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  



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     -

     *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.


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