Since 2011, a countrywide Shared Service Organization (SSO) in Canada has been used to streamline IT, save money, and eliminate waste. But has the experiment truly succeeded?-By Donna Chan

Shared services organizations (SSOs) have great potential to save operational funds and deliver support efficiently. However, not all SSOs live up to their potential – or at least, not to their maximum potential. This shortcoming is a topic of much debate in Canada, especially as the country’s grand SSO experiment moves into its second decade. Here, the history, key issues, and future potential of Canada’s SSOs will be discussed.

History of Shared Service Organizations in Canada

In 2011, the Honorable Tony Clement, then serving as the President of the Treasury Board and Minister for the Federal Economic Development Initiative for Northern Ontario, announced measures to begin using SSOs in Canada. He pitched it as a cost-saving measure that could streamline IT, save money, and end waste and duplication across the country.

As part of this effort, Canada went from having over 100 different email systems, over 300 data centers, and over 3,000 networks down to just one email system with a reduced number of data centers and networks. The move was endorsed by a number of consultancy groups, including PricewaterhouseCoopers, and large investments were made.

By 2014, huge growth was already evident in the Canada shared services market compared to previous years. This growth was led by sectors including healthcare, government, and banking and financial services. Much of this growth was attributed to Canada-for-Canada services.

Most Canadian shared services groups show a tendency for insularity. More than three-quarters of the shared services are from Canadian HQ or enterprise companies. Only a small percentage comes from US-based organizations. Instead, the focus is on serving domestic customers with less than 20% serving North American business customers.

Now, more than a decade later, Shared Services Canada (SSC) works to deliver digital services to all Government of Canada organizations. They provide secure, modern, and reliable IT services so all federal services can deliver the programs needed by Canadians. For instance, in December of 2022, SSC worked with the Royal Canadian Mounted Police to plan the security for a visit by Pope Francis.

Key Initiatives and Challenges for SSOs in Canada

SSC has been tasked with a number of highly visible initiatives. However, achieving these initiatives hasn’t always been easy. On the way to a smooth shared services experience, SSC has faced integration hurdles, cost overruns, and delays. A large part of SSC’s mandate has been eliminating duplicative systems across government agencies. This has included a reduction in the number of email boxes, trimming down the number of data centers, slashing the phone lines in use, and bringing the government’s Wide Area Network system down to one system from 50 separate systems.

Most of these initiatives remain “in progress” with no clear end in sight. The email systems integration, for example, experienced multiple delays and cost more than $100 million. Data centers have opened slowly, even as existing sites were shut down, which created some instabilities in the systems. And, rather than being a pure cost savings within the government, some of the integration has required large contracts with private firms.

A follow-up challenge is that even as infrastructure type IT services are being consolidated, many other applications are not. As a result, while disparate departments are expected to share a single data center, they are not sharing business app subscriptions or UX integrations. Thus, many feel that while the SSO may offer some savings for taxpayers, the government as a whole may not be fully capitalizing on the potential cost savings as effectively as a private corporation might.

What The Future May Hold For SSOs in Canada

The SSC group operates on multi-year plans which frequently (but not always) align with government legislation and mandates for specific activities. As a result, the future of the SSC is not entirely under its own control, nor does it respond to pure demand influences as a privately run share services group would. This means that its future influence may help the government achieve certain objectives private enterprise wouldn’t undertake, but at a cost and on a timeline that may be suboptimal.

Take, for example, the current three-year plan’s emphasis on accessibility services. Market factors and laws have private firms moving swiftly to ensure fully accessible digital services for users throughout Canada. The SSC, on the other hand, has a mandate to make public sites accessible to all but not the sharp market pressure to ensure accessibility as soon as possible.

In other cases, the timeline is even more stretched – reaching out as far as 2040! This is well beyond what a private company might plan for, and makes a number of assumptions about implementation speed and contracting that may not hold true over time. Further, this leisurely pace of implementation makes it likely that by the time the project is completed, it may be obsolete compared to what private sector firms are able to provide.

Of course, these realities are well known by the executive leadership, and the legislators who pass the laws and make the mandates. This is why the SSC continues to be a topic of vigorous debate. Canada wants to be competitive on a world stage, and the ability of the government to affordably deliver top-notch services and programing to the public is a part of that goal. As a result, SSOs within Canada and the SSC in particular may expect the future to hold new pressures for achievement and flagship accomplishments that Canadian leaders can use to showcase Canada’s technological potential and efficiency.