What is Phoenix

Ju Hong Kim · February 17, 2019

phoenix

Disclaimer: I do not claim to be an expert in any of the topics discussed below. Furthermore, I do not formally cite my sources but I will provide my list of sources below. I do not speak on behalf the Government, any companies mentioned in below nor as an employee of any organization that will be mentioned below. I simply am interested in the topic and decided to write a report to further learn about the issue. There will be parts of the blog that will resemble the Auditor General’s work. I am merely restating the Auditor General’s report along with any additional information I came across. The plan is to write a commentary at the end on my criticism of the project from both a software and political perspective.

What is Phoenix?

Phoenix is a payroll processing system for Canadian Federal Employees. Since its release in early 2016, it has been criticized due to the massive accounting problems. Federal workers have been reported to be underpaid, overpaid, or not paid at all that could last from weeks to months. As you can imagine, this has led to many protests and finger pointing. Those affected went through a difficult financial period and in some cases led to people selling their homes or defaulting their mortgages.

In 2009, the Federal Government wanted to replace its 40 years old Payroll System to a more modern, centralized, and automated pay system as a way to reduce costs. The old Payroll system was decentralized in that each department had agency had their own payroll system for its employees and required specialists who processed pay, advise employees and corrected errors (Auditor General 2017)[1]. This would mean there would be a need for a large labour requirements in the system and the need for each department/agency to maintain the payroll system in which was seen an area where the new system can improve. There were about 2000 payroll advisors across the 101 Federal Department and Agencies before Phoenix was introduced.

The old 40-year-old system had many manual processes, which were completed by pay advisors. One can see why the Government saw an opportunity to improve the system. Not only was there a need for each department needing its own payroll advisor, but the job was also quite manual (at least according to the reports). Automation could lead to further cuts in the number of payroll advisors needed and hence save money from human “labor” costs. PeopleSoft Commercial Pay System by Oracle was chosen to replace the old pay system by the decision of the Government I assume. The company chosen to customize the software was IBM, the only contender to replace the payroll system [2]. This is where it irks me. I am not downplaying IBM’s ability to deliver a working software but the spirit of competition and innovation is not seen in this project. This is not at the fault of IBM since they were just a bidder that happened to be the only company willing to offer its services (or at least were the only company that provided a feasible proposal). Big Blue IBM is not the sole reason for the failure of Phoenix nor does it have much responsibility for the failure as some may think they do. IBM has a big history of innovation and expertise in providing products and services to Businesses and to Governments. IBM has played a big role in our world and in wide fields of subjects (and they can make mistakes, that’s part of becoming successful. See my next blog to see why IBM is not responsible for the failure of Phoenix). Back to the subject, it is in my own opinion that the Government should have advertised the project and try to lure companies across the country and outside of the country more to avoid having a sole bidder be awarded the contract. When there is no competition, there is less initiative by both the buyer and bidder to provide their best to the project. I want to stress that I am not claiming that IBM did not take the project seriously. I am just stating that this is a trend that I see in a weak market. The more competition there is, the better it is for the consumer (the Government and its employees in this case) since there is a need to provide a better proposal, cost, and expertise to the table.

IBM was contracted to “design, implement, integrate, customize, and deploy Phoenix”. The launch of Phoenix was split into two waves:

First Wave: 34 Departments and Agencies will start using Phoenix in February 2016
Second Wave: additional 67 Departments and Agencies will use Phoenix in April 2016

The implementation of Phoenix was very complex as one would imagine since the system needed to be customized to handle the payroll of 101 departments of the Federal Government.

There were more than 80,000 pay rules that needed to be programmed into Phoenix. This is because there are more than 105 collective agreements with federal public service unions, as well as other employment contracts. In addition, many departments and agencies have their own human resource systems to manage employees’ permanent files that include basic information such as address, job classification, rate of pay, and types of benefits. Phoenix needs some of this information to accurately process pay, so the 34 human resource systems across the Government of Canada needed an interface to share information with Phoenix. As a result, to handle these pay rules and interfaces with human resource systems, Public Services and Procurement Canada added more than 200 custom-built programs to Phoenix. [1]

Expectation: “once Phoenix was implemented, the 460 pay advisors in the Miramichi Pay Centre would be able to do the work of the previous 1,200 pay advisors in the 46 departments and agencies that became clients of the Pay Centre.” [1]

The responsibility for the Transformation of pay Administration Initiative was given to Public Services and Procurement Canada since it is their job to provide services to the Federal Government by selecting a bidder and oversee the project to be completed (See Appendix 1 for more details on their responsibility).

The two goals of the initiative were:

Centralize pay for 46 departments and agencies (employs about 70% of all Federal Employees)
Replace the 40-year old pay system used by 101 Departments and Agencies

However, the project was a complete failure. The government have decided to release a defective product to the public and should be considered one of the worst procurement project in Canadian History and is definitely the worst Software Procurement System in Canada.

See the next blog on the Problem with Phoenix: Disturbing Facts about Phoenix: Implementation Part 1

Appendix

“1.8 Public Services and Procurement Canada. Public Services and Procurement Canada is responsible for developing, operating, and maintaining Phoenix and communicating instructions to Phoenix users. Public Services and Procurement Canada is also responsible for administering the pay of public service employees. Its responsibility for the 46 departments whose pay services were centralized at the Miramichi Pay Centre includes the direct input of information into Phoenix to initiate, change, or terminate pay for employees, based on requests and information received from the departments. This input is done by the Miramichi pay advisors. The other 55 departments are responsible for modifying pay information in Phoenix for their employees.” – http://www.oag-bvg.gc.ca/internet/English/parl_oag_201711_01_e_42666.html

Sources:

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