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Will Political Oversight Solve the Canadian Government Payroll Problem?

 

May 1, 2017

Recommendations for the Phoenix Pay System Working Group

The Government of Canada implementation of  Oracle PeopleSoft ERP, implemented by IBM, as a single payroll system, known as “Phoenix”, has been beset with problems. “Since the Phoenix system was launched in February 2016, tens of thousands of public servants have been underpaid, overpaid, or not paid at all.” There has been significant political fallout.

Prime Minister Justin Trudeau has announced a working group to “address Phoenix pay issues“. This committee includes:

The problem with government transparency

Institutions resist transparency when there is high perceived political risk. The political intent of the creation of the working group may be to reassure public servants that the problems will be fixed. Government communications about Phoenix, to date, gives the appearance of opaqueness:

The desire to control the message, as it often does in this social media world, has had very much the opposite effect. Hardly a week goes by without a story about the misery heaped on a public servant or retired public servant. There are also protests.

Recommendations

The Prime Minister and Cabinet members have acknowledged that there is a problem and it’s important – step 1 of any crisis communications – but it’s now time to describe exactly what will be done about it. In other words, the political damage for revealing the exact problems will be no where as damaging as what Canadians are imagining.

The problem with executive oversight

Many large projects encounter problems, particularly ERP implementations in government. (We keep a running count of these failures.) The introduction of an executive working group can signal the unleashing of resources to problem solve. My observations, back up by studies from the Harvard Kennedy School of Government courses on Leadership Decision Making and Leaders in Development, suggests that there are dangers:

  • Project teams tend to discount advice from experts and those who are more familiar with problems, and are more likely to defer to the authority of leaders who may not have the requisite skills or experience
  • Additional oversight tends to add latency to fixing problems, with more meetings, reports, scorecards and other interruptions
  • Stress tends to make project teams more hesitant to find creative solutions
  • Simplification of highly complex problem and bureaucratic filtering of information can give an unrealistic picture of the problem footprint to senior leaders

Recommendations

The working group needs to enable change and provide necessary resources and encouragement. There needs to be a space experts to solve issues and to experiment. The working group can leverage knowledge gained in complex projects (McKenna, MacKinnon), payroll (Morneau), and financial management (Morneau, Brisson, Goodale) to advise on approaches to problem resolutions, but without deep ERP expertise, unlikely to help on how to fix the problem. 

The problem with “fixing a problem”

There are many ways to fix a problem, but some are not sustainable. The core method of fixing pay issues has been hiring of staff. It is unclear whether this approach is a stop gap while technology issues are fixed, or whether workarounds will be the order of the day – or every second Thursday. The focus on ‘fixing the problem’ may not fix the systemic problems:

  • How did the process to sole source PeopleSoft, a proprietary legacy ERP application that requires customization, to replace a more legacy application, contribute to ongoing IT problems?
  • To what extent was the procurement process that required IBM to meet strict deadlines, and the changes made by the government for training, contribute to the problem?
  • To what extent did legacy “best practices” in waterfall-style implementation lead to problems?
  • Are there any patterns coming from other less-than-success projects like Shared Service Canada, web content management, Canada Council grants; and successful IT projects like the Buy and Sell e-procurement site?

Recommendations

The working group should take the time to identify systemic issues and make changes to information technology policy. The government cannot afford to waste a failure like this. The ‘Phoenix’ could rise again, this time as the instigator of new IT procurement, agile implementation, and cloud computing guidelines.

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.
Doug Hadden

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