Automated language translation … a solution to public sector communication requirements

September 2009

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September 2009 www.summitconnects.com

FROM THE EDITOR

September 2009

It is hard for me to believe that summer has passed and here we are in September already. While the weather is cooling, many things are just heating up, including a variety of seminars, conferences and training opportunities designed with you in mind.

And as always, in the information technology sector, things move as fast as the seasons seem to pass. Our fall Focus on IT issue highlights how evolving technology makes more and more possible… and also how technology evolves to support our evolving world. The influence that each has on each other seems to create a circle of increasing productivity.

In this issue, we focus on the procurement challenges of acquiring open source software, on the developing translation software and on how enterprise software properly acquired and implemented can change the public sector workplace. We also look at some procurement issues in the area of Ontario’s eHealth system.

In my recent Editor’s note, delivered to you by email, I requested your participation in a short survey on how your organization handles e-waste disposal. Please take a few minutes before September 30 and take the survey at http://www.aberdeen.com/survey/6221Ewaste_summit/

I would like to welcome as publisher of Summit magazine, Steve Bauld. His experience in both the public and private sectors and his passion for procurement offer much to benefit this magazine and you, its readers.

.

Please also note the information on our You Asked for It! workshops, designed with input directly from you. Information on our fall workshop is now available in the notice next to this letter and also at www.summitconnects.com .

Enjoy.

.

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Regional sponsor: Ontario Institute of PMAC October 16, 2009 in Ottawa Fee to attend is $500 and includes workshop materials and two books by Bauld and McGuinness.

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CONTENTSSeptember 2009

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PUBLISHER Steve Bauld [email protected]

Editorial EDITOR Anne Phillips

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CONTRIBUTORS: Mike Gifford, Hannah Grap, Andrew MillerRalph Blauel, Steve Bauld, Kevin McGuinness

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Automated language translation No matter the language, IT translation software is increasingly providing a solution for public sector communication requirements. by Hannah Grap Procuring “free” software Governments face some challenges when deciding to procure open source software. Understanding the value and the options open are key to success. by Mike Gifford Government, citizens, services, growth Ontario’s Halton region maximizes its IT investments to support organizational efficiency and citizen service. by Ralph Blauel eHealth lessons What can we learn from the procurement processes being scrutinized at Ontario’s eHealth agency? by Andrew Miller

opinions A house divided municipal matters …It is “particularly critical that the exclusivity of staff and council responsibilies be made both express and manifest in relation the purchasing function.” Bauld and McGuinness look at this important element of municipal government.

I want to welcome Steve Bauld, as the new publisher of Summit: Canada’s magazine on public sector purchasing. Steve has worked in procurement for over 20 years in both the public and private sectors. He is a noted author and speaker on procurement issues. His experience and knowledge will help Summit magazine serve you in even more and better ways.

McEvoy Galbreath President, Summit Group

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The Web has closed the gap between countries and people, allowing users around the world to exchange opinions and information in entirely new ways and in more languages. Nearly 1.5 billion people are now online. What’s more, the Web is increasingly used as a communications medium through social media – including social networks, message forums, blogs and email – allowing people to interact and share information around the world, regardless of location. This growth of content creation and distribution around the world has created an enormous challenge for both government and commercial

organizations that need to communicate and access information in and across multiple languages. Enabling government objectives Government organizations need solutions that enable mission-critical decision making. This typically includes rapid access to all relevant information, and the ability to search and quantify unstructured information from a variety of languages.

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by Hannah Grap

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For hundreds of years, these organizations have relied on translators for this work to meet intelligence, commerce and diplomacy objectives, but the digital era poses special challenges for translators. The volume of content to be translated is now so massive that it vastly exceeds the limits of the world’s human translators, even working at full capacity. To make matters more complicated, digital content appears in a variety of different formats and languages – and it’s growing exponentially. Today, there is a solution to this challenge. Language translation software offers organizations innovative and expanding possibilities. Translation technology has advanced to the point where it can offer a trusted, reliable level of translation quality that conveys meaning quickly and accurately. By dramatically lowering the cost of translation while still delivering translation quality, automated translation software offers a range of opportunities inconceivable just a decade ago. Language Weaver, one of the leading developers of translation software, commercialized a statistical approach to automated language translation and natural language processing. This breakthrough technology overcomes the weaknesses that have limited commercial success for automated translation in the past and now can enable human communication across languages. By adding automation to the translation process, government organizations can quickly translate documents, blogs, websites, and focus on supporting language efforts where it is difficult to scale human translator resources. Only relevant documents need to be sent to humans for a more accurate translation and analysis, allowing governments to prioritize and maximize translation resources and gain significant improvements in productivity.

Deploying automated translation for government For government organizations, the key objective is to get as much content into one language as quickly as possible so that decision makers have timely access to relevant information from a variety of sources. Currently, Language Weaver deploys automated language translation solutions in a variety of ways in the government sector. In many of these deployments, the automated language translation software is seamlessly integrated with existing third-party applications to accelerate access to foreign language information. Below are some examples of automated language translation in action:

Foreign broadcast monitoring: Users see and hear the original news broadcast in a foreign language and see a transcription of the original broadcast with a translation provided by Language Weaver. Using trusted technology from partners, all of this is done in near real-time (5-30 minute delay from live broadcast). Multilingual search: Users are able to search the web in another language, such as Arabic. The application translates an English query into Arabic, searches the web in Arabic and returns the original Arabic search results, with the English translation. Users can translate each page in the results on-demand using Language Weaver's software. Users retrieve much different and more relevant results than if they were searching only in English. Cross-lingual chat: Users can instant message or “chat” in their native language with foreign language speakers. The application provides a translation for each message sent, allowing human communi-cation across languages.


Ad-hoc document and website translation: Users are empowered to translate documents and websites to and from a broad list of languages. This initial translation enables users to escalate critical information for further analysis and interpretation.

Leveraging automated translation in government Automated translation software cost-effectively enables government organizations to translate everything in near real-time so that all

information, regardless of the original language, can be analyzed and escalated as needed. In today’s digital world, content volume is massive and the growth of content is overwhelming. Web-based communications channels are numerous, expanding in number, and in continuous use around the world. Government organizations rely on innovation through advances in automated language translation to stay informed.

Hannah Grap, director of marketing at Language Weaver (founded in 2002), has addressed audiences in North America and Europe on the value of translating new types of content and providing more focus on multilingual communication. She is in charge of Language Weaver's international marketing initiatives and works with the company’s strategic partners. Her background is in marketing and technical communications and she previously worked in the financial services sector. Hannah holds a Master of Science degree in technical communications from the University of Washington.


How can government responsibly

procure free software?

by Mike Gifford

Free software is “free” in two senses: it is distributed free of charge, and can be freely used and shared because it is unencumbered by onerous and restrictive licences. This software model has been refined over the past twenty-five years, and its use has become mainstream.1

For example, in 2008, leading IT industry analyst Gartner Research announced that, “Eighty-five percent of companies are already using open source software, with most of the remaining 15 percent expecting to do so within the next year.” Amazon lists 90,000 books when searching for “open source,” and there are many more publications available electronically.2

In this age of the Internet and mature, enterprise-ready, open-source projects, commercial off-the-shelf software is an outdated concept. There is no longer a need for either the boxed software or the shelf it sat on. This article offers an introduction to this model [open source] of software development and distribution, and offers procurement professionals guidelines for approaching and understanding free and open-source tools. 1http://en.wikipedia.org/wiki/Free_software 2http://amazon.com/dp/0815733933

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What is free/open-source software? Free software is distinguished by its licensing and by its transparency; it can be freely distributed and modified because its source code is made available. In contrast to the opaque workings of proprietary software, free software is developed in public, and is freely available for inspection, evaluation, and modification. There are subtle licensing and philosophical differences between “free software” as defined and promoted by the Free Software Foundation (FSF) and the broad world of “open source” software. Our focus will be on free open source software (FOSS), but most of the points will also be relevant to open source software (OSS) as well. However there are many assessments of the value of FOSS products which clearly show that this is not the case. According to Ohloh.net, for example, the OpenOffice.org office suite would cost almost USD $150 million to develop from scratch, but it can downloaded for free, and offers a near drop-in replacement for Microsoft Office. In addition, it can then be distributed, modified, and improved just like other FOSS software.3 Given that the current economic challenges mean everyone is trying to do more with less, paying for a licence is often an unnecessary expense. And proprietary, closed-source software has far more costs than most government agencies realize. When you hire consultants to deploy and manage closed source products, there is no added value or opportunity to participate in a community of innovation. Investment in FOSS projects, on the other hand, benefits the entire sphere of FOSS users and developers. Open source tools free you from dependency on the sustainability, competence, and good will of third-party software vendors because there is a community of technical

expertise that can be mobilized, commercially, or not, to troubleshoot and improve FOSS systems. Open source software reduces up-front implementation costs by eliminating license fees, but more importantly it can help protect against single -vendor lock-in. Vendor lock-in is a problem because it increases the cost for the deliverables. Lock-in is also a problem in terms of future-proofing your data or applications. If a company is bought out, goes out of business, or simply discontinues a product line, you may not be able to get support for your software. Software producers benefit by lock-in because they have an effective monopoly on their customers; this means they have little or no incentive to make better products, or to make their products interact well with other tools. On a technical level, FOSS tools benefit from open, distributed, community-driven development. Many FOSS projects enjoy the attention of hundreds or thousands of developers, and tens or hundreds of thousands of engaged users. Such projects have demonstrated very rapid cycles of continuous quality improvement. Moreover, they are directly and actively responsive to the needs of their users. Many organizations have chosen to implement mature open source projects because they allow 3http://gnu.org

The “free” aspect of [open source software] has been seen as problematic, inasmuch as things that are free are often seen as being without value.


for the fast delivery of a well-tested product. In developing the Canadian Museum for Human Rights4 website within just six weeks, for instance, Mark Stephenson of RealDecoy5 said, “the Drupal6 framework really saved us a lot of time.” Despite its strong technical reputation and very widespread use, there remains a great deal of uncertainty about free software. Many of the concerns are unfounded, and based on limited knowledge of the FOSS community. For instance, the following are all true of FOSS software:

• there is a great deal of commercial support available;

• you have a wide choice of vendors (unlike many proprietary applications);

• it is almost always more secure than closed-source code and on par or better than proprietary software, because the user/developer community is constantly evaluating and improving it;

• industry has built and extended FOSS applications for real world enterprise environments; and

• active communities allow users to learn from each other and encourage innovation.

Government and FOSS: shared values Free software is presently being used by most if not all government departments. There is no central listing of software used by the Government of Canada. A short survey conduc-ted by OpenConcept7 revealed that nearly half of the 400+ government websites reviewed were using some form of open source software.8 FOSS is already being used extensively from the Canadian Revenue Agency (CRA) to the Canadian Space Agency (CSA). In many ways FOSS software is a natural match for government. Both software projects and government departments are mission-based and

depend on finding a cost-effective manner to deliver services. Government financing comes largely through its citizens and anything that is produced is ultimately there to benefit the community. Likewise software projects are responsible to their community of users. Deputy Chief Technology Officer for Canada, Jeff Braybrook, spoke in February about the Treasury Board’s adoption of MediaWiki for GCPedia. In his summary government and FOSS communities are natural allies as they share common values. Both communities: i) encourage participation and have a platform to perform, contribute and interact with others; ii) promote co-operation and collaboration which is critical for any successful federal government or open source project; and iii) depend upon and are improved by agreed upon standards that allow for innovation.9 To be innovative you need to encourage creativity, collaboration and provide inspiration for those working on common problems. Innovation is largely about combining old tools in new and creative ways. FOSS allows you to do this by not limiting how one can learn from and extend the tool and by encouraging the technology to be shared with others. Govern-mental use of FOSS tools thus provides a ready opportunity to both fulfil internal technical requirements while at the same time fostering and disseminating innovation.

FOSS procurement internationally Earlier this year in the UK, the IT in Government initiative of the Cabinet Office put forward a very progressive procurement 4http://humanrightsmuseum.ca 5http://www realdecoy.com 6http://drupal.org 7http://osbr.ca/ojs/index.php/osbr/issue/view/85 8http://openconcept.ca/blog/mgifford/canadian_government_uses_plenty_of_open_source_software 9http://openconcept.ca/node/2086


position. They called for more use of open source, open standards and re-use within government. They were looking for solutions that provided the best value for money and also encouraged share and re-use of what the taxpayer has already purchased. The initiative was designed to encourage innovation and this precedent will not only benefit governments within the UK, but also around the world.10 In the USA, the Department of Defense is a big advocate of this software model. Recently they launched Forge.mil, which is hosting the military’s open source projects. In their study, they determined that using open source projects increases flexibility, produces greater interoperability and reduces IT costs. The US National Defense Authorization Act “has explicitly articulated a preference for open source software.”11 There is a strong effort to even further entrench open source within the USA government, especially since the election of Barack Obama to the presidency. Large open source companies are banding together to lobby for change. Critical websites like Recovery.gov have been built using the Drupal CMS, and others are coming online using other open source tools.12

FOSS procurement in Canada It is a misconception that FOSS isn’t being used in the public sector in Canada. The Treasury Board’s Federated Architecture Program has quite a wealth of information on OSS. Though it was largely written in 2003-2005 and thus needs to be updated, it is nonetheless an example of a central department pursuing a path for OSS procurement within the Government of Canada.13

Industry Canada maintains an OSS Solutions and Support Providers page, and Public Works and Government Services Canada (PWGSC) has created a Software Acquisition Reference Centre (SARC) that has a section for OSS. Neither of these is an endorsement of the companies listed, but reflects a general need for government departments to know where to consider their options.14 PWGSC put forward an request for information (RFI) earlier this year in an attempt to get clarity on how the federal government should approach this issue. There should be a good summary from all of the input that was submitted, however, in my view the question was much too general. The RFI was for “Not for Charge Software,” which included both OSS and FOSS licences, but also careware, trialware, shareware and adware. This very broad set of licences has very little in common other than that there is no upfront financial cost. It should be stressed that openness and collaboration are distinctively characteristic of OSS and FOSS projects.

OSS procurement There are strong precedents for the use of FOSS, clear indications of value for total cost of ownership, and plenty of evidence that OSS can deliver enterprise-class results. But how does a procurement officer evaluate software in this new paradigm? In many cases the procurement officer may not have a software background so will not be able to technically compare two similar solutions. Having a richer understanding of the software industry will help, but there are a number of steps that can be taken to improve best practices. The following are some items to consider:

• Evaluate the size of the community of users and developers and look at relevant trends of comparable software (with so many options available, make sure you have a critical mass). Google allows you to do a simple comparison with the trends search.15

10http://cabinetoffice.gov.uk/government_it/open_source.aspx 11http://arstechnica.com/open-source/news/2009/02/department -of-defense-launches-open-source-site- forgemil.ars 12http://opensourceforamerica.org 13http://www.tbs-sct.gc.ca/fap-paf/ 14http://www.ic.gc.ca/eic/site/ict-tic nsf/eng/h_it07356.html 15http://google.ca/trends?q=drupal%2C+wordpress%2C+interwoven


• Check that there are users within your sector (it’s worth checking if there are any communities of government sites). Drupal’s founder Dries’ blog has a focus for government16 and there’s also two Drupal Groups available (for municipalites17 and national/provincial18 organizations).

• In evaluating software, ensure that you are aware of the niche areas that the software is written for (MediaWiki19 is a great wiki platform if you want to emulate Wikipedia).

• Most popular OSS projects are transparent about their processes for code review and also security eval-uations. It’s good to know what the release schedule is and also that there is an upgrade path available for users. All software needs to get upgraded at some point, so it’s best to have a plan.

• Is there a strong user community that is contributing back to the projects (either in bug reports, feature enhancements or even providing use cases)? Are there regular conferences, or even local meet-ups?

• Are there a number of companies who work with the software who you can engage if required? Local companies and large multi-nationals are all using OSS, so it is important to consider where you want your money to go.

• Is there a clear software licence under which you know what obligations there are for your work? If work is all developed under the same licence it will make it easier if questions around intellectual property issues do arise. Any software downloaded directly from Drupal.org is under the GPL free software license.20

• Particularly in Canada, it is useful to assess if there is language support in both official languages. With most software projects, the developer documentation is usually written in English, however it is critical that the user/admin components can be available in French as well.

• Software maturity is important for consideration. It is easy to start a software project, but much harder to sustain it and build a strong user base around it.

• Documentation is important issue to evaluate with any software. Both online and user documentation should be considered (With any reasonably large OSS project you’ll find that there are books are available).

• How user friendly is the product and how much training is required?

• Is there a clear definition of what needs the software is expected to fulfill? How well does the software being evaluated meet these requirements? The Commons Group has developed a software needs worksheet to help.21

Conclusions The software procurement landscape has become more complicated and it is critical that public sector managers be able to evaluate the richer set of options that are now available. Resources are available to help educate and guide staff in making informed decisions about the pros and cons associated with different choices. There are also a number of frameworks, like the one defined by the Commons Group above, which can be used to plot the needs of the organization to learn about how to make better 16http://buytaert net/tag/government 17http://groups.drupal.org/local-government 18http://groups.drupal.org/drupal-state-and-federal-agencies-government 19http://www.mediawiki.org/wiki/MediaWiki 20http://drupal.org/project 21http://commons.ca/articles/fulltext.shtml?x=335

The software procurement landscape has become more complicated and it is critical that public sector managers be able to evaluate the richer set of options that are now available.


use of software within your organization. Requirements gathering takes time and money to do properly, but it is much better than once again purchasing something that doesn’t meet the needs of users and that is incapable of being modified to do so.

Open source solutions offer robust performance and technical excellence, but perhaps more importantly, they offer independence and flexibility. And importantly for the public sector, money spent implementing FOSS projects is an investment in the common good because improvements and testing for one can be contributed to improve these tools for all.

Mike Gifford is the founder and president of OpenConcept Consulting Inc., a free software web development shop that has worked with several federal government departments including PWGSC, IC, CSPS and EC. OpenConcept has played a leading role with several free software projects since 2000 and are actively engaged in Ottawa’s Drupal community. In the last year, Mike has been spearheading the accessibility initiatives within Drupal 7 and hopes to see Drupal become the content management system of choice for government.


&

supported by IT

Ontario’s Halton Region makes serious IT investments

by Ralph Blauel As one of Canada’s fastest growing communities, Halton Region supports its citizens through a strong commitment to its strategic goals: managed growth, economic prosperity, services to people, and effective administration. Every day our employees deliver a diverse portfolio of regional programs and services to our citizens – from public works to

public health. To ensure fiscal accountability, efficiency and transparency to taxpayers, employees are always cognizant of ensuring operations and processes are as efficient as possible. That’s why Halton Region invests in technology. Like other public sector organizations, Halton


faces a variety of pressures ranging from regulatory compliance to providing innovative services at low cost to our citizens. It is critical that we optimize resources to simultaneously manage these issues and increase operational excellence, provide higher accountability more transparently and, ultimately, demonstrate expanded return on investment.

Readying for growth with ERP Back in 1995 Halton’s IT team took a hard look at the municipality’s technology platform and decided it was the right time to begin streamlining operations to mitigate the incremental cost of growth. We had a number of requirements. First, we wanted to implement an enterprise resource planning (ERP) system so we could improve our financial, human capital and operational processes. Secondly, only three of our 20 full-time IT employees had financial system skills, so we needed a solution that was easy to use and required little support. After an open competitive RFP process, it quickly became clear that SAP’s ERP solution was best suited to help us meet our current and future operational needs. This first municipal implementation in North America was completed on-time and on-budget and marked the beginning of our 14-year relationship with SAP. With an ERP system in place, authorized employees can readily use analytics, financials, human resources, procurement, plant, fleet and operations services across the organization, which increases productivity and improves cost control. More than 467,200 people currently live in Halton Region, Burlington, Halton Hills, Milton and Oakville. To support our anticipated growth and achieve economic prosperity in line with Ontario’s Places to Grow Act, our population must grow by 68 percent over the next 25 years. SAP offers us stable, transparent and robust controls, helping us maintain our AAA credit rating over the last 18 years. That, in turn, reduces the cost of capital for building our

municipal infrastructure and helps us keep taxes down for our citizens. Halton Region’s investment in an ERP system benefits other organizations as well. In 1998, Halton Police Services, the City of Burlington, and Halton Community Housing Corporation (HCHC) began using Halton’s SAP investment as well. By hosting their financial systems on our ERP, they didn’t have to acquire all of their own hardware, software or consulting services to create and support their own ERP systems. Instead, they use Halton Region’s IT and ERP expertise, with the City of Burlington, HCHC and Halton Region sharing the costs. The best news, though, is that it has saved the taxpayer $2 million in implementation costs – another way we can demonstrate accountability to our constituents.

Rolling out the fleet By 1998, Halton Region was maintaining a large fleet of police, ambulance, field trucks and related vehicles. Unfortunately, timely data for fleet performance was difficult to obtain from our existing processes. As the fleet size grew, our outdated legacy systems just couldn’t keep up. Our clerks and mechanics had to work longer hours just to keep up with the tedious, paper-intensive tasks, resulting in increased costs and some very tired employees. Without consolidated asset and maintenance data systems, managers couldn’t be sure they were working with current and reliable information. Information was often outdated or duplicated, and historical data for decision making was difficult to access and collate. After evaluating fleet-specific point solutions, we implemented fleet management functionality from SAP. It went live at the fleet’s two garages

[Halton] wanted to implement an enterprise resource planning (ERP) system so it could improve its financial, human capital and operational processes.


in early 1999, giving us much-needed real-time vehicle information that could be integrated with existing finance, supply chain, and HR processes – avoiding the need for costly point-solution interfaces. The fleet management system also met our future integration needs for bar code and data collection, mobile devices, and enterprise portal access over the Internet. Automated work orders have now replaced manual processes. The increased efficiency of the automated system has allowed us to increase our annual work order volume from 5,400 to 9,000 in just a few years. Authorized users requesting vehicle information now have it at their fingertips in an instant. Mechanic “wrench on bolt time” has increased up to 10 percent, minimizing non-productive activities such as searching for vehicle and part information.

Our fleet has doubled in size since 1998, but we have only had to hire three additional employees to meet the growth. That is more efficient use of our taxpayer’s dollars. The application’s relia -bility and scalability translates into trouble -free performance so we only require one in-house SAP business analyst, and ongoing IT support has been reduced to 15 percent of analyst time. Halton Region’s director of Asset Management, summed up the benefits like this: “Where the rubber meets the road is in our ability to provide safe and properly working vehicles to the municipalities we serve. And we are. The SAP functionality for fleet management is helping us meet that mission every day.”


Paving the path to asset reporting With success of the ERP and fleet management projects, Halton turned its attention to asset reporting. To enhance confidence in public sector reporting, the Public Sector Accounting Board (PSAB) now requires every municipality in Canada to account for and put a value on every road, sewer line, park facility and other assets, including the original capital cost of each asset and its amortized value based on the life of the asset. Compliance is mandatory. If assets aren’t clearly inventoried, our debt rating could be adversely affected. SAP Canada and Halton worked together to develop a solution that would help position our municipality for compliance with PSAB mandates. We ran a series of workshops to determine and refine our requirements and integrated Loki Innovations’ Real-Time Asset Value Analysis (RIVA ™) software and other third-party applications. SAP hired IDS Scheer Canada and Clockwork Inc. to configure and support project management services. We went live with the PSAB IT solution in 2008 – well before the mandated deadline. It has enhanced our ability to take accurate inventory of our infrastructure. We can calculate depreciation and track and record asset maintenance in real time. We’re able to track all 17 asset classes across the organization. We are saving $250,000 in internal accounting costs annually because we don’t need three accountants to do the work the solution automates. To boot, Halton Region is the first municipality in Canada to be able to achieve all this with an ERP solution. This year, Halton Region is working again with SAP to further refine our decision making

abilities and ensure greater accuracy of our data. With SAP BusinessObjects’ business intelligence, data transformation and reporting tools in place, we can quickly find any data irregularities so they can be addressed immediately. Information accuracy is increasing, and our employees have confidence in the decisions they make based on the information at their fingertips.

Lessons learned With 1,800 of Halton Region’s 2,000 employees using SAP in their daily work, we can confidently say that it’s been an effective and valuable partnership. SAP is one of the most stable vendors in our application portfolio. They are responsive to market sectors, including the municipal space, more so than some of other EPR vendors, and that’s one of the many reasons why we continue to invest in SAP. Many Canadian municipalities are sharing similar IT success stories, which is why it’s so important to reach out to them for advice. The community is incredibly open about sharing intellectual property and best practices. Municipalities will even share code at no cost because, quite frankly, we’re not in competition with each other like in the private sector. There’s probably a solution out there already, and likely the owner of that solution will want to share it with you at little or no cost. And don’t forget to contact to the Municipal Information Systems Association (MISA). You can each to out to the MISA membership whenever you have any questions. Talk to your counterparts often and learn from their experiences, because communication is the vehicle that opens doors – especially for those new to the municipal IT experience.

Ralph Blauel is the director of Information Technology for Halton Region in Ontario.


by Andrew Miller The recent news about how Ontario’s eHealth has conducted some of its procurement is disturbing to many. More than $15 million in consulting contracts were awarded without a competitive process. Those in the private sector are thinking, “What is the big deal? We do that all of the time.” However, public sector organizations, like eHealth, spend tax payers’ money and are subject to scrutiny that private companies cannot imagine. So even though, in the case of eHealth, we are talking about only $15 million in contracts for an organization that is responsible for a budget of over $700 million per year, it is a big deal.

This article will provide you with background information on what eHealth did and why, and what can be learned from the situation. Hope-fully the pointers offered for going forward will bring some comfort to those in the public sector that may be unsure of what they can and cannot do within the scope of public procurement. Before going any further, it is important to clear up some of the facts that many publications have forgotten about, chose to conveniently ignore, or

What can we

learn

from

Ontario’s eHealth

procurement process?


did not know about. I will discuss some of these in more detail later in the article:

• Government procurement policies allow for awarding of contracts without competition in specific circumstances and urgent need is one of those circumstances;

• The eHealth Board of Directors and its CEO inherited an organization that had spent more than $650 million over the previous 5 years with virtually nothing to show for it and had a reputation as an ineffective organization; and

• They brought on consultants with experience in implementing electronic health records and the rates that they paid are the going rates for top consultants in any field. They needed the best to get eHealth back on track.

A typical competitive process takes a minimum of 2-3 months, depending on the size and scope of the engagement. By going to competitive tender for every initiative, many smaller, easier to implement initiatives would be delayed by weeks if not months. It is for this reason that most procurement policies have a provision that allows an organization to engage services for urgent needs where it is in the public’s best interest to bypass the competit ive process. This, of course, only applies when companies being awarded the untendered contracts are compliant with identified requirements and the companies are qualified to do the work. These provisions usually have an approval process where backup documentation is required. In my view, the eHealth officials were well within the scope of their responsibilities to exercise these provisions to begin work quickly on their mandate of implementing electronic health records quickly and properly. I don’t think anyone can argue against the fact that eHealth needed to make some successful strides quickly, and were given a mandate to do so. The executives at eHealth were trying to make up for

the ineffectiveness of eHealth’s predecessor organization, the Smart Systems for Health Agency (SSHA), by moving forward with conviction and strategic direction. It will be interesting to see how (and if) eHealth can recover from this period of bad publicity resulting from scrutiny of some of its procurement practices and continue its mandate of reducing wait times and moving to electronic patient records. I will not disagree that some of the procurement guidelines were relaxed in some of the decisions made by eHealth and that generally, a com-petitive tendering process provides the best benefit for the buying organization. Competitive tendering processes will certainly make the environment more transparent; it is, however, much more time-consuming and labour intensive. Unfortunately, the actions of the organization has caused the public to shift their focus from the objective of eHealth and ways to make the eHealth organization more effective to the “$1.65 coffee and doughnut.” So what could eHealth have done to avoid this situation? Here are three things eHealth officials could have done:

1. Ensured that there was backup documentation to justify why they were single sourcing from these consulting companies. This would include the level of experience, any unique expertise and the specific value that these companies have, their ability to implement more quickly than others as well as the impact of having to wait to make a decision as compared to starting immediately;

2. Been more transparent and formal about what the consultants were being hired to do. This would have required more specific documentation on scope of responsibilities, accountabilities, desired outcomes, etc.; and

3. Spent more time ensuring support from the various stakeholders, including the


Ontario Ministry of Health and Long-Term Care. This would have raised any issues earlier in the process and possibly avoided the controversy that ensued. It certainly would have helped to avoid the finger-pointing and blame game that is going on now.

What can we learn from this controversy?

• Be transparent in your decision-making and know the policies that you need to follow. This is applicable for any organization, but especially important for organizations funded by the public sector.

• Have backup documentation for all decisions that you make in case they are disputed. This means that you should always assume that you are going to need to justify the decision to someone, so be prepared.

• Know the environment that you are in and adjust to it. Make sure your primary stakeholders are on board and be aware of the public perception of what your organization is doing.

Moving forward, the eHealth situation has brought the subject of public procurement to the forefront of people’s minds. Unfortunately, it is

not something that a lot of people know about ... they just read the bad press and come to think of it as yet another scandal … yet more bad management and waste by ineffective govern-ments. Public sector procurement staff are so scrutinized and so quickly condemned for their actions that consequently it could soon become difficult to attract people into these positions. After all why should we expect people to choose to work in an environment where they are often publicly berated and blamed for everything, and often without the full facts being known or understood? There is a balance to everything. I think that Ontario’s eHealth situation has shown that we are sometimes too quick to react before finding out the facts. That does not bode well for the eHealth organization, which has already spent too much money and is too far behind schedule. The key point is to remember that any buying decision made in the public sector will need to be justified to someone. As long as you have a defensible position and the appropriate docu-mentation, you will be able justify the decision that was made and how it was made.

Reprinted with permission. © Andrew Miller Andrew Miller is president of ACM Consulting Inc (www.acmconsulting.ca). For more than a decade, Andrew has been providing valuable operational and procurement advice to companies of all sizes around the globe, with a focus on bottom line results. Sometimes referred to as the Procurement Guru™, Andrew has been featured in Canadian newspapers and magazines and in several books. Andrew has an International MBA with majors in Logistics and Marketing from the Schulich School of Business in Toronto. He is an active speaker and writer and can be reached at [email protected].


A house

divided by Steve Bauld and Kevin McGuinness

Municipalities are a kind of corporation. It is therefore interesting to compare the responsibilities imposed upon the directors and officers of a business corporation with those that are imposed upon the city council and staff of a municipality. In the case of the former, subsection 134(1) of the Ontario Business Corporations Act provides that every director and officer of a corporation in exercising his or her powers and discharging his or her duties to the corporation shall,

(a) act honestly and in good faith with a view to the best interests of the corporation; and

(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

This, we would submit, is the same standard as should guide both councillors and municipal staff. They are there to represent and to further the interests of the municipality as a collective entity. They are not there to represent or assist local business, local workers, the ward or other

bailiwick by which they were elected or in which they reside, or any other person or entity, or the special interest group or cause of the moment, save and except that they may do so in a manner consistent with these fundamental duties to the municipal corporation for which they serve. It is particularly critical that the exclusivity of staff and council responsibilities be made both express and manifest in relation to the purchasing function. While the directors and officers of a corporation cannot ignore the legal rights of the persons with whom a business corporation deals, the law is quite clear that when the foregoing duties are said to be owed to the “corporation” by that is meant the shareholders of the corporation from time to time. Thus, in the case of a business cor-poration, there is an undivided duty of loyalty to the corporation, and a clear identification of the corporation with a specific set of stakeholders. Nevertheless, no comparable certainty of purpose exists in the case of a municipal corporation. Ontario’s Municipal Act contains no analogue to subsection 134(1). Instead of directing the council and staff to further one clear purpose, such as the best interests of the municipality, they are variously directed “to be responsible and accountable governments,” and “to enhance the municipality’s ability to respond to municipal issues.” Section 244 of the Act directs the council,

(a) to represent the public and to consider the well-being and interests of the municipality;


(b) to develop and evaluate the policies and programs of the municipality;

(c) to determine which services the municipality provides;

(d) to ensure that administrative policies, practices and procedures and controllership policies, practices and procedures are in place to implement the decisions of council;

(d.1) to ensure the accountability and transparency of the operations of the municipality, including the activities of the senior management of the municipality;

(e) to maintain the financial integrity of the municipality; and

(f) to carry out the duties of council under this or any other Act.

Such diverse responsibilities raise the question of whether the public, whose well-being and interests are required to be represented under clause (a) constitute a separate line of responsibility from the “policies and programs” that council are directed to develop and evaluate under clause (b), the services that they are to provide under clause (c) and so forth. In a business corporation, the very business that the corporation conducts is incidental to the underlying obligation of furthering the best interests of the corporation – that is of its shareholders. The business is a means to an end. Taking Section 244 at face value, in the case of a municipal corporation, both the governance structure – under clauses (d), (d.1) and (e) – and the programs and services that the municipality provides, each seem to be autonomous areas of concern, distinct in some way from the public.

The interests of the public are not paramount; they are merely to be considered. Even the public itself is an ambiguous entity. In various parts of the Act, the municipality is identified not only with the “public,” but with its electors, its residents or inhabitants, and its ratepayers. Moreover, whereas the staff of a business corporation are ultimately accountable to the same shareholders as the directors, the staff of a municipality are directed by section 277 of the Municipal Act to act in a supporting capacity to the municipal council – as if the council on the one hand had some identity or interest separate and apart from the municipality on the other. The divided loyalty imposed by the Municipal Act itself on municipal corporations permeates every aspect of municipal operations. At many municipalities, this divided loyalty is further complicated by municipal bylaws, which add even more subject areas with which staff must be concerned. It is not difficult to see how such confusion came about. Section 271(1)(b) of the Municipal Act, 2001 (now repealed) required a municipal procurement policy to specify the goals to be achieved by using each type of procurement process. The wording of some municipal by-laws in itself often suggests some confusion on the part of council as to whether the municipality is there for the advancement of the interests of its residents or its suppliers. For instance, one Ontario region sets out 12 purposes, goals and objectives that are to underlie the execution of the purchasing function for that region. The bias in the list of such purposes towards being fair to suppliers (as opposed to driving a hard deal for the benefit of taxpayers) is self-evident.


“The purposes, goals and objectives of this By-law and of each of the methods of Purchasing authorized herein are:

a) to encourage competitive bidding; b) to ensure objectivity and integrity in the

Purchasing process; c) to ensure fairness between bidders; d) to maximize savings for taxpayers; e) to offer a variety of Purchasing methods,

and to use the most appropriate method depending on the particular circumstances of the acquisition;

f) to the extent possible, to ensure openness, accountability and transparency while protecting the best interests of the Corporation and the taxpayers of the Regional Municipality of Niagara;

g) to obtain the best value for the Corporation when procuring Goods and Services.”

In a sense, this is shocking – for it is contrary to virtually every principle of corporate governance for the staff of a corporate entity to be told to place more or the same emphasis on defending the rights of others as they are told to place on defending the rights and interests of their employers. Bylaws that put the interests of suppliers on a par with or ahead of the interests of the municipality appear to be inconsistent with sections 2 and 8 of the Municipal Act, which indicate that the purpose of municipal purchasing policies and procedures is, or ought to be, to get the best deal possible for the municipality, taking into account the need to formalize purchasing procedures in order to mitigate the risk of employee misconduct.


They also fly in the face of commercial common sense. In buying goods and services, a municipality is simply a consumer. Our entire economic system is based upon the notion of autonomous traders and customers, each carrying on business with a view towards his or her own best interest. Essentially, for everyone else than a supplier to the public sector, a trader, consultant, builder or other supplier of goods and services is entitled to no better treatment from its customers than its market strength allows it to exact. Not so with the supplier to a municipality; staff are instructed not to try to drive the price down, but rather “to encourage competitive bidding; … to ensure objectivity and integrity in the purchasing process; [and] … to ensure fairness between bidders.” Only when these steps have been taken, is any thought to be given to the taxpayer. Nevertheless, one can hardly blame a municipal council that becomes confused as to the direction to take when identifying the duties of municipal staff. If one reads through the hundreds of judicial decisions that have been handed down in recent years with respect to the subject of municipal procurement, it is rare to find a case in which the idea of putting the municipality (or other public authority) first is even mentioned. On the other hand, it is possible to find quite a bit of case law in which the idea is implicitly

rejected, in order to give precedence to the needs or interests of suppliers. The problem is that a provision such as the one set out above simply reinforces that attitude. By placing so much emphasis on supplier interest in its own purchasing bylaw, the municipality reinforces the approach that the courts have taken. Thus, when litigation arises in relation to some aspect of procurement, any court that looks at the municipality’s own purchasing bylaw will see clear direction given, not only to take supplier interests into account, but (if the ordering of the section is intended to give any direction) to place fairness to suppliers ahead of the interests of taxpayers. Such over-emphasis on supplier interests entrenches a division of loyalty as a matter of law. Instead of being directed to put the interests of the municipality first, the municipal staff are being directed to make sure that its suppliers are fairly treated. A house divided, so the Bible tells us, cannot stand. Maybe it is time for municipal councils to take a good hard look at their purchasing by-laws to see whether they are diverting staff from best serving the interest of the municipality as a corporate entity.

Steve Bauld spent many years as purchasing manager at the City of Hamilton and served recently as vice president of the Ontario General Contractors Association. Kevin McGuinness is a lawyer with Ontario’s Attorney General. Together they have collaborated on several books about procurement and leadership, and will have a new edition of the Municipal Procurement Handbook released this fall. They are regular contributors to Summit magazine.

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