BC IT Outsourcing 2020/21

Public accounts came out at the end of summer, so I have finally gotten around to entering in the central government data (the Health Authorities put out their reports much later) and the results show … the first decline since 2015?

Historically there have been growth pauses every 5 years or so, but the last two were associated with brief phases of government austerity, though that may have been a mirage, since the other thing the pauses all have in common is IBM taking it on the chin.

The loss of a book of Ministry of Health business (twice), then the loss of the desktop support contract, seem to tell the tale of IBM’s decline as an outsourcing juggernaut.

Maximus remains curiously resiliant, even as the MSP program phases out.

And the big shark, the back-office systems contract, which has migrated through a series of corporate names, from EDS (does anyone remember Ross Perot?) to HP Advanced Solutions to ESIT Advanced Solutions is now just … “Advanced Solutions, a DXC Technology Company”.

Looking over the sweep of the curve (which is now 23 years long!) you can see a bunch of interesting moments:

• The initial major privatization around 2005 under the Campbell Liberals, which starts off the whole process.
• The entry of Maximus into the Ministry of Health in 2005 at that same time, which may help explain some of the decline of IBM, as a more nimble competitor gobbles up prospects.
• The entry of Deloitte in 2011, for the Social Services ICM project, which leads to solid growth, but is also the high-water mark, as the planned successor project in Natural Resources around 2015 ends up going more to CGI than Deloitte.

What might the future hold? I have no idea, but unless and until the major backend contract held by “Advanced Solutions” changes (was supposed to run out this year?) I expect the total outsourcing spend to remain in the “holy cow that is a lot of money” range.

Coda: It’s waaaay to early to make any serious statements, but one thing I did notice eyeballing the vendors chart is that while most vendors have been treading water since the NDP took government in 2017, one “vendor” that has notched up 50% growth is my aggregate “local vendors” vendor, which I batch all the smaller companies into so they show up on the chart.

Since one of the NDP platform promises in 2017 was a preference to local companies, this could be sign of progress. Or it could be random! But local companies have gone from about $50M/yr to $75M/yr since 2017, that’s not nothing. Something to keep an eye on for next year.