SUPPORTS ITEM NO. 5 CS&B COMMITTEE AGENDA JULY 25, 1996 ADMINISTRATIVE REPORT Date: July 8, 1996 TO: Standing Committee on City Services and Budgets FROM: The Corporate Management Team SUBJECT: Reorganization of the Information Technology Function RECOMMENDATION A. THAT Council approve the reorganization of the Information Technology function by creating a new department within the Corporate Services Group comprised of the present Information Services operation and the Telecommunications section of Engineering, including responsibility over and for the underground communication plant and the tele-communications equipment but excluding the Radio Shop operations, as further described in the body of this report. B. THAT Council approve the establishment of a new position to head up the Information Technology department and the abolishment of the Manager of Information Services position, which is presently vacant. Further that the General Manager of Human Resource Services be requested to classify the new position, provisionally titled "Director of Information Technology", in the normal manner. The estimated annual incremental cost of $20,000 related to this classification will be funded from the Corporate Services' operating budget. C. THAT Council instruct staff to engage the services of an outside personnel agency to assist with the nation-wide recruitment of a Director of Information Technology with funds provided from the Corporate Services' operating budget. D. THAT all staff affected by this reorganization retain their existing positions and salary levels in the new organization at start up, subject to a full position review and classification assessment at a later date to reflect the City's changing work and job requirements. Additionally, a thorough and comprehensive training program will be provided to assist staff with the transition into new job duties and responsibilities resulting from the reorganiza-tion; and FURTHER THAT a plan be developed by the General Manager of Engineering Services in order to provide for an orderly and smooth transition of the tele-communications services to the Information Techno-logy department in an appropriate time frame. E. THAT staff be instructed to report back to Council from time to time on staffing issues concerning the new Information Technology department in order to bring the level of its services to full functional capacity to adequately respond to workload consider-ations connected with the City's Better City Govern-ment and Customer Service initiatives. COUNCIL POLICY On June 19, 1990, Council established "information" as one of the City's corporate priorities. On December 8, 1994, Council approved an Information Systems Plan for City operations in order to provide the technical and financial basis for the development and implementation of information systems and technology to achieve change, reduce costs, and enhance services. Council is the approval body for major corporate reorganiza-tions. PURPOSE The purpose of this report is to introduce and present the findings of a consultant study (Teleconsult)* on the reorganization of the information technology function within the City's corporate organization. The report recommendations set out the game plan for accomplishing the reorganization in the least disruptive manner to staff and services and are presented to Council for approval. BACKGROUND On September 28, 1995, Council approved a report which dealt with the engagement of consultant services for the Emergency Operations and Communications Centre (the "EOCC"). Besides dealing with the consultant services directly related to the proposed operations of the EOCC, the report also identified two ------------------------------------------------------------- - *Report on file in City Clerk's Office. related projects around basic technology and organizational issues that, to a large extent, are driven by rapid changes in communications technology and the innovative development of user-friendly business applications. Council was told that the consulting work on the two projects described below would be advanced under the City's Better City Government initiative and funded from those sources. - Broadband Communications Infrastructure Computing technology, digital telephone technology, voice processing, video services, remote monitoring, and radio communications are converging to a digital technology. A single broadband network is required to support high speed, volume transfer of information. This study will provide a business and technology plan for the development of this network. The technology plan will define the logical and physical architecture, and a migration plan. The business plan will set out the implementation particulars. The City has an existing underground communications plant which could, with continuing investment, provide the core of a City system to meet its needs, and perhaps provide services to others. Alternatively, the city could seek a working relationship with a commercial provider to obtain access to services in exchange for access to the City's rights of way and communications ducts. The consultant will report on policy considerations around the City's broadband communication needs and direction, including the most appropriate strategy to secure private partnerships to accomplish operating goals. This report will be before Council by the end of July. - Telecommunications Organizational Review The responsibility for computer and communications services is spread throughout the City and in some cases is provided by vendors. This type of organization is not able to deal effectively with the converging computer and communications technologies. This study looked at a number of organizational models for delivery of computer technology and telecommunica-tions services and support to the City's reengineering and process improvement processes. Models considered ranged from contracting services to reorganization and staffing changes. The consultant has completed this study and submitted its report on the findings and recommendations around a reorganiza-tion of the information and telecommunication services in the City. This report is on file with the City Clerk's Office. The balance of this present report discusses the recommended organization model, immediate staffing concerns and implementa-tion. DISCUSSION The consultant (Teleconsult) commenced its Telecommunications Organizational Review study late in 1995 with the help and guidance of a project Steering Committee and a Working Committee both comprised of senior City staff. The first phases of the study involved an examination of the City's existing information policies and direction documents (the Information System Plan, the Telecommunications Strategic Plan, the Technology Infrastructure Plan, etc.). The study then launched into a series of interviews with senior and middle level managers, and technical and operational staff across all city departments and outside boards. Problems were identified and perceived solutions were sought, strengths and weaknesses of the existing organization became apparent. The result was a game plan around strategic operational choices and organiza-tion recommendations which was presented to the Corporate Management Team for consideration and comment. The consultant's key recommendations resulting from the study are identified below, including the comments (in italics) of the CMT. We note for Council that the consultant's final report reflects the comments received from the CMT. 1. The effective application of information technology is critical to achieving city-wide and departmental strategic objectives. Agreed. 2. Common and coordinated planning of information technology initiatives is both necessary and desirable. Agreed. 3. Development of policies, integrated plans, standards and controls for information technology will be most success-ful if done through a combined effort of line departments and information technology staff. Agreed but may require some centralized control/guidance for corporate policy. 4. Total outsourcing of the information technology function is not the best direction for the City at this time. Agreed but may be desirable to outsource leadership of new technology projects where there is a high technology transfer from consultants to City staff. 5. Moving to a completely centralized information technology organization within the City is not a feasible direction at this time, given the culture and operating style of the City's organization. Agreed. 6. It is important for the networked aspects of the organization to function well - for cross-functional working groups and committees to be responsible for delivering high quality results. Agreed but the right people must be appointed, their responsibilities made clear, and perfor-mance evaluated on results. 7. The telecommunications functions currently in the Engineering department be merged with the network functions in Information Services in a more broadly defined Information Technology department. Agreed with a transition plan from the General Manager of Engineering Services. 8. The Information Technology department be headed by a General Manager with the responsibilities of a Chief Information Officer. Agreed to the CIO responsibilities, but instead of creating another major service department and its required administration, CMT proposes that the position be established at the Director level within the Corporate Services Group reporting administratively to the General Manager of Corporate Services. 9. The General Manager of the Information Technology department be a member of the Corporate Management Team. Agreed that the Director of Information Technology will be included in CMT discussions of strategic and tactical planning issues with a bearing on information technology. 10. The Corporate Management Team assume a role in the governance of the information technology function. Agreed to the following: - deciding the role of information technology in the corporate strategy; - choosing how to best organize information technology resources; - setting key priorities for information technology relating to corporate and depart-mental objectives; - allocating resources across the information technology function; - ensuring information technology management processes are active; and, - holding departments and projects accountable for delivering benefits. 11. Two permanent working groups to manage the integrated operating plans for Business Systems and Technical Architecture be established - to develop and maintain plans, standards, and deal constructively with exceptions. Agreed in principle but recognizing the challenge of incorporating these activities into the business fabric of the organization. 12. The make up of the two permanent working groups be limited to six members, invited because of their ability to con-tribute based on a knowledge of information technology and to deliver results as members of cross-functional teams. Agreed. NEW ORGANIZATION STRUCTURE The consultant has recommended that the City implement an Information Technology organization reflecting the division of functional responsibilities and duties as noted in Chart 1 of the report Appendix. The organization would be in the form of a department reporting to the General Manager of Corporate Services on administrative matters and to the Corporate Manage-ment Team and City Council on strategic and tactical issues. The department would be organized around five divisions having the functional responsibilities noted in Chart 2 of the report Appendix. The staffing of the new Information Technology department would comprise all of the current Information Services operation in Corporate Services and the Telecommunications staff group in Engineering. Staff would be moved into the new department at their existing positions and salary levels at start up, subject to a full position review and classification assessment at a later date to reflect the City's changing work and job require-ments (approximately six months down the road). Additionally, a thorough and comprehensive training program will be provided to assist staff with the transition into new job duties and responsibilities resulting from the reorganization. Additional staffing requirements would be reported to Council as appro-priate but not before the new department has completely absorbed the staff transition process and staffing needs have been assessed alongside of corporate information and technology requirements still in the strategic development process. At this point, however, there are no identifiable additional costs or incremental savings connected with the reorganization, except for the costs noted below. MANAGEMENT POSITIONS The present position of Manager of Information Services, which is currently vacant, reflects a salary level at a division head level with corresponding duties and responsibilities. We recom-mend that this position be abolished and a new position and classification be established at a department head level, provisionally titled "Director of Information Technology". The consultant has identified four vital priorities for the Director of Information Technology, as follows: - orchestrate the networked I/T organization without owning; - lead in finding, selecting and implementing informa-tion technology to support the better city govern-ment and public service initiatives; - structure and manage strategic alliances to the benefit of the city; and, - manage the I/T function to: - share corporate I/T resources effectively. - provide professional I/T career management city-wide. - deliver overall organizational learning relat-ing to the efficient and effective application of information services and technology. The duties and responsibilities assigned to this new position would accordingly reflect a Chief Information Officer perspec-tive and attract a corresponding salary level. A preliminary market survey of equivalent positions in both the public and private sectors indicates that a salary increase of approxi-mately $20,000 per annum over that budgeted for the Manager of Information Services will be required. This increased cost will be absorbed by the Corporate Services' operating budget. Once the salary level and classification for the Director of Information Technology have been established, staff recommend immediate recruitment be conducted nation-wide through an outside personnel agency with internal assistance, again with funds provided from the Corporate Services' operating budget. The five functional division head positions of the new department will also require appropriate classifications and, most likely, salary adjustments as well. We recommend that the classification process be conducted in parallel with the recruitment process for the new Director. New positions will be created and the costs of those positions will be funded from existing sources and the abolishment of the present branch head positions. Staff will report back to Council requesting approval of the new positions after the appropriate classifica-tions are established. There may also be some additional costs connected with recruiting these positions if suitable internal applicants are not available. Ideally, it would be preferable to have the new Director on board before any division heads are appointed, but this may not be possible given the long time it usually takes to fill senior manager vacancies. In any event, the Corporate Management Team believes that recruitment for the Director of Information Technology is an immediate priority in the reorganization process. INFORMATION TECHNOLOGY GOVERNANCE FRAMEWORK As mentioned earlier, the consultant has recommended that the Corporate Management Team assume an active role in the governance of the information technology function. Besides the CMT, the consultant has recommended the establishment of two permanent working groups to manage the integrated operating plans for the City's business systems and technical architec-ture. Charts 3 to 7 of the report Appendix show the reporting relationships that are proposed to support a federated approach to a networked information technology environment, along with the major activities that each group would be assigned. In order to address the four vital priorities mentioned above, the Director of Information Technology would participate as a member of both the Business Systems and Technical Architecture working groups and be a direct liaison to the Corporate Manage-ment Team on strategic and tactical planning issues dealing with the application of information technology in City opera-tions and communications services. This co-operative governance structure is linked to several corporate objectives, as follows: - elevate I/T planning to a city-wide perspective and beyond; - make I/T decisions with solid, commercially based business cases; - get city-wide data architecture work done; - front-end major development projects with business process re-engineering activities; - establish and maintain linkages with other jurisdic-tions, for example: - GIS community, - Communications providers and users, - Electronic Data Interchange and other net- working partners; and, - invest in building the knowledge and experience base in-house around the application of information tech-nology to improve operations generally. CONCLUSION Teleconsult has reported out on the Telecommunications Organizational Review project with recommendations on a new organization structure for the City's information and techno-logy services. The Corporate Management Team has reviewed the consultant's report and supports most of the recommendations without modification, but has suggested several changes to the reporting structure and a title change for the head of the new department as noted above. The recommendations of this report set out a strategy for the transition out of the existing organization structure and a move into the new structure in the least disruptive manner. The Corporate Management Team fully supports approval of those recommendations. Copies of this report have been forwarded to CUPE Local 15 and IBEW Local 258 for information. * * * * *