Commission finds ASP pricey

In its continued quest to become the world’s first, fully-integrated e-government, the Government of Canada is offering its departments the opportunity to take advantage of an outsourced ASP program. The only trouble is, no department is taking advantage of it.

Ottawa-based FreeBalance Inc. – known in financial and government circles for its FreeBalance financials management system – is providing applications as a service by implementing, hosting and maintaining software and underlying infrastructure for clients within a secure Government of Canada network. But thus far, only the Canadian Nuclear Safety Commission (CNSC) has taken the bait, and even then only with limitations. Due to the sensitivity of the financial data the government holds, FreeBalance has agreed to provide the CNSC with a server and maintenance on-site.

“FreeBalance developed the program with us. FreeBalance doesn’t have a high-security environment and due to the confidentiality of our information, the government wouldn’t feel comfortable unless the server is under my desk,” joked Ginette Bergeron, the director of finance for the CNSC.

But Bergeron’s sense of jest quickly turned to an uncertain and apologetic tone while discussing the problems the CNSC faced prior to inking a one-year deal with FreeBalance.

“We had a huge problem with server downtime and system crashes and such…we reached a level of frustration as we were losing time and money and we couldn’t find out who was to blame,” she explained. “We said to FreeBalance ‘Either get this to work or we’ll choose new software,’ which is no small undertaking.”

FreeBalance’s ASP delivery is geared to provide federal departments with pristine security, cutting-edge technology to the desktop, and the assurance that confidential data never leaves the government network. Specifically, CNSC will use the ASP for standard financial functions such as general ledger, expenditures, appropriations, assets, reporting, revenue, etc.

The services rendered to the CNSC will cost Canadian taxpayers about $180,000 in 2000. The annual contract is up for re-negotiation soon, and Bergeron said she hopes FreeBalance will lower their charge for her small organization.

“Frankly I’m a bit disappointed and surprised after one year that other departments (in the government) haven’t inquired about the service and come on board with us,” she said. “I don’t think FreeBalance was as aggressive as it could have been (in convincing other federal departments of the merits of the program). The contract is not perfect, it’s too expensive for our organization, but we simply didn’t have the resources to run it alone.”

Expensive solution

Bergeron said the CNSC has trouble attracting and retaining quality IT personnel. But she also admitted her reluctance at inking a long-term deal with FreeBalance due to a plethora of issues including the fact that she wasn’t entirely sure if $180,000 per year was fair market value for her department.

“We’re not sure if other departments will come on board or not and if they do, perhaps FreeBalance can lower the price. There were little things we didn’t know; when we negotiate the next contract we will seek more flexibility (in price),” she said. “Are we satisfied with the service? Yes, absolutely. Plus our staff is more tuned into the software and have access to more inside information as a user.”

Whereas Bergeron praised the ASP and then questioned its cost, Thom Lyon said the FreeBalance ASP has benefits beyond cost.

“The efficiency of magnitude and the cost savings are the most notable benefits,” said Lyon, FreeBalance’s vice-president of professional services. “We set up an ideal platform for them linked with the applicable software to enable a dependable delivery of services.”

According to Lyon, the FreeBalance ASP program takes into account the dynamic face of government by addressing many critical and common issues, such as a shortage of skilled IT staff, the inability of departments to focus on core competencies due to technology concerns, the need for a single source for hardware, software and service, and consistently-updated software with related training.

“The cost of maintaining an infrastructure, a licence, and delivering on a dependable basis plus the difficulty in attracting and retaining quality technical experience is daunting for governments,” Lyon explained. “With a FreeBalance server on the client’s property and secured within their network…they’re [getting] for an overall solution.”

Lyon credited the federal government on its decision to get completely on-line and added that the traditional mindset of government towards outsourcing is slowly changing.

“Most government departments haven’t let go of having their data off-site; our ASP offering hasn’t come out of technological change so much as a public willingness to accept a change in technology,” he said. “It’s a similar situation to that of ATMs (automatic teller machines) 10 years ago. No one wanted to deposit a cheque in an ATM machine back then because you weren’t sure if the deposit would register properly. Now you don’t question an ATM…depositing data into a system you can’t physically see is a matter of acceptance.”

Bergeron added that despite the expense of doing business with FreeBalance, the end result is still worth it.

“I didn’t see any other option for our small operation,” she said. “We don’t have the complexity to have a database administrator for example. I feel more comfortable that we have [FreeBalance] looking after us rather than one member of staff. What if that person gets sick, or dies, or decides to quit? What would I do then? I felt vulnerable. My colleagues have chosen a different point of view.”

Despite the lukewarm review from the CNSC, 16-year-old FreeBalance Inc. boasts an impressive r