INF30029 - Evaluating the Failure of Canadian Phoenix Payroll System

This report examines the failure of the Canadian Phoenix Payroll System, a government initiative intended to modernize federal employee compensation. Initiated in 2009 and launched in 2016, the project aimed to replace a 40-year-old system with a centralized, automated online platform, promising cost savings and efficiency. However, the implementation faced significant challenges, including non-payments, overpayments, and various errors, ultimately leading to its designation as an IT failure. The analysis identifies key factors contributing to the failure, such as inadequate risk planning, insufficient software testing, and mismanagement of the project. The report delves into the lack of proper oversight by Public Services and Procurement Canada, highlighting failures in leadership and departmental coordination. It further explores the impact of basic errors, such as the inability to handle retroactive payments, which were dismissed as minor issues during the initial rollout. The report concludes with recommendations for future IT projects, emphasizing the importance of thorough planning, internal auditing, and effective leadership to mitigate risks and ensure successful implementation. This case study serves as a valuable lesson in the complexities of large-scale IT projects and the critical role of proper management and oversight.

Running head: IT PROJECT MANAGEMENT
Information Technology Project Management
Topic: Failure of the Canadian Phoenix Payroll System in 2016
Name of the Student
Name of the University
Author Note

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Executive Summary
The Canadian Phoenix Payroll System developed by the government was also an
incomprehensible failure that took place in 2016. The Phoenix pay system was planned in
2009 as an original idea by the public works for replacing the 40 year old pay system of the
traditional way in which federal government used to deliver the compensation to the
employees. The reasons due to which the Phoenix project failed were also due to the
misinterpretation or no planning of the risk factors. In addition to that the entire software was
not at all tested before implementing them to a particular system. This should have been done
since the entire project was at such a large scale and even it was handled by the government
of Canada. Thus, the entire analysis below ensures how project should be taken on especially
when they are related to Information Technology regarding the planning phase before getting
on to the implementation altogether.

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Table of Contents
Introduction................................................................................................................................3
Background of the company..................................................................................................3
The project case of failure of Canadian Phoenix payroll system...........................................4
Identification, discussion, and justification of the criteria to measure the chosen project.....5
Analysis of the case based on the criteria identified..............................................................6
Recommendations......................................................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
Project planning ensures huge number of elements working behind the success of the
project. These elements and aspects work together to make the project success. Nevertheless,
if it is found that all of these elements are not working together under any circumstances or
due to any cause, the projects can also be declared as a debacle. Every year governments in
various countries take up numerous different IT projects and plan the entire project for the
sole purpose of obtaining success (Anthopoulos et al. 2016). Some are extremely successful
but there are some IT projects that do not see the face of success and are considered as
failures due to various problems they face during the planning phase. The following report
would analyse and justify why this IT project has been issued failure, what were the reasons
behind it and how the problems could have been avoided to make the project a huge success,
rather than a failure.
Identification of the project
There have been many successful project as well as unsuccessful ones when it comes
to the Information Technology projects. There are various constraints under which the
organization of Public Services and Procurement of Canada and its failed IT payroll system
for which it was identified as a feasible project because of the unanimity about it. It is for this
reason that it is available for information online given its huge failure.
Discussion about the Project
The Phoenix pay system is considered to be a system developed by the Canadian
federal government as a payroll processing system for the government employees working
under the registration of Canada and is essentially done by the Public Services and

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Procurement of Canada. It had become online for the first time with the idea of implementing
the entire payroll system over the internet and it was conducted online as well in the year
2016 (Lientz and Rea 2016). Previously it was planned in 2009 as an original idea by the
public works for replacing the 40 year old pay system of the traditional way in which federal
government used to deliver the compensation to the employees. This system had the
government have a hope of centralising the entire payroll process for the employees and keep
it in one place which was previously scattered throughout the individual departments. This
particular hope headset in to find a much more organised payroll system which was
automated as well as centralised but it would lower the requirements of the labours and as a
result the cost of implementation and maintenance would reduce.
The entire cost of setting up the system at first was estimated to be a whooping
amount of 310 million USD with the online system being planned in 2015. The online system
has been established only to heaven expectation of savings at least 78 million USD per year
(Asgarkhani et al. 2017). In addition to that the then Prime Minister of Canada, Mr. Stephen
Harper, at that time had announced that this would be considered as a compensation and IBM
has been given the contract to set up the entire system with the utilisation of PeopleSoft
software. However, the entire online system has been increasingly facing various problems
regarding non payments and payments and at sometimes even over payments for the
employees continuing to cause problems and as far as naming the entire project to be and IT
failure in the letter times.
Justification of the selection of the Project
A successful IT project would have several points to learn from about its success but
it would be even valuable to learn from the failures of a project. Since, this particular project
has several information available given the project failure and its analysis, it is justified that

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this particular project is selected for the analysis. Given its failure, the have been various
analysis available by researchers that specifies that would add value to the analysis process
and make it easier to determine the cause of failure with the provided information.
The project case of failure of Canadian Phoenix payroll system
The traditional payroll system of Canadian federal government what's about 40 years
old, for which in 2009 the Phoenix platform was paste for replacing the traditional payroll
system and make it a much more compact and easy to operate for all the employees working
under the Canadian federal government.
During the commencement of the entire project it was the organisation of IBM which
was chosen as the contract for delivering the entire system based on Oracle's PeopleSoft
software. The entire estimated economy to be spent over the entire project was thought to be
310 million Canadian dollars but it broke down soon enough when the entire online project
was considered to be allowed live in 2016. Right after this device in the entire cost of the
project was increased to 540 million Canadian dollars and at a total estimation it was
considered to be at least 850 million Canadian dollars (Golini, Kalchschmidt and Landoni
2015). The entire problem had been at such a complicated scenario that the Trudeau
government has estimated the entire cost of fixing the total system by the time of 2022 to be
of 1 billion Canadian dollars. The entire project was considered a failure from both the sides
of Oracle and IBM but the failure of the department of public services and procurement
Canada entirely held responsible forest failure on the Phoenix payroll system (Webb 2017).
The departments had not tested the entire system completely and properly before it was
implemented or even allowed to go live. This is not considered to be a standardized practice
for developing a system and making it go live. Hence the entire pilot project was cancelled

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from one department which assets that Phoenix could have been ready to be used at that point
of time throughout the entire government payroll.
Identification, discussion, and justification of the criteria to measure the chosen
project
Identification and discussion of the reason: The Canadian Phoenix payroll system
was considered to be discussed in this particular report as the chosen project because of its
massive appeal and failure of the entire system due to the wrong leadership and planning. The
entire project was taken up by government itself and was handed over to a very renowned
organisation that specialises in developing software for various organisations and government
at large. The problems that can be occurring at much reputed organisations can even cause a
massive project like this to fail rigorously (Antony and Gupta 2018). The reason behind
choosing this particular incident was to present the masses appeal and the way by which even
large organisation can make mistakes in presenting critical and important project as well.
Justification: The way by which the entire project head field due to wrong planning
and bad bosses, that is, wrong leadership what's the reason why this project has been selected
to discuss and analyse. This is present at your idea how long leadership and planning would
lead a huge project to feel beyond any kind of repair and causing the loss of a huge amount of
money as a result. IT projects are often found to be dealing with a lot of Management and
delegation problems and since there are humans involved with in this there can be other basic
errors as well. How these extremely basic errors can also cause an entire project of such a
massive appeal to feel completely causing the government huge loss of time and monetary
resources would make people understand the importance of planning and leadership within a
project (Mandal and Pal 2015). In this way the people going through this report would be
able to understand how any project should be commenced right from the beginning.

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Analysis of the case based on the criteria identified
The following criterion that has been identified for the failure of this case is improper
planning and wrong leadership. Therefore the following analysis of the case movie based on
these two criteria that has been identified.
Both the important departments of Public Services and Procurement in Canada were
supposed to check the entire software before it even went on live. However it can be said that
they were not cross checked over their personal duties of testing the entire software by
themselves. Therefore there leaders or the executive of the project who are at a much higher
post, and who are designated to watch over these two departments had failed in their
leadership skills to make these two departments understand their duties and not make the
entire software go live without testing at all (Kendrick 2015).
In addition to that the IT project was facing huge management and allocation
problems right from the beginning and there were many basic errors committed throughout
the project such as the inability of handling the request of retroactive payments. When these
requests were identified to be answered the auditor had replied that these basic areas where
not as important as getting the system online was and therefore this could have been ignored.
The department well and good knew about all the critical weaknesses of the software before
it was implemented by the Phoenix system (Kerzner 2018).
From the perspective of the analyst this was a much serious weakness to be
considered before implementing the system but the departments and executives decided
ignoring them altogether, which mostly caused the failure of the entire system. this also prove
that pre-planning was required to be done in a much more effective way so that these basic

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errors could have been easily planned to be eliminated from the system right at the point of
time when they were assumed to be occurring.
Recommendations
According to the analysis of the entire problem of the Phoenix payroll system
implemented by the Canadian government and developed by IBM, it can be recommended
that a new set of requirement should be implemented for this system to be revived again. this
new set of requirements would be required for the Canadian government to make them
understand the proper way of handling major IT projects, which would include the use of the
proper internal auditing and allocating of the groups which would make it easier to keep up
close vigilance on how all the project works are being rolled out one after another. The entire
report would also be called by the department for bringing in some executive or responsible
person who defined and assign the rules to everyone would be involved with the project. The
project managers would be made sure to understand and respect all the requirements and a
stakeholder engagement plan should be delivered. Along with that a proper formal software
upgrade plan should be device with a comprehensive contingency plan to cover all the
systems in the entire government, the processes to define and the impact that it would have
on all the projects running under the government and its responsibilities. Specifically to the
Public Services and Procurement department of Canada, the findings should be provided as
an outline for helping all the government and big organisation to undertake all the major
technology projects scheduling the dangers and there should be no project that would go
without a proper planning and deployment of these plants for regular auditing and responding
when risks arise.

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Conclusion
Therefore in conclusion it can be said that the entire project of Phoenix payroll system
implemented by the government of Canada failed in 2016 due to poor planning and bad
leadership taking place. The entire analysis ensures how project should be taken on especially
when they are related to Information Technology regarding the planning phase before getting
on to the implementation altogether. The analysis also represents how was planning and
leadership behind an IT project can cause a huge waste of time and capital resources as well.
The loss of amount was speculated to be about 1 billion Canadian dollars, which entirely
belongs to the government. Therefore from this IT project failure it could be learnt that,
before taking up any kind of project especially when it is information technology related, it is
necessary that a risk management plan and contingency plan is done beforehand, and it
should be followed by a proper leadership implementation which would help the people
involved in the project to be guided through an appropriate structure of step by step
progressing through a project.

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References
Anthopoulos, L., Reddick, C.G., Giannakidou, I. and Mavridis, N., 2016. Why e-government
projects fail? An analysis of the Healthcare. gov website. Government Information
Quarterly, 33(1), pp.161-173.
Antony, J. and Gupta, S., 2018. Top ten reasons for process improvement project
failures. International Journal of Lean Six Sigma.
Asgarkhani, M., Cater-Steel, A., Toleman, M. and Ally, M., 2017, December. Failed IT
projects: is poor IT governance to blame?. In Proceedings of the 28th Australasian
Conference on Information Systems (ACIS 2017). Australian Association for Information
Systems.
Golini, R., Kalchschmidt, M. and Landoni, P., 2015. Adoption of project management
practices: The impact on international development projects of non-governmental
organizations. International Journal of Project Management, 33(3), pp.650-663.
Kendrick, T., 2015. Identifying and managing project risk: essential tools for failure-
proofing your project. Amacom.
Kerzner, H., 2018. Project management best practices: Achieving global excellence. John
Wiley & Sons.
Lientz, B. and Rea, K., 2016. Breakthrough technology project management. Routledge.
Mandal, A. and Pal, S.C., 2015. Identifying the Reasons for Software Project Failure and
Some of their Proposed Remedial through BRIDGE Process Models. International Journal of
Computer Sciences and Engineering, 3(1), pp.118-126.

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Webb, A., 2017. The project manager's guide to handling risk. Routledge.