Next Generation HR and Pay

From Treasury Board of Canada Secretariat

Notice to readers

This document contains information which has been redacted in accordance with provisions of Part 1 of the Access to Information Act.

NextGen Initiative

Budget 2018 announced the Government of Canada’s (GC) intention to identify option for a long-term and sustainable pay system alternative.
TBS, with representatives from the Office of the Chief Information Officer of Canada as the digital advisors and Office of the Chief Human Resource Officer as the business owner, are working together as the NextGen team to identify a way forward.
The NextGen team initiated an iterative dialogue with vendors as a means to identify the technological options that will address the HR and pay needs of the government.
The new solution has been driven by the GCs business needs, informed by engagements with employees and HR and pay practitioners at all stages of the procurement process. In addition, NextGen has had ongoing dialogues with bargaining agents, including the establishment of a Joint Union Management Committee to provide regular updates and seek input on NextGen.
To date, three vendors have been deemed qualified to deliver a new solution for the GC: Ceridian, SAP and Workday. Work is underway to select a preferred vendor (from the list of qualified vendors) with whom the GC can work on the development of a viable solution in pilot(s).
Department of Finance approved a $117.1M investment in September 2019, to co-design and deliver pilot projects for the Next Generation human resources and pay solution. These pilot projects will test potential solutions against the real complexities of the federal government’s human resources and pay systems.

Key Lessons Learned

Sense of Urgency

Paying employees accurately and on time is a top priority responsibility for any employer and must be treated as a crisis.

Space & Flexibility

The project must include an iterative process (e.g. agile) and a dedicated team to shelter core functions from demands of information.

Empowered and Accountable Leadership

Project Champion should be the single point of accountability, working in concert with the Business Owner. Governance should include independent oversight.

Communication, Engagement & Partnership

Experts with experience should be leveraged to validate work. Stakeholders should be consulted at all phases of the initiative. Information should be transparent.

Holistic Approach

Business needs must drive technology decisions. Involvement of HR and pay professionals will be critical.

Engagement Built-in

The NextGen team has initiated a broad engagement strategy with external and internal stakeholders to ensure investments are both strategic and representative.

External Engagement

Industry

Vendors
Consulting firms

Organizations

Other Governments (Alberta, Australia, California)
Large enterprises
Digital Advisory Board

Internal Engagement

Departments

Core public service
Central agencies
Agencies/Crown Corporations

Senior Officials

Deputy Ministers
Ministers
Parliamentary Committees

Unique Departments

Individual pay system (DND, RCMP, CRA)
Secure environments (CSE, CSIS)

Users

Employees
HR practitioners
Compensation Advisors
Managers

Community of Specialists

CFOs
CIOs
Heads of HR
Accessibility
Security
Official Languages
UX/UI Design
Enterprise Architecture Review Board

Unions

Bargaining agents

Project Partners

PSPC
SSC, PSC, CSPS

Learnings

Industry best practices
Lessons learned from similar undertakings
Interoperability with existing systems
Compatibility requirements
User interface
Functionality (e.g. onboarding, talent management, recruitment)
Security
Accessibility
Complex work environments
Business transformation
Data migration
Cloud Connectivity

Engagement

Parliamentary Briefings
HR Workshops
Industry Day
Online - #NextGenHRPay

Adopting an Agile Procurement Approach

The NextGen team has adopted an agile method to support an iterative dialogue with industry and stakeholders.

TABLE CAPTION
Traditional Waterfall	Agile
Process run in its entirety	Smaller/faster sprints
Long blackout contractual periods	Gated Approach
Course corrections only available at the end of the process	Course corrections as needed throughout the process
Scope is determined and set	Full potential scope is charted but is incremental, flexible and adaptable
Limited interactions with vendors and users	Interaction with vendors and users is ongoing
All requirements need to be known and documented up front	Requirements evolve through collaboration, industry feedback and best practices

Agile Procurement Contracting Outcomes

Qualified List of Suppliers (QLS)

A Qualified List of Suppliers (QLS) is a set of contracts with basic terms and conditions that enable a restricted group of qualified vendors to compete for work.

Flexible contracting arrangement through which services may be procured efficiently and effectively
Three vendors and their partners qualified:

Ceridian [redacted]
SAP [redacted]
Workday [redacted]

Contract Liability: Guarantee of $5,000 over 2 years

Task Authorization

A Task Authorization (TA) is a process enabling the client to authorize work by a contractor for different problem sets on an "as and when requested" basis in accordance with an existing contract.

Multiple Task Authorizations can be competed amongst the vendors for different work packages or business problems.
Qualified vendors will be ranked where the top vendor will earn the right to work with us on the different work packages or business problems.
Task Authorization contain key decision points (KDPs) where tasks may be extended or refined or work stopped to meet the business needs. E.g. Extended to work on pilot and subsequently extended for implementation and run phases

Working through a Gated Approach

Testing The Solution

1. HR & Pay Solution Pilots

Design and build a new HR and pay solution (in up to two core departments) which would run in parallel to their existing HR and pay systems. During this pilot, employees’ HR and pay transactions would continue to be processed through Phoenix and existing HR systems, eliminating the risk of additional pay issues. Pilot results would allow TBS to gather information on the potential replacement system and related business processes with the goal of testing, in a low/no-risk way, whether a potential replacement works and what it would take for a broader GC deployment and considerations for enterprise management.

2. Pay Solution

Conduct a feasibility study with a separate agency (outside the core public administration) to identify the resources and level of effort required to transition away from Phoenix, using a combination of the HR component of the organization’s existing, partially integrated system with one of the new pre-qualified solutions. If the study yields positive results, [redacted]

Key Timelines Between Now and Early 2020

Selection of the vendor(s) is expected to be completed in the fall of 2019, with work to design the pilots running through to January 2020

Budget 2018 - Authorities. Text version below: — **Figure 02: Budget 2018 - Authorities**

The Need for Sustained Urgency

Impact on Employees

Over 200,000 public servants have at least one outstanding pay issue
Many public servants have suffered financial hardship or mental health effects

Relationships with Unions

Loss of trust
May reinforce criticism on the lack of a funding commitment in Budget 2019

Relationships with Vendors

May compromise strong working relationships developed
Vendors may move on to other projects

Mounting Stabilization Costs

Over $1B allocated to date to stabilize Phoenix and Pay Centre operations

Way Forward

Between now and December 2019, NextGen will identify a preferred vendor from the list of qualified vendors, with whom the GC can work on to develop pilot(s).
NextGen will work collaboratively with stakeholders (e.g. vendors, pilot departments, bargaining agents) to conduct pre-definition work and to prepare for the pilots to set ourselves up for success
[redacted]

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Date modified:: 2020-03-12