I have on my left side Mr. John Glowacki, the chief operating officer for Shared Services Canada. On my right side is Monsieur Alain Duplantie, the chief financial officer for Shared Services Canada, a recent addition to our department.
With that, Mr. Chair, I would propose to go quickly through the overview.
The objective here is simply to give you an overview of SSC's mandate, of its information technology transformation agenda, of its short-term priorities, and of course to answer your questions.
SSC was created five years ago to improve IT infrastructure service delivery, transform the government of Canada's email, data centres and networks, and generate value by implementing a government-wide approach to managing IT.
SSC was set up over a period of time. It was announced in August 2011, and then there were the acts that established it and several OICs. It involved the transfer of personnel, assets, and contracts from 42 separate departments and unique organizations into one central department.
Something of this order of magnitude is unprecedented in the Government of Canada. When you think about a merger and acquisition, usually you're talking about two firms, and effectively here, we're taking personnel and assets from 42 firms. That gives you a sense of the order of the transformation overall. To carry out our mandate, we work very closely with the Treasury Board Secretariat, Public Services and Procurement Canada, the security agencies, and all the partner departments.
The starting point we had is one of the parts I'd like to underscore. It was very diverse. There were about 1,500 mission-critical systems, applications that cover very important programs for the Government of Canada around benefits, employment insurance, policing, and tax systems. The overall order of magnitude was about $2 billion per year on this suite of services. To give you a sense of scale, at the time SSC was established, the overall spend on IT in the Government of Canada was about $5 billion. So roughly 40% of the overall expenditure was affected by the transfer and creation of SSC.
The balance of that expenditure, which still resides in the departments, is on the applications that are running on the infrastructure and the end-user devices, for example, that are maintained in the departments: laptops, desktops, all those types of devices.
We started with 63 different email systems for 43 departments, and more than 500 data centres varying in size and quality. Over time, we've discovered a wide range of—I wouldn't call data centres—servers and equipment spread across the country as well. There were 50 wide-area networks that are siloed, set up narrowly, which didn't necessarily talk to each other in over 3,500 buildings.
That gives you a general sense there's a lot of duplication and a lot of possibilities for efficiency. I'll get to it in a bit, but with all of these different points of entry into the Government of Canada systems, it also provides a significant security concern.
The starting point was complex, costly, and insecure. It has a long-term unfunded liability. As the Auditor General noted in his report of 2010, there needed to be significant investment. That was one of the factors that led to the establishment of Shared Services Canada.
What's the transformation about? It's about consolidating those data centres. We're looking at going from over 500 to about five data centres, from 63 email systems to one email system, from more than 50 siloed networks to one Government of Canada network, and modernizing the telecom systems. A lot of the telecom facilities we have are nearing end of life. We need to provide for the procurement of a centralized spot to do the procurement of workplace technology devices with a view to improving the overall security of those devices that's permitted by the centralization.
What will Canadians see, and those clients who will provide those services to Canadians? They'll see fewer systems, fewer failures of those systems, improved security, more bandwidth, more storage, and things like improved video conferencing.
How does this all fit with the bigger picture? In a digital world, we'll be more capable of handling the big data, supporting the mission-critical applications, protecting the sensitive information of Canadians, and having more flexibility in terms of the storage and compute capacity for the government. This is becoming a big issue in the science community, for instance, where you have very large datasets that are initially there, but then the scientists use them, crunch them, and don't need them anymore or want to archive them. Do you want to put that in a data centre and hold that for the Government of Canada on an ongoing basis? Probably not, if it's unclassified data.
All of this aligns with overall digital service delivery, efficiency in internal services, and the modern agile public service.
I think that SCC has made significant progress in its transformation. As I said earlier, the data centres are an important aspect.
We created three enterprise data centres for the Government of Canada. We made improvements to the process and significant improvements to the system's security. We established security operations centres. We examine all of the government's purchases and verify where the equipment comes from, to make sure it is safe.
Finally, we have substantially streamlined the telephone system. We awarded contracts to two companies to begin streamlining the networks. The rollout began this week and we have begun installing and implementing the new networks. For this project as well, this is just a start.
In 2016-2017, SCC will reset its plans for transformation. We are currently carefully reviewing all of the hypotheses that underpin the transformation plan. The moment is crucial for that review and study. We are closely examining budgets, the time needed to reach objectives, and the size of the projects, in order to be able to meet the government's needs in the context of an economy based on innovation and the services provided to Canadians.
We're moving to a different type of business model relative to what was established previously, with clear focus on the elements that are necessary for the transformation and the operations of the department to be successful: a new service strategy to reinforce the delivery of quality service to the clients; a financial strategy looking at different pricing strategies; and the long-term sustainability of the IT infrastructure. Project management is key for a department like SSC.
And finally, the people strategy, which is probably the most important of all, given that our employees are the most important asset that we have; the skills and talent that they bring will make the projects happen.
There are a number of lessons learned that I draw out of the experiences we've had. First, culture change is a big part of what this project is about, and you can't underestimate it with 43 different departments coming together, with 43 different ways of operating, and 43 different ways of thinking. It's an issue.
Second, and this flows from the Auditor General's observations as well, you need solid benchmarks at the start of the exercise to gauge your progress and to know what infrastructure you're inheriting. The estimates of the funding that was being spent on the infrastructure were rough. What the assets were, to a large extent, was not completely known. The service levels that were coming with the equipment were not established. In some cases there were services, but in a lot of cases there wasn't a benchmark to start.
A third lesson learned, that I can see is that, in these types of exercises and projects, it's important to invest at the outset. I'd over-invest in training people getting ready for the transformation. I'd over-invest in the tools and the processes to make sure you have all of the equipment and tools you need to jump-start and make sure of the service levels to clients. As Mr. Blaney was saying, the service levels had suffered, and you want to put safeguards in place to make sure that doesn't happen.
Finally, I'd take more time to plan to get into a deeper level of detail before launching the projects, and that's why what we're doing now is so important. We're looking at what the realistic procurement times are and what the times to do the projects are in cooperation with partners. It's an open dialogue we have. We need to know what their readiness is to move into a new data centre. They need to invest time and resources on their side to do that. In addition, for us to have all of the equipment there, the networks in place, and the security in place, is a major exercise is orchestration. Those are some of the key lessons I take out of it.
When you go through this kind of exercise, you are always going to do a number of things in parallel. I am saying this because I have done this before, on this kind of scale—not 43 departments, but a quarter million end-users, yes. You don't want it to be a serial exercise.
The idea that there is always low-hanging fruit, targets of opportunity.... We knew we could close some number of data centres in the first year, and that happened. That is how we got to the 80 sites. I will call them “sites”, because in one case we found a server rack in a men's room, for instance. That is not a data centre, by any means.
Then you have others, which really were good data centres in their day. Those obviously take longer. If it is a closet somewhere that somebody shoved a server in, we go for those opportunities much more quickly.
You don't want to wait and say, “Well, we want to get all the planning done to the nth degree” before you take advantage of those opportunities. That is something that the organization has done.
While this wasn't called out in some of the previous reports, unit costs have been reduced for servers, for instance, by 30%, and for storage per terabyte by over 50%. We don't need the next transformation plan. We are achieving those today, but to really achieve the end state we need to revisit our plan, and that is what we are doing right now.
I want to get back to the Auditor General's report, because I think this is of the utmost importance both for the department and for taxpayers.
Again, there were some not very encouraging words from the Auditor General, who said something like Shared Services Canada has a sloppy disregard for both the quality and quantity of services it provides to 43 departments.
I was reassured when you answered Ms. Shanahan's question that it was not necessarily a matter of budget, but probably more a matter of culture within this new organization.
Can you, as the head of this organization, provide us with an update on follow-up to the recommendation of the Auditor General, but most profoundly, I would say, on the change in the mentality of this wide organization in terms of providing a high-level standard of services to departments, to its clients?