner feel the Transformation Plan represents an iterative or evolutionary view of the original transformation approach. A key perspective presented by the Expert Panel is that the world is now a much different place than it was in 2011. Approaches and strategies appropriate to that period may now be obsolete and no longer relevant. A primary example of this is cloud email; this was not a feasible approach to consolidate email in 2011, but is a mainstream approach in 2016 and one successfully adopted by multiple members of the Expert Panel.
While elements of the Transformation Plan will eventually deal with service issues and a service-first approach, the timeline for improvement is too far off. The Plan does not directly address the critical situation of the legacy IT infrastructure today and the need to urgently reduce operational risk to the GC.
Similarly, foundational elements of a shared-service organisation are not directly addressed in the Transformation Plan — namely, a chargeback model and governance by Partners. Without these in place, long-term success is not possible.
Taken as a whole, Gartner and the Expert Panel have little confidence that the Plan will deal with the long-term issues of SSC, nor will it address the critical service and stability issues facing the GC today in a timely enough manner. We also lack confidence in the ability of SSC and the GC to successfully execute the Plan.

The Scale of the Task

The Expert Panel and the Gartner team feel that the goal of a centralised shared-service delivery model for infrastructure is the correct approach for the GC to adopt. The set of targeted services is appropriate, and the mandated participation of Partner organisations is valid. The motivation and objectives behind the creation of SSC in 2011 remain even more relevant today — we are unequivocal in this point of view.

Gartner estimates that the size and complexity of this task is similar to the scale of combining the infrastructure of 30 to 40 Tier 1 Canadian banks.

Taken in this context, it is not surprising the GC and SSC have experienced difficulties. They are attempting the largest and most complex public-sector shared-service implementation ever considered. Complexity in this task is not technically based — but rather in organisational, policy, regulatory, financial, human resource and procurement constraints under which the transformation must operate. Given this type of complexity, the Expert Panel and Gartner believe a key missing ingredient is leadership resources who have successfully executed this type of initiative before in a public-sector setting.

Extraordinary Measures Are Required

The issues, problems and risks that have been identified are substantially known to SSC and the GC. There are few (if any) new and startling findings outside of the realisation of the scale of the challenge. Given this, very little progress has been made on dealing with these and advancing the SSC agenda. The problem is not determining what is wrong; rather, it is executing a remediation plan successfully.

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The typical procurement process to find external resources to execute a plan will not work; we have seen SSC procurement activities that take more than one year to execute, without success;
The ability to get the best resources in industry engaged in finding and putting in place a solution is critical; traditional approaches to getting these resources are too slow and restrictive;
Bold operational leadership from TBS and SSC to push past the boundaries that limit success;
Decision making cannot follow current approaches. Execution must be based on agile, effective decision making, with clear and singular accountabilities. This is the antithesis of governance today; and
Progress cannot be measured in years for this effort; positive results must be achieved in months.

The GC must decide whether it wants to fix these issues and, if so, must also recognise that extraordinary measures need to be taken to do so. Following the same approaches that have previously been taken will not work.

Foundational Principles

The Expert Panel and Gartner have identified foundational principles that guided the development of the recommendations made to address both the short-term and long-term challenges facing the GC and SSC:

The GC is committed to shared services as a model to achieve its large-scale IT infrastructure objectives, and it acknowledges it must be very clear in its articulation of the policy objectives that SSC exists to achieve. These could be derisking the infrastructure, providing a platform for digital government, etc. The objectives should be validated by the appropriate policy decision makers and then broadly shared across Government. There should be no ambiguity about SSC’s targeted goals.
The corollary to this is that the GC also recognises that foundational elements for shared-service success must be put in place if progress is to be made;
The GC recognises that special measures are necessary to execute on the mandate for SSC, and these measures will enable a move to more commercial best practices in areas such as procurement, human and financial resource management, etc.; and
The GC will leverage commercial capabilities, strategic partnerships and risk-reward contracting mechanisms to engage capable and experienced private-sector partners to achieve its objectives and augment skills and capabilities lacking in the GC.

Major Gaps Arising From the Assessment

The results of the analysis in the different work streams have identified a number of gaps to Gartner-defined best practice, relevant case studies and Expert Panel member experience from successful shared-service implementations in both the public and private sector. These limit SSC’s ability to be successful and meet the expectations of Partner Organisations.

Gaps have been placed into categories for the purpose of developing targeted recommendations:

Governance: Gaps related to the decision-making processes, roles and authorities
Organisation: Gaps related to the manner in which SSC is structured and organised
Funding: Gaps related to the funding and the associated costs and recovery of SSC services
Planning: Gaps related to the planning process, and the SSC Transformation Plan

These gaps will continue to limit SSC’s ability to match the pace of change required by Partner organisations to meet their ever-expanding demand for IT infrastructure.

Governance Gaps

The following gaps relate to decision-making processes, roles and authorities:

Absence of a cross-GC point of view: A cross-GC point of view takes into consideration the needs of the GC as a whole, rather than individual Departments. Associated with this is determining which priorities should have greater consideration and weight, and are better aligned to the GC business agenda.
Lack of Partner-led governance for shared services: Partner organisations must have ultimate authority in the definition of services, service levels and pricing of services to be in a true shared-service environment.
Lack of clear and focused decision authorities: A set of clear decision authorities and accountabilities for the key decision domains required for SSC and the GC as a whole is missing. An example is prioritisation of initiatives.
Poor integration between Departments and SSC: Applications remain with Departments, and the infrastructure with SSC. However, applications may need to be modernised in order to move into the new SSC target environments. SSC lacks the full control required to retire legacy infrastructure.

Organisation Gaps

The following gaps relate to the manner in which SSC is structured and organised:

Lack of flexibility in key areas

A number of organisational limitations make it more challenging, if not impossible, for SSC to achieve the outcomes Partners and the GC expect:

Given the global competition for top-tier IT talent, GC Departmental HR policies and approaches hamper the ability of SSC to quickly bring in the top talent that is required to solve the challenging issues SSC faces. SSC must be able to be flexible, agile and competitive in the manner in which it acquires and nurtures this talent.
GC Departmental procurement approaches restrict the ability of SSC to very quickly bring in top-tier, strategic Partner firms from industry to help solve complex and evolving challenges. For example, SSC has spent more than one year on procurement of a service management tool, an initiative which has not yet been completed.
GC Departmental financial management processes challenge SSC to make the required, multiyear, long-term investments required to achieve a desired future state.

Transformation complexity requires a different approach

A transformation this large and complex requires that the best practices and talent, with first-hand experience be applied — these factors are missing today. If successful, SSC will be the largest and most diverse whole-of-government IT infrastructure shared-service organisation in the world. This level of complexity requires that industry knowledge and experience from outside the GC be brought to bear.

Funding Gaps

The following gaps relate to the funding and the associated costs and recovery of SSC services:

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SSC services are not paid for by Partners: Finally, Gartner believes that a foundational element for shared services is the payment for the services by customers (at Partner-defined service levels), typically through a chargeback arrangement. This has only very limited implementation in place today in the GC, which presents a constant challenge in the management of supply and demand for SSC services.

Planning Gaps

The following gaps relate to the planning process, and the SSC Transformation Plan:

Service and stability issues must be the top priority for the GC: The current Transformation Plan does not deal with this explicitly, and the projects/initiatives that would improve service delivery would take too long to deliver. If not addressed, this gap would perpetuate an existing and increasingly unacceptable risk to GC program delivery.
Nine-year transformation timeline: The Expert Panel and Gartner believe this time frame is much too long. Targeting an IT future state nine years away is not practical. The lack of a short-term focused plan is a gap that needs to be addressed.
Evolutionary transformation, rather than revolutionary: The Transformation Plan takes an evolutionary approach to planning — evolving from the original SSC vision. The world in 2016 is much different from how it was in 2011, and the Expert Panel and Gartner believe developments such as cloud services should be given much more prominence in SSC’s future.
The management of demand for SSC services is a major issue for Partners today: The Expert Panel and Gartner foresee this becoming an even greater challenge in the near future, as SSC focuses on stabilising the current environment and refocusing its transformation. A set of “relief valve” options must be put in place to allow Partners to proceed on initiatives in situations where SSC capacity is not available. This “relief valve” strategy is a gap.

Requirements Arising From the Gaps

Each of the identified gaps has requirements that must be met in order to close or eliminate the gap. The table below summarizes these requirements.

Gap Category	Requirements
Governance	G1. Put in place a Partner-led governance body to implement decision authorities for service definition, service levels and service pricing by service consumers — a foundational element for a successful shared-service organisation. G2. Implement a clear and focused decision authority and associated accountabilities for SSC decision domains. This should clearly identify who has final authority over decision domains such as prioritisation. This could be an individual in the Partner-led governance body, or a subset of representatives from that body. G3. Establish an individual/authority to represent the interests of the GC as a whole from an IT planning perspective. Leverage this role to reconcile individual Departmental priorities against GC priorities. G4. Implement a governance mechanism to reconcile and manage the services which are centralised (i.e., infrastructure) vs. those which are federated (e.g., application support). This is vital for SSC to be able to complete its transformation.
Organisation	O1. Examine other potential operating models for SSC, such as a Crown Corporation, to provide it with greater flexibility and control in financial management, procurement management and human resource management processes. Select an optimal approach and implement this as part of the Transformation. O2. Develop a task force/advisory panel consisting of industry experts and individuals with direct experience in shared-service transformations to work with SSC and GC in their transformation effort.
Funding	F1. Put in place a chargeback mechanism to allow the recovery or showback of service costs to service consumers. F2. Put in place a process/mechanism to establish service levels, as well as tiered costing associated with multiple levels of service. This process must be driven by service consumers. F3. [This information has been severed] Conduct a comprehensive baseline exercise to determine the current state of the IT asset base, the service levels being delivered, and the costs/pricing for IT services, IT skills and IT management process maturity. [This information has been severed] F4. Conduct a benchmark exercise to determine the relative efficiency of SSC service delivery when compared to peer organisations delivering similar services.
Planning	P1. Put in place a task force to address the service and stability issues in the legacy infrastructure. This task force must comprise GC and outside industry experts, and focus on immediate and short-term results. P2. Refocus the Transformation Plan to address a much shorter planning horizon. The Expert Panel and Gartner suggest a rolling three-year period, with the Plan being refreshed annually. P3. Refocus the Transformation Plan to take into consideration the current trends and direction in the marketplace, such as cloud services. Support this effort through the advice and input of outside industry experts. P4. Put into place a strategy and set of options to allow Partners to meet their most critical priorities in situations where SSC cannot meet demand. The strategy should set out the conditions under which this will be considered, and the options and mechanisms to deliver services, such as cloud or outside-managed service providers.

Governance Is the Most Critical Gap

The Expert Panel and Gartner believe that the largest issues and gaps that must be addressed are related to governance of IT across the GC. This is a foundational requirement; without this, long-term success for SSC will be a continual struggle.

Decision making and prioritisation are core challenges, and central to the governance issue is the ability to set direction and prioritise across the GC while balancing the needs and requirements of individual Departments:

SSC as a centralised infrastructure provider has control and authority over this domain, and 43 Partner organisations each have control and authority over decentralised IT functions such as application development.
Migration from legacy to the new SSC future state requires much more than building new data centres. Application systems must migrate to the new environment in order to retire legacy. This is something SSC has no control over; moreover, there is little incentive to Partner organisations to invest in this effort when program priorities take precedence.
In general, there will always be priorities that advance the IT agenda of the GC as a whole, such as establishing an IT infrastructure foundation for digital government. These will not always coincide with Departmental program priorities. In lieu of a clear accountable decision maker, SSC is forced to make difficult GC-wide decisions that often conflict with the interests of Partners.

The figure below depicts the fragmented/decentralised versus centralised model in place today for IT in the GC. As can be seen, there is no role, authority or accountability to manage prioritisation and operational direction across the GC. When attempted, this must be accomplished through persuasion or influence.

Figure 6. Text version below: — **Figure 6. Fragmented Versus Centralised IT in the GC**

A Cross-GC Role for IT Is Required

Gartner believes that IT is critical to program delivery, service to Canadians and a digital future, and believes high-level leadership (i.e., at the Deputy Minister level) for GC IT must be established. This role would have overall authority and accountability for IT and the IT profession for the GC. Gartner has given this role the name of DM of IT. We believe the role should be a transient one, put in place for the 18- to 24-month period required to execute the key recommendations the Expert Panel and Gartner are proposing.

The DM of IT must have some degree of influence over Departmental CIOs. One approach proven to be successful is at the Province of Ontario, where each Departmental CIO has a dotted-line reporting relationship to the Provincial CIO.

The DM of IT would have two mandates:

In the short term (18–24 months), overseeing, implementing and being accountable for the recommendations of this report related to SSC. To do this, the DM of IT would be supported by a Task Force comprising Departmental representatives, the CIO of Canada and outside industry experts.
In the longer term, develop overall authority and accountability for IT and the IT profession for the GC. The role would serve as a basis for central planning and investment, provide greater oversight and guidance on major GC-wide transformation projects (such as Phoenix), and provide integrated leadership of the CIO community.

There are multiple approaches that can be taken to put this governance structure in place. The figure below depicts one model that could potentially be used.

Figure 7. Text version below: — **Figure 7. Potential Future-State Governance Structure**

The DM of IT

Reporting to a Minister, is responsible for the effective management of the GC’s IT assets, including coordination of Departments and their IT plans, establishing priorities, providing direction, identifying/confirming precise funding requirements and ensuring execution. The role will have the authority to make the difficult and sometimes unpopular decisions that represent the interests of the GC as a whole. Specific responsibilities include:

Accountable for stabilisation of IT across applications (CIOs) and infrastructure (SSC);
Accountable for modernisation of IT across applications (CIOs) and infrastructure (SSC);
Accountable for achieving “lights on” cost reduction in IT across applications (CIOs) and infrastructure (SSC);
Responsible for managing the tactical transition and crafting the future organisation and management system for SSC;
Accountable for obtaining funding and prioritisation for all the stabilisation, modernisation and cost reduction work across all IT (applications and infrastructure);
Responsible for developing a GC-wide enterprise architecture that governs new IT initiatives. Has authority to ensure the architecture is adopted; and
Responsible for integrating all of the above into a single GC rolling two-year IT Plan and Priorities.

The CIO of Canada

Maintains his/her current policy role during the transition period and supports the DM of IT as a member of the Transition Task Force.

Deputy Ministers

Work in close consultation with the new DM of IT to:

Develop IT strategies that support Departmental/agency business priorities;
Ensure the Department’s IT assets are managed effectively toward the achievement of business objectives and based on the standards established by the DM of IT;
Via their Minister, secure funding for the delivery of the Departmental IT program; and
Via their CIOs and as a result of close collaboration with the DM of IT, DMs should ensure that their Departmental IT program is aligned with the overall priorities of the GC, that advice to Ministers is based on that alignment, and that delivery of their program is conducted within agreed-upon parameters with SSC and other Government Departments.

Selected Deputy Ministers may also participate on the Transition Task Force.

Departmental CIOs

Support their DM in delivering on his/her business objectives. They work in close collaboration with the DM of IT and his/her staff to develop and implement strategies that are aligned to the GC’s IT priorities. Selected Departmental CIOs may also participate on the Transition Task Force.

The President of SSC

Continues to be the accountable DM to run SSC as a service provider to the GC, with Partner governance and prioritisation led by the DM of IT.

The Transition Task Force

Is chaired by DM of IT and staffed with industry experts, the CIO of Canada and a small but powerful group of DMs and CIOs. They are accountable for executing the recommendations of this report.

This task force will also set in place governance of shared services by Partners — and because of this, SSC will not have representation in the Task Force.

The DM of IT Implements a Set of Key Recommendations

The analysis presented in the Assessment of the Legacy IT Infrastructure and the Enterprise Transformation of IT offer detailed recommendations related to each of the analysis domains (financial management, partner management, etc.), These are at a detailed domain level, and should be considered in the context of making specific improvements to areas of business capability such as financial management.

The Expert Panel and Gartner do not feel these recommendations are sufficient by themselves to move the GC and SSC forward toward the goal of dealing with current service issues and operational risks, and achieving a vision of a true shared-service organisation for the GC. We have therefore identified five macro-level recommendations that the GC must consider to achieve its short- and long-term goals. These five recommendations would be the responsibility of the DM of IT to oversee and implement:

Establish Partner governance for SSC: A foundational requirement for shared-service organisations, and a critical success factor, is governance by the consumers of the services being provided. This requires that Departmental representatives, along with representation of a stakeholder with the IT interests of the GC as a whole, drive the decision making with respect to the SSC agenda.
Stabilise service delivery: Remedy the service and stability issues that GC is experiencing today and remove the risk of a significant failure of the legacy environment from the equation. Evolve the legacy environment into one that can be sustained with adequate levels of service for the three- to five-year time frame until it can be retired.
Develop an SSC relief valve strategy for the transition period: The business of Government will continue during the transition period, and Departments must have the ability to deploy new systems and applications. In cases where SSC cannot meet demand, a “relief valve” strategy will determine sanctioned alternative approaches to address these types of situations.
Baseline the current state: Determine the true state of the current environment from an asset, cost, service-level, service price, management process and skill perspective. Fully understanding the starting point is critical to planning and implementing a successful future.
Reconstruct a future SSC and refine the Transformation Plan: Examine alternate organisational models for SSC that could provide it with greater flexibility in financial management, procurement and human resources management, aligned to commercial best practices. Put in place the required foundational elements to make SSC successful, such as chargeback and service levels. Refine the Transformation Plan to address current trends and developments in the industry, and focus on a shorter time horizon to deliver results.

These recommendations address the gaps previously identified, starting on page 170. Each recommendation and the associated gap requirement it addresses is summarized in the table below.

Recommendation	Comments	Requirements Addressed
Establish Partner Governance for SSC and the SSC Transition Task Force	The DM of IT would have responsibility for building the Transition Task Force, and would lead this body. The DM and the Task Force would have responsibility to address the specific governance requirements previously outlined.	G1, G2, G3, G4 O2
Stabilise Service Delivery	The Task Force, SSC and other GC representatives strike SWAT teams to address key stability and service issues.	P1
Develop an SSC Relief Valve Strategy	Development of the strategy and then the options to exercise the strategy.	P4
Baseline the Current State	Comprehensive baseline followed by a benchmark exercise.	F3, F4
Reconstruct a Future SSC and Refine the Transformation Plan	Combine a number of SSC future-state initiatives into this one project — this includes the optimal organisational structure for SSC, chargeback, service levels and a new Transformation Plan.	O1 F1, F2 P2, P3

The Expert Panel and Gartner also recommend that all these initiatives be supported through a multidisciplinary Task Force led by the DM of IT. It would consist of the CIO of Canada, Departmental representatives and experts from industry. We have termed this the “SSC Transition Task Force,” which is described in the next section.

Establish Partner Governance for SSC and the SSC Transition Task Force

The DM of IT would lead governance for SSC, as well as lead and oversee the implementation of the recommendations developed in this review. The DM of IT would be supported by the SSC Transition Task Force. This Task Force would provide advice and insight to the leader, and would consist of:

CIO and Deputy Minister representatives from selected GC Departments;
Industry experts; and
Subject matter experts and representatives having expertise and experience in successful shared-service implementations.

The Expert Panel and Gartner believe this Task Force should be transient in nature — that it exist for 18 to 24 months and then be either disbanded or transitioned into a permanent governance structure for SSC. The mandate of the Task Force will include the following:

Overseeing the stabilisation of service delivery efforts;
Overseeing the baselining effort to inform the reconstruction of SSC;
Overseeing the effort to reconstruct/redefine a future SSC; and
Providing Partner-based direction, advice and input to SSC for those transformation projects currently in progress.

This last mandate is to ensure that existing transformation projects that are well-aligned to the high-level future direction of SSC can continue and not lose momentum. The consolidation of networks and plans to improve service management capability are good examples of projects that should continue to be executed. Existing and new Partner-led initiatives must continue to be supported, and this Task Force can be used as a mechanism to prioritise and monitor these efforts.

The SSC Transition Task Force can be likened to a board of directors for a corporation — they provide oversight, insight and foresight into the operations and direction of the corporation. They will fulfill their mandate to SSC by providing the following:

A single voice that represents the interests of all Partner organisations as they evolve, which can provide direction and advice to SSC in the services it offers, the service levels that must be achieved, the costs for services and how these will be funded/recovered;
Oversight into initiatives related to the key recommendations. They will determine the priorities to address, establish teams to enact the initiatives and provide oversight into these to ensure their objectives are achieved; and
Advice and input into current and ongoing transformation initiatives.

The SSC Transition Task Force will not have a role in the day-to-day operations of SSC. Its focus will be on key initiatives required to stabilise the environment, and to set a forward direction for SSC.

Stabilise Service Delivery

The DM of IT and the SSC Transition Task Force would have overall authority and accountability for the successful execution of this initiative. Gartner believes the following high-level steps would be required for this mandate:

Funding would be provided to the Task Force to support specific stabilisation initiatives. The DM of IT would have ultimate authority for the use of these funds.
The President of SSC and a group of selected CIOs would establish the major stabilisation challenges currently facing the GC. A top-ranked set of priorities would be identified and approved by the SSC Transition Task Force, each to be addressed by SWAT teams assigned to the specific problem area.
These SWAT teams would comprise:
- Key SSC personnel responsible for the domain;
- Outside industry experts in the domain under consideration (email, networks, etc.). These may represent vendor organisations, system integrators and other consultants. It will be critical to enlist the best and brightest to drive these projects; and
- Selected Departmental subject matter experts in the domain.
The Expert Panel and Gartner suggest that, when possible, these teams be led by outside experts, who will be able to provide fresh perspectives, as well as take new approaches to problems on which SSC and the GC have not been able to make progress.
These initiatives must be focused on short-term fixes, but must also ensure changes are sustainable for the projected life of the legacy IT infrastructure. This could be anywhere from three to five years, or longer.
Each SWAT team would develop a set of KPIs to measure the ability to meet the specific stabilisation objectives of each initiative. These would be assessed and reported on periodically to the SSC Transition Task Force.
Lastly, time is of the essence for these initiatives, and they must be targeted for improvements in months — not years. The stabilisation program should work itself out of existence by the 18- to 24-month time frame.

Develop an SSC Relief Valve Strategy

The business of Government will continue throughout the transition period, and Departments will have infrastructure needs as new systems are built and deployed. In situations where conflicting priorities (e.g., stabilisation initiatives, SSC capacity, etc.) prevent SSC from meeting these needs, a relief valve strategy must be in place to allow Departments to proceed.

This would require two components: developing the relief valve strategy, and then putting the capability in place.

This strategy would be developed by the SSC Transition Task Force and would have a number of components:

Guidelines to dictate when relief valve options can and should be applied. There are two types of situations the strategy must address:
- Situations where SSC cannot immediately meet the need, or meet the need in a timely enough manner to accommodate Department timelines; and
- Situations where the infrastructure need is not congruent with the SSC service strategy. In keeping with the 80/20 rule, service needs that cannot be scaled, or cannot be leveraged, should be considered for service delivery outside of SSC.
Architectural standards that guide the manner in which the solution will be deployed. This will accommodate repatriation of the solution to SSC at some future date.
The relief valve options themselves, which could include:
- The use of sanctioned cloud-based vendors;
- The use of managed service providers; and
- The use of vendor-supplied services/infrastructure.

Once the strategy has been formalised, the SSC Transition Task Force would provide the mechanism and governance to apply the strategy during the transition period.

The enablement of this capability would require the rapid development of supply arrangements with selected vendors of infrastructure services. These would encompass all the relief valve options described above, but the Expert Panel and Gartner believe cloud infrastructure service providers should be the highest priority.

Baseline the Current State

A comprehensive baseline for SSC does not exist. When SSC was first created, IT asset information, service level metrics, a complete HR skills inventory and an analysis of complete IT costs (including evergreening) were all of mixed quality. [This information has been severed]

The baseline effort would determine the following elements of the current state:

A full inventory of the IT asset base;
The costs related to the asset base, and the cost of services;
The current service levels being achieved;
Pricing of services provided by external Partners; and
Optionally, an assessment of IT management process maturity.

The baseline exercise will provide SSC and the SSC Transition Task Force with a number of critical data points that will support the development of a future direction for SSC:

The required funding to support the legacy IT infrastructure. This will feed into downstream work in developing a chargeback mechanism and process;
A snapshot of the total costs to provide services to the GC. This can be used to benchmark how well SSC performs against peer shared-service organisations by service lines; and
If conducted, the IT management process maturity assessment can be used to prioritise and execute improvement programs in selected areas such as IT asset management, service management, vendor management, etc.

The baseline should be conducted by an external organisation specialising in this type of analysis, and with the requisite tools and approaches to gather data in this type of environment.

Reconstruct a Future SSC and Refine the Transformation Plan

The establishment of the SSC Transition Task Force sets in place one of the key foundational elements required for a successful shared-service organisation: namely, governance of the shared services by the consumer. This last recommendation addresses the remaining conditions for success that the Expert Panel and the Gartner team have identified. These include:

Determining the correct organisational structure for SSC to enable the implementation of commercial best practices;
Establishing a chargeback/showback model and service levels;
Re-examining sourcing approaches; and
Refocusing the Transformation Plan to achieve the reimagined SSC.

The Correct Organisational Structure for SSC

The analysis of Work Areas 2 and 3 identified major limitations and constraints under which SSC must work — these, in turn, limit SSC’s ability to deliver services effectively. They arise because SSC has been structured like any other GC Department, and must follow the same policies and regulations established for them.

Procurement is a primary example; the need to follow standard GC procurement practices severely limits the agility in which SSC can operate. Procurements for foundational elements such as a service management tool must follow a process which, in this case, has taken more than one year and has still not delivered a product.

SSC is also impacted by TBS requirements for Treasury Board submissions for major acquisitions. These are very lengthy and costly, and negatively impact SSC’s ability to service Clients. Treasury Board submissions are required based on dollar value, and not risk and complexity. SSC is working with TBS to move the requirement to create these submissions based on risk and complexity versus cost. For example, a routine mainframe upgrade could require a Treasury Board submission, whereas acquiring a Government service management solution may not.

GC Human Resources practices present an impediment to SSC’s ability to recruit, develop and retain key IT resources required for success. GC policies relating to job classifications and official language requirements, along with the lack of attractiveness of the GC as an employer of choice, severely impact SSC’s ability to attract the best and brightest in the industry. These are precisely the types of resources SSC will require if it is to be successful in the most complex implementation of a shared-service organisation ever considered.

Dealing with these constraints may require the GC to consider other organisational structures to deliver the services mandated to SSC, structures such as an agency, crown corporation, strategic partnership, joint venture or outsourcing. Alternatively, special privileges could be granted to exempt SSC from traditional Departmental constraints. Regardless of the structure, The Expert Panel and Gartner believe that the current model is not appropriate for SSC. SSC is a true horizontal organisation that crosses all Departments and agencies. It must have the flexibility and control within financial management, procurement and HR practices to operate as a true shared-service provider. Without this, the ability to provide the right services, at requisite levels of service quality, at competitive cost and with the agility expected for digital government, will be always compromised.

Establishing a Chargeback/Showback Model and Service Levels

Gartner has identified three conditions that must be in place for a service-optimised/shared-service organisation to succeed:

Governance of the shared-service provider is by the customer;
The shared service is paid for by customers, typically through a chargeback arrangement; and
Service levels are set through the governance process; in effect, shared-service governors acting as customers decide what services to provide themselves with, through the shared-service organisation.

The establishment of the SSC Transition Task Force will set in place the first condition, and this recommendation will establish the remaining two.

The baselining of the current state will provide SSC with a true picture of the total costs required to deliver services. Peer benchmarking will establish the ranges observed in industry for these services at varying levels of quality. This information can be used to drive the development of a chargeback/showback model to inform, and potentially recover the costs of services from, Partners. This can be a phased model, focused initially on an inform-only model, where costs are communicated to Partners, but not recovered. The model can then evolve to a partial/full-recovery model based on the long-term funding approach for SSC.

The use of a chargeback model will provide SSC with a key tool to manage demand. In a full cost recovery model, demand for services is tempered by available funding. This is much different from the unlimited consumption model currently in place for some services.

A full baseline of service levels was not performed when SSC was created; rather, a commitment was made to provide service at a level of quality equal to what Partners were experiencing prior to transition to SSC. These were never documented or established, and until recently, only basic service measures have been used.

The establishment of a full set of service levels, set through the SSC Transition Task Force, will place the onus on Partners to set expectations for service quality. This will be a complementary activity to the chargeback model, allowing tiers of service quality to be reflected in the pricing of services. This will allow Partner organisations to meet more stringent requirements around service, balanced by the cost of services incurred.

Re-examine Sourcing Approaches

The Expert Panel and Gartner believe that the world is now a much different place than it was when SSC was created in 2011. Valid decisions and strategies made at that time may no longer be relevant today. For example, the use of a cloud-based email solution was not viable in 2011. Today, this is a mainstream approach to deal with email consolidation, one adopted by some members of the Expert Panel for their jurisdictions.

There is universal agreement from the Expert Panel that the progression of cloud and its continuing trajectory make this approach a vital component of a going-forward strategy for SSC. Case studies and Expert Panel experience show that shared-service organisations are increasingly the brokers of services, rather than the ultimate provider of services. In some organisations, this has translated to a cloud-first strategy — seeking a cloud-based solution as the first option for the delivery of specific infrastructure services.

Shared-service organisations that become brokers of services must focus on a significantly different set of capabilities than traditional service provider organisations. Competencies related to running infrastructure evolve to sourcing, vendor management, vendor performance management and procurement management. Designing this type of organisation is much different from that of an infrastructure operator.

The Expert Panel and Gartner believe that SSC and the GC must be more aggressive in the pursuit of alternate sourcing options. This is the direction industry is taking, and an approach that may be able to drive increased velocity in SSC’s transformation.

Refocus the Transformation Plan

The final element of the reimagining of the SSC future state is to refocus the Transformation Plan to encompass the macro-level recommendations — for example, the development of a new SSC operating mode, the development of a chargeback/showback model, etc.

In addition, some of the in-flight projects in the Transformation Plan will be well-aligned to the goals of the future state; elements such as the continued consolidation of networks and the focus on a service-first strategy are extremely relevant.

The Plan must also address a permanent Partner-led governance framework and body to replace the SSC Transition Task Force. This Task Force is meant to be disbanded once transition activities have been completed. A permanent framework should be developed based on lessons learned during the operation of the Transition Task Force.

The Expert Panel and Gartner recommend that the refocused plan follow these guidelines:

Shorten the time frame for the Plan to a rolling three-year window. Plan for annual updates for two years, and a major Plan refresh in the third year;
Be very results-focused, and identify key benefit measures for each project. Ideally, these should be business-focused measures. Report on these frequently to monitor and communicate progress;
Focus on projects that deliver value in the planning time frame. “Chunk” long-term projects to ensure measurable and sustainable benefits can be reaped as each major component of the project is delivered; and
Drive the transformation project portfolio based on input and priorities identified by the SSC Transition Task Force; the transformation must be driven by Partner organisation priorities.

It is here that SSC should revisit and consider the detailed recommendations provided by Gartner in the Legacy IT Infrastructure and Enterprise Transformation of IT assessment. For example, if the revised Transformation Plan has a focus on sourcing, then the Gartner recommendations related to procurement should provide direction into the related initiatives.

Recommendations Roadmap

The figure below shows a high-level roadmap for the recommendations presented in this section.

Figure 8. High-Level Recommendations Roadmap

[This information has been severed]

Establish Partner Governance for SSC

This is a three-month effort to put in place an acting DM of IT, and the SSC Transition Task Force. This will set in place a Partner-focused governance body, augmented by experienced industry experts to provide insight and advice.

The task force is meant to serve a transitional role until the stabilisation initiative is complete and a new future direction for SSC has been defined. Once this has occurred, the Task Force can be replaced by a permanent body to be defined in the reconstructed future SSC.

Stabilise Service Delivery

This will be an 18- to 24-month effort, focused on a series of projects/initiatives targeting the stabilisation of the current legacy IT infrastructure. The SSC Transition Task Force will approve a set of key priorities to address. This, in turn, will instantiate a set of SWAT/tiger teams, each focused on a specific stability objective (e.g., email performance). Each team will be multidisciplinary, consisting of industry experts, SSC and Departmental subject matter experts.

Develop SSC Relief Valve Strategy and Capabilities

This will focus on developing a relief valve strategy and associated capabilities to allow Departments to meet their ongoing infrastructure needs during the transition period if they cannot be met by SSC. There will be a three-month effort to develop the strategy to determine when the relief valves should be applied, and then a nine- to 12-month effort to put in place supply arrangements to allow Departments to rapidly acquire and implement these services.

Baseline Current State

This will be an intensive 12-month effort to capture information related to the current SSC environment. It will focus on IT assets, costs and service levels. This should be conducted by a third-party organisation with the experience, tools and frameworks to produce a comprehensive baseline, while limiting impact to SSC.

This effort can be augmented with a benchmarking component that would allow the baseline to be compared to peer shared-service organisations. This would provide the GC and SSC with a view into the relative efficiency of SSC compared to peers.

This analysis becomes a key input into a reimagined future-state SSC.

Determine New SSC Organisational Model and Implement

This is a six- to 12-month initiative to examine alternate operating models that SSC could assume to provide increased flexibility in financial management, procurement and human resources management (for example, operating as a crown corporation). This will remove some of the limitations on SSC that hinder effective service delivery.

This will be followed by an implementation to the new model; the length of this transition could vary, based on the specific model chosen.

Begin Development of a Chargeback/Showback Model for Services

This is a preliminary effort driven from the SSC Transition Task Force, which could choose to strike a project team to execute the initiative. It will focus on examining the various types of chargeback models the GC and SSC could consider to support the funding/recovery of costs related to service delivery. It would also entail the selection of the most appropriate approach for the GC.

Service levels will be examined, and approaches such as tiered services can be considered and factored into the chargeback model.

Finalisation of this model must wait until the completion of the baseline assessment in order to determine current service levels and cost.

Reconstruct a Future SSC and Refine the Transformation Plan

This is an aggressive six-month effort to refine the vision for a future-state SSC and an associated Transformation Plan to achieve this.

Transformation can only begin once the baseline effort is completed. It will provide SSC with a known starting point from which to transform. Foundational initiatives, such as a new organisational structure for SSC, will be completed and can be factored into the Plan. Others, such as a chargeback/showback model, will have been partially completed and integrated into the Plan.

Lastly, based on progress made on selected projects from the existing Transformation Plan, some of these will be carried forward into the revised Plan.

Execute the Transformation Plan

The execution of the Transformation Plan will target a rolling three-year time frame, with a major refresh every third year. Execution of the Plan will be supported by a strong set of KPIs and benefit measures, which will be used to guide and fine-tune Plan execution.

Partner Governance Oversight Into Ongoing Transformation Initiatives

In-flight SSC transformation initiatives, such as the network consolidation, will benefit a future state, regardless of the long-term direction SSC will take. While the transition is taking place, the SSC Transition Task Force will provide advice and direction to SSC on the Partner priorities and focus areas that will benefit from selected current transformation initiatives.

The First 90 Days

The key actions to be taken in the first 90 days of implementing these recommendations are described below.

First Month: Appoint Deputy Minister of IT

The appointed Deputy Minister should be an individual experienced in the GC, be well-respected, “know how to get things done,” have past GC experience on high-profile initiatives, and have strong relationship-building capabilities.

Months 2 and 3: Build SSC Transition Task Force Team

The SSC Transition Task Force should have expert-level knowledge in three domains:

Knowledge of the Government of Canada — the operations of the GC and how to deliver projects and programs successfully;
Information Technology — knowledge and experience in the implementation of key infrastructure technologies supported by SSC, e.g., email, data centre, etc. The Expert Panel and Gartner believe the majority of these experts should be recruited from private industry; and
Shared Services — knowledge and past experience implementing successful shared-service organisations in both the public and private sectors. The Expert Panel and Gartner believe these experts should be recruited from outside the GC.

This Task Force should include:

The CIO of Canada;
PCO representative;
SSC President;
Deputy Ministers from selected Departments;
CIOs from selected Departments; and
Industry experts — this potentially includes CIOs from private industry, experts from vendor organisations, experts from consulting organisations, experts from academia, leaders of other shared-service initiatives, particularly in the public sector.

Selecting a strong, knowledgeable and experienced team will be vital to success. This group will lead, oversee and guide many of the recommended initiatives and projects required to set SSC on a correct future course. The group will have the following characteristics:

A DM with the ear of the Government;
Strong influence in the community — when this Task Force calls a meeting, people will attend;
Strong, expert-level IT knowledge;
Strong change management and communications skills;
Knowledge and experience of successful shared-service implementations; and
Governance, PMO and sourcing capabilities.

This Task Force will need an underlying support structure — resources for administration, financial management, reporting, a program management office, etc.

The target is to have the Task Force ready to be operating after 90 days.

Month 2: Develop Stabilisation Priorities

The President of SSC will lead a team (including a subset of the SSC Transition Task Force) to work with selected CIO representatives from across the GC to determine the major stabilisation issues that are impacting the GC today. These will be ranked in tranches of five/ten, with each group being addressed by tiger/SWAT teams that include a mix of private-sector experts, SSC employees and broader GC domain experts (e.g., application experts from Departments). After each round, the next group will be selected and addressed, with the process continuing until the infrastructure has been stabilised.

It will be vital to not spend time worrying about whether the right five/ten get selected; mistakes will be made, but it is vital that progress be made quickly. Throwaway investments may need to be made, but the goal will be to stabilise the infrastructure and have it maintainable until the longer-term transformation can be completed.

The goal is to have the first set of priorities ready for approval by the appointed Deputy Minister of IT on or before the end of the second month.

Months 2 and 3: Begin Development of SSC Relief Valve Strategy

The SSC relief valve strategy will accomplish two objectives. It will:

Put in place a strategy to allow Departments to continue to deploy new systems and solutions during the transition period, when demand cannot be accommodated by SSC; and
Put in place the capabilities to meet this demand.

This strategy would consist of guidelines to dictate when relieve valve options can be considered, any standards associated with these options and the options themselves, such as cloud infrastructure service providers. The capabilities would consist of the supply arrangements that would allow Departments to rapidly acquire and implement these services.

The Expert Panel and Gartner expect capability development will continue beyond the first 90 days to expand cloud capabilities, as well as provide access to other service options, such as managed service providers.

Once SSC Transition Task Force Reaches Critical Mass: Oversee Current SSC Transformation Plan

The SSC Transformation Plan should be put on temporary hold until the SSC Transition Task Force reaches a critical mass. At this point, the Task Force can review the in-flight/planned transformation initiatives and determine which should proceed and which should be put on hold. Some potential targets for continuation include the projects related to network consolidation efforts, as well as improvements in service management maturity.

After 90 Days

Approve, oversee and complete the stabilisation initiatives, including the ongoing prioritisation of new initiatives;
Provide ongoing review of new GC initiatives that require SSC services to determine their prioritisation and/or to approve alternative delivery methods such as cloud;
Complete the baseline/benchmark exercise to fully understand the current state;
Determine the ideal organisation structure for SSC moving forward (crown corporation, agency, joint venture, etc.);
Design the future-state SSC that addresses key areas such as a permanent governance model and framework, a chargeback model, service levels, and a cloud strategy/capability;
Develop a revised Transformation Plan that moves SSC to this desired future state; and
Provide guidance, direction and oversight into ongoing SSC transformation initiatives in-flight during the transitional governance period to the end of the second year.

Any questions regarding this Report should be addressed to:

Treasury Board of Canada Secretariat
90 Elgin Street, 8th Floor
Ottawa, Ontario K1A 0R5
Telephone: 613-369-3200
Toll-free: 1-877-636-0656
Email: questions@tbs-sct.gc.ca

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Date modified:: 2017-05-31

Management Summary and Recommendations: Shared Services Canada Resource Alignment Review

Acknowledgements

Table of Contents

Table of Figures

Management Summary

Background and Introduction

Work Area 1: Assessment of Large-Scale IT Infrastructure

Work Area 2: Delivery of Legacy IT Services

Work Area 3: SSC Transformation Plan

SSC Transformation: The Scale of the Task

SSC Transformation: Extraordinary Measures Are Required

Governance Is the Most Critical Gap

A Cross-GC Role for IT Is Required

The DM of IT Implements a Set of Key Recommendations

1. Establish Partner Governance for SSC and the SSC Transition Task Force

2. Stabilise Service Delivery

3. Develop an SSC Relief Valve Strategy for the Transition Period

4. Baseline the Current State

5. Reconstruct a Future SSC and Refine the Transformation Plan

90-Day Plan

First Month: Appoint Deputy Minister of IT

Months 2 and 3: Build SSC Transition Task Force Team

Month 2: Develop Stabilisation Priorities

Months 2 and 3: Begin Development and Delivery of the SSC Relief Valve Strategy

Once SSC Transition Task Force Reaches Critical Mass: Oversee Current SSC Transformation Plan

After 90 Days

Month 4 Onward

1.0 Recommendations

1.1 IT Operating and Service Delivery Model

Gartner IT Operating and Delivery Models

SSC Scope of Services

SSC Scope of Workload

Assessment of Critical Success Factors

1.2 Legacy IT Infrastructure Management

1.3 Enterprise Transformation of IT Infrastructure

1.4 Strategic Direction and Recommendations

The Current Situation

Legacy IT Infrastructure

Enterprise Transformation of IT

The Scale of the Task

Extraordinary Measures Are Required

Foundational Principles

Major Gaps Arising From the Assessment

Governance Gaps

Organisation Gaps

Funding Gaps

Planning Gaps

Requirements Arising From the Gaps

Governance Is the Most Critical Gap

A Cross-GC Role for IT Is Required

The DM of IT Implements a Set of Key Recommendations

Establish Partner Governance for SSC and the SSC Transition Task Force

Stabilise Service Delivery

Develop an SSC Relief Valve Strategy

Baseline the Current State

Reconstruct a Future SSC and Refine the Transformation Plan

The Correct Organisational Structure for SSC

Establishing a Chargeback/Showback Model and Service Levels

Re-examine Sourcing Approaches

Refocus the Transformation Plan

Recommendations Roadmap

Establish Partner Governance for SSC

Stabilise Service Delivery

Develop SSC Relief Valve Strategy and Capabilities

Baseline Current State

Determine New SSC Organisational Model and Implement

Begin Development of a Chargeback/Showback Model for Services

Reconstruct a Future SSC and Refine the Transformation Plan

Execute the Transformation Plan

Partner Governance Oversight Into Ongoing Transformation Initiatives

The First 90 Days

First Month: Appoint Deputy Minister of IT

Months 2 and 3: Build SSC Transition Task Force Team

Month 2: Develop Stabilisation Priorities

Months 2 and 3: Begin Development of SSC Relief Valve Strategy

Once SSC Transition Task Force Reaches Critical Mass: Oversee Current SSC Transformation Plan

After 90 Days

Any questions regarding this Report should be addressed to:

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