Introduction to SAAQclic and LGS’s Involvement
The Société de l’assurance automobile du Québec (SAAQ) embarked on an ambitious digital transformation initiative known as SAAQclic. This project involves a substantial $458 million contract awarded to the firm LGS, part of a collaboration that includes IBM and SAP. However, shifting dynamics have raised significant concerns regarding the risks that LGS faces throughout this venture.
Insights from Former LGS Executive Michel Dumas
Recently, Michel Dumas, a former vice-president at LGS, provided testimony before the Gallant Commission, shedding light on the internal and external challenges faced by the firm since he assumed his role in early 2019. Dumas noted that upon his arrival, he immediately recognized the deteriorating relationship between SAAQ and its suppliers. These tensions have been exacerbated by delays in SAAQ’s plans to initiate key phases of the project, particularly the critical “delivery 2” that encompasses the SAAQclic platform.
Identifying Major Risks
Dumas articulated that LGS was operating under “significant risks” as they had limited control over the project’s trajectory. He emphasized the reality that, despite being a primary contractor, LGS had to seek SAAQ’s approval for every step of the development process. This lack of autonomy placed enormous pressure on LGS, as they were responsible for all associated risks, while the client retained decision-making authority over resources and project direction.
Unpacking the Scale of the Project
According to Dumas, the scale of the SAAQclic project was staggering. He contrasted it with a previous digitization initiative he was involved with at the CNESST, which ultimately failed. Dumas remarked, “It’s large, it’s enormous,” illustrating the overwhelming magnitude of the task at hand. The complexity of developing a platform that meets the needs of a sprawling public sector organization brought forth numerous challenges that compounded the inherent risks.
Consequences of Failed Relationships
The deteriorating relationship between SAAQ and its suppliers has resulted in crucial delays and setbacks. Dumas pointed out that the initial optimism surrounding the partnership waned as both sides struggled to synchronize their efforts. The inability to progress led them to mediation, highlighting the fallout from poor communication and misaligned expectations. Ultimately, this mediation resulted in a revised agreement in September 2020, which saw several components of the original project scale back or modified.
The Lessons Learned for Future Contracts
Dumas’s experience serves as a cautionary tale for future digital transformation contracts. The reliance on client approval for each step can stifle progress and innovation. It underscores the necessity for establishing clear terms and a mutual understanding of responsibilities to mitigate risks. In light of these developments, companies entering contracts of substantial scale must thoroughly assess potential pitfalls and devise strategies to counteract them.
Conclusion
The challenges faced by LGS in the SAAQclic project illustrate the complexities of modern digital transformations within the public sector. As outlined by Michel Dumas, significant risks can arise when firms lack control over critical aspects of the projects they undertake. The lessons learned from this initiative could guide future engagements, ensuring that companies are better equipped to manage risks while fostering healthier relationships with clients.
