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Government of Canada (GC)
Financial Management
Transformation (FMT)
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Objectives of the Session
To provide an update on Financial Management
Transformation in the federal government of Canada and
to share experiences of a Canadian Shared Systems
organization.
• Background and Context - Gov’t-wide, Treasury Board Secretariat
(TBS) and Office of the Comptroller General (OCG)
• Financial Management Transformation Update
• Experiences as Shared Systems Provider
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Background – How Government Works
•
The parliamentary structure in Canada is based largely on the Westminster
(British) model.
•
Government priorities are set out in the Speech From The Throne read at the
beginning of each session of Parliament.
•
Governor General (on the advice of Prime Minister) appoints cabinet
members.
•
Prime Minister issues a “mandate letter” to each Minister setting out priorities
for the Minister’s portfolio / department / agency / crown corporation, to guide
the Government’s priorities and agenda for each Minister.
•
Each Department/Agency is led by a non partisan public servant (Deputy
Minister) whose mandate is to implement the Government’s agenda.
•
CFOs are “career” public servants (not politically appointed)
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Background – Role of the Treasury Board (TB)
TB is responsible for the management of government, by translating
policies and programs approved by Cabinet into operational reality and
by providing departments with resources and administrative
environment they need.
TB is the General Manager of the public service:
•
Management Board: promoting improved management performance and
approving policies to support the prudent and effective management of the
government's assets, financial, information and technology resources.
•
Budget Office: examining and approving the proposed spending plans of
government departments, and reviewing the development of approved programs.
•
Employer and People Management Office: setting people management policies
and managing compensation and labour relations, including determining the terms
and conditions of employment.
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Federal Budgets
•
Over the last few years, the Government has made consistent commitments to
transform and renew administrative services including financial management.

Budget 2012: made commitments to streamlining, consolidating and standardizing
administrative functions and operations within and across organizations.

Budget 2013: called for whole-of-government approaches for transforming
administrative functions.
functions

Budget 2014: indicated that achieving leaner and more efficient government is a key
part of the government’s plan to return to balanced budgets by 2015.
Blueprint 2020
•
June 2013, GC launched Blueprint 2020, a dialogue about the future of the Public
Service with the goal of ensuring that it remains a world-class institution.

Public Servants – in all regions and at all levels across Canada – contributed to the
discussion.

Called for a “whole-of-government approach.”
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Back Office Transformation Strategy
•
Focus on a near term plan, guided by the long term vision.
•
Phased implementation to manage convergence over time towards the target state
enterprise model.
•
Issue clear direction and timing regarding adoption of mandatory enterprise back
office systems (for HR and FM) and services; other areas to follow in the long term
term,
aligning with the GC service policy.
•
Gates provide opportunities to adjust direction and pace.
Gated/Phased Transformation
Continued ministerial oversight and direction
Smaller, more productive
workforce
Today
Near-term plan
& priorities
Target
Enterprise
Model
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Fewer, less costly systems
More responsive
administrative services,
reduced business risk,
Better information for
decision-making
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Financial Management Transformation
FMT’s vison is to evolve and modernize the financial management function
across the GC in order to:
•
Enable CFOs and their organizations to focus on higher-value services to programs
and decision makers.
•
Provide managers and decision-makers with effective, rigorous financial and resource
management information, and streamlined financial services.
•
Enable the Government of Canada to act as one enterprise
Target Business Outcomes:
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Steps to Advance FMT
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Next Steps
• Understand enterprise and departmental business needs


Understand priorities and pain points
Validate and define FM functions within target GC FM business model
• Further align FM systems-related investments to achieve better value for current or
planned expenditures
p
p
and drive standardization
• Define a “common financial management language” for government (Target Information
Model) as part of Enterprise Information Reporting and Analytics (EIRA)
• Enterprise Blueprint for Single FM System


Design for enterprise structures (e.g. chart of accounts and master data structures)
Provides basis for business process and system configuration standards.
• Define Vision and Strategy for FIN and HR integration
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Central Agency Cluster – Shared Systems
•
CAC-SS began on April 1st, 1997 as part of the first wave for the GC using the SAP
R/3 ERP for Financial and Materiel Management – combined the Department of
Finance with Treasury Board Secretariat for a “shared” ERP. First Implementation.
•
One SAP instance with separate company codes; separate configurations and
modules.
•
Added the Privy Council Office and the Canada School of Public Service in 2004
as part of creating a “Cluster” of Shared Systems. First Cluster.
•
Relatively stable (450 SAP Users) until the 2012 federal budget which called for a
reduction in “back-office” costs. This set off a pathway to change for CAC-SS
which ultimately resulted in us becoming part of the FMT programme for change.
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Why Would CAC-SS be Part of FMT?
• The Cluster is providing real and practical information to FMT on the
process of on-boarding new Clients to an SAP Cluster – Lessons
Learned can be invaluable – both positive and negative.
• We have a long
long-established
established Shared Systems Cluster with employee
expertise in many modules of SAP – we can provide practical advice
and guidance within an operational context to those creating a new
government-wide SAP Instance.
• We continue to on-board new clients as much as possible to assist the
FMT programme in reducing the Total Cost of Ownership for an
important back-end system.
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CAC-SS – Growth and Change
• We are now in our 4th consecutive year of on-boarding new departments
so that economies of scale can be harvested with the SAP ERP.
• Each project has been different for different reasons and adaptability on
both our (Provider) and the Client sides has been key.
• April 01, 2013 – on-boarded the Canadian Transportation Agency – small
Agency with 200 FTE’s – SAP Users in a Centralized environment.
 Twist – only 3 months notice – no time for business blueprint or fit-gap – “take
what we give you” process.
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CAC-SS – Growth and Change
• April 01, 2014 – on-boarded the Office of the Superintendent of Financial
Institutions (600 FTE) and the Immigration Refugee Board (450 FTE).
 Twists:
o OSFI added a second legal entity (Financial Consumer Agency of Canada and
significantly changed our Revenue and Costing footprint.
o IRB required a specialized Invoicing configuration due to the use of Interpreters for
Immigrants.
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CAC-SS – Growth and Change
• April 01, 2015 – on-boarded the Administrative Tribunals Support Service
of Canada – 450 FTE.
 Twists:
o 11 Tribunals in 9 different departments using 4 different financial
systems – needed to consolidate
o First “mid-year” cut-over due to need to close books as one
department on March 31, 2015
• April 01, 2016 – Canadian Grain Commission – 450 FTE.
 Twist – first project for an organization outside Ottawa
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What Did We Learn? (Rob’s Top 10)
• On-boarding is challenging because you not only add numbers, but also
changes to processes or footprint – be flexible within a
standardization frame-work. Walk the tight-rope between “business”
and “systems”.
• Costs – will vary but as a general rule, expect to re-invest at least 20%
of any new revenue you receive from on-boarding new clients. Staff,
consultant time, hardware and software licenses may all increase
depending on the depth and breadth of any on-boarding project.
Related to this, do not underestimate the resources you need to
maintain after on-boarding. This is not a “straight-line” relationship and
your overall org structure may change several times.
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What Did We Learn?
• Don’t think “organizationally” when on-boarding. We have found that
the best chance of success comes from those organizations with
“like” business processes and even cultures if you can.
• It’s
It s about People – SAP Clustering is not a technology project – it is a
business process project – and that means it is a “people” project
since people are integral to business processes. We find that giving
ourselves at least 3 months of “Phase 0” or time to organize is
crucial to beginning the project in the right perspective. You must
know the customer and their “orientation” to the project. Manage their
expectations from Day One.
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What Did We Learn?
• SAP as a software. Yes it is about business processes but you still
have to make a software work. Ensure you look for “gotchas” related to
in-year on-boarding for example – watch out for Asset Accounting.
Know your software – it is good but it isn’t perfect.
• Consultant Support – very few organizations can afford to carry
enough staff to maintain a software Cluster and expand it. Keep longterm relationships with consultants if you can. They know your business
and can adapt quickly to minor changes in process for specific clients.
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What Did We Learn?
• Governance – regardless of your style of governance, you want to
keep your clients once you have them. Be flexible but use a clear and
standardized set of “rules of engagement” and Service Levels –
problems here can take up far too much time and distract from moving
forward Ensure the projects have an engaged and powerful Steering
forward.
Committee.
• New Requirements – these can be killers if you don’t understand what
they involve. Example – adding an org that has audited financial
statements to a Cluster that does not have this can have a whole “tail”
of work to satisfy requirements that you are not used to. Understand
new workload before adding clients. You can build it, but can you
maintain it?
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What Did We Learn?
• Change Management – do not underestimate this one. It is related to my
“people” point earlier but is much broader that just that. SAP forces
business process changes, roles and responsibility changes, data and
information changes and much more. Have everyone prepared and
invest in experts to help you navigate
navigate.
• Timing – timing is everything! From a go-live of April 1st to make
transition easier to ensuring that the first meetings are timed in the
calendar year for maximum attendance, this is important. There is
enough to do – don’t fight the calendar.
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Questions?
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Speakers
• Lynn Gibault, CPA
 A/Director, Financial Management Transformation, Treasury Board
Secretariat, Government of Canada
y g
@
g
 lynn.gibault@tbs-sct.gc.ca
 613-854-7793
• Rob Morrow, MBA, PMP
 Director, Corporate Financial Systems Treasury Board Secretariat,
Government of Canada
 rob.morrow@tbs-sct.gc.ca
 613-995-3606
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