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HomeMy WebLinkAboutIT 01-24Report to Executive Committee Report Number: IT 01-24 Date: June 10, 2024 From: Paul Bigioni Director, Corporate Services & City Solicitor Subject: IT Capability Assessment -File: A-3700 Recommendation: 1.That Council endorse the IT Capability Assessment dated June 10, 2024 set out in Attachment 1; 2.That staff be directed to incorporate the recommendations of the IT CapabilityAssessment into future planning and budgeting processes for the City of Pickering; and 3. That appropriate City officials be authorized to take the actions necessary to implement the Recommendations in this report. Executive Summary: The purpose of this report is to present the City of Pickering IT Capability Assessment, as prepared by KPMG LLP, for Council’s endorsement. The Assessment describes the City’s growing demand for technology to support its day-to-day operations, and further describes the additional resources that are required to meet that growing demand. KPMG has concluded that the City requires an additional ten full time employees in the IT Division in a three year timeframe to meet the City’s growing needs to implement and support the systems necessary to serve the public and maintain day-to-day operations. Relationship to the Pickering Strategic Plan: The recommendations in this report respond to the Pickering Strategic Plan Priorities of Advance Innovation & Responsible Planning to Support a Connected, Well-Serviced Community, and Foster an Engaged & Informed Community. Financial Implications: The Recommendations in this report will have budgetary implications, which will be considered as part of future budgets to ensure that adequate resources are allocated to meet the City’s network, communications and technology needs effectively. Discussion: The purpose of this report is to present the IT Capability Assessment, prepared by KPMG LLP, for Council’s endorsement. The Assessment is Attachment 1 to this report. -01:Jof- Pl(KERJNG IT 01-24 June 10, 2024 Subject: IT Capability Assessment Page 2 The IT Capability Assessment (the “Assessment”) addresses the pressing need to assess staffing levels and capacity requirements within the IT Division to support the City's digital initiatives and service delivery objectives. With technology playing an increasingly important role in municipal operations, it is essential that the IT Division is adequately resourced to meet current and future demands. In particular, cybersecurity, digital transformation, and service accessibility rely on the availability of sufficient IT staffing. Adequate IT staffing will safeguard City systems and improve efficiency. The Assessment evaluates the staffing needs of the IT Division and projects incremental staffing requirements over a three-year timeframe. KPMG LLP was retained to carry out the Assessment following its successful response to RFP 2022-5, which was issued on April 19, 2023. With over 750 municipal clients across Canada, KPMG has extensive experience advising municipal governments. Stakeholder input and peer benchmarking informed the Assessment's projections and headcount estimates. The Assessment involved extensive interviews and feedback sessions with IT Division senior staff. KPMG also surveyed the IT project requirements of all City Departments to validate workload factors and project demand assessments. Peer benchmarking was conducted to compare the City of Pickering's IT staffing needs and capacity requirements with those of similar municipalities, ensuring that the KPMG's findings were contextually relevant. Key Deliverables: A.The Assessment provides insight into the following: 1.Insights into Project Demand: The Assessment provides an analysis of project demandwithin the IT Division, including assessments of current and planned projects. This highlights capacity shortfalls and areas requiring additional resources to effectively manage project delivery. 2.Understanding of “business as usual” (BAU) Workload Drivers: By identifying andanalyzing six types of drivers influencing BAU workload, including volume, complexity,and stakeholder management, the Assessment provides valuable insight into the factors impacting staffing requirements. 3.Capacity Shortfall Identification: The Assessment identifies capacity shortfalls withinthe IT Division, identifying areas where additional resources are needed to maintainservice levels and support organizational goals. B.The Assessment’s Recommendations: 1.Align staffing levels with organizational needs: Implement the recommended staffingadjustments to ensure that the IT Division has adequate resources to meet current andfuture demands, including addressing capacity shortfalls identified in the assessment.KPMG’s conclusion is that the City requires an additional ten full time employees in the IT Division to meet the City’s growing needs to implement and support the systems necessary to serve the public and maintain day-to-day operations. These new FTEswould be introduced over a three-year timeframe. IT 01-24 June 10, 2024 Subject: IT Capability Assessment Page 3 2.Strengthen IT capabilities, cybersecurity measures, and project management:Allocate resources to enhance cybersecurity measures, project management, and business analysis capabilities within the IT Division. Bolstering these areas will enable the City to effectively manage digital projects, analyze business requirements, and mitigatecybersecurity risks, thereby ensuring the successful implementation of IT initiatives andthe delivery of high-quality services to residents. 3.Conduct project assessments to evaluate IT capacity for new initiatives: Implement a process for conducting thorough project assessments to evaluate the IT Division's capacity to support new initiatives that rely on technology. By proactively assessing the ITDivision's readiness and capacity, the City can accurately gauge the potential impact ofnew projects, identify any resource constraints or gaps, and make informed decisions toallocate resources effectively. This will help ensure the successful implementation of new initiatives. Subject to Council’s approval, the Assessment will be used as a guide to staff when developing future staff work plans and drafting City budgets. Attachment: 1.IT Capability Assessment dated June 10, 2024 Prepared By: Prepared/Approved/Endorsed By: Dale Quaife Paul Bigioni Division Head, Information Technology Director, Corporate Services & City Solicitor DQ:PB Recommended for the consideration of Pickering City Council Marisa Carpino, M.A. Chief Administrative Officer Original Signed By:Original Signed By: Original Signed By: IT Capability Assessment City of Pickering Presentation to Executive Committee — June 10, 2024 Attachment 1 to Report IT 01-24 2© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. Overview of Pickering IT Division’s Journey Building Readiness for a Digital Transformation Bu s i n e s s G r o w t h Digital Transformation Last 20+ Years •IT Division headcount remained at 7 from 2000 to 2015 despite growth in community to 95K •In Jan. 2016, Prior and Prior Associates Ltd. conducted the first technology review and recommended changes: a) 3 positions immediately; b) 3 positions in the medium term; and c) 3 positions in the longer term •In 2016, Council approved 12 additional headcount for IT 2027 •IT Division should have 28 employees supporting a community of 114K: a) 5 new employees in early ‘25; b) 3 by the end of ‘26; c) 2 by end of ‘27 •The GIS function will be expanded to provide analytics support to the business •IT policies and procedures will be in place •Greater controls, and clearer governance and security practices will be adopted •The digital acumen of IT and business leaders will be strengthened •Focus on Succession Planning to recruit strong IT leadership to replace retiring managers 2024 •IT Division has 18 employees (16 active with 2 being onboarded)* supporting a community of 105K •IT regularly works overtime to meet the day to day needs of the business* (3 FTEs) •BAU backlog builds as service levels slide* (3.7 FTES) •Project backlog exists, with insufficient capacity* (shortfall of 2 FTEs) •Business leaders have a basic foundation in place for its digital journey •Business leaders have aggressive plans for Digital Transformation, Workforce Modernization & GIS Strategy 2029 + •Pickering’s Digital Transformation will be well underway •Emerging AI-driven threats, cyber-crime, and online service disruptions intensify cybersecurity challenges •IT will be fully supportive of hybrid working arrangement with Workforce Modernization •GIS Strategy will be implemented with sophisticated tools and functionality and IT providing deep analytics and insights for the business •Strong IT leadership will be in place to ‘partner’ with the business History Today In 3 Years In 5 Years Continued Growth NOTE: At the time of the analysis (May to September 2023), Pickering’s IT Division had 16 employees. II 3© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. Context for the IT Capability Study –Executive Summary Context for the IT Capability Study The City of Pickering (“Pickering”) engaged KPMG to complete a study of the current staffing and capabilities within the IT Division and to assess the potential impact of strategic corporate initiatives such as the Digital Strategy, Workforce Modernization and GIS Strategy on the IT Division. The purpose of this project was to develop a workforce estimating tool or model that will enable Pickering to more proactively manage the workload changes over time. The current IT capabilities were expected to be insufficient to support the incremental demand from the business for IT support in the next three years and beyond. Pickering is facing a significant number of external factors impacting workload. The key external factors included the growing number of applications, community growth, increasing complexity of emerging technologies, and legislative changes. The key internal factors are an increasing number of projects related to the Digital Transformation, Business As Usual (BAU) and project demands triggered by the Workforce Modernization initiative, and the need to keep up with emerging technologies through ongoing learning, During this study, KPMG discovered that these internal and external factors are having a negative impact on service levels, the health and wellness of employees, and other risks. Peer Analysis Pickering considered a number of municipalities for inclusion in its peer analysis, before selecting seven that are most comparable to the estimated size of Pickering’s population in three to five years –the planning horizon for the study. These municipalities are deemed to play a similar role in supporting their municipalities’ digital agenda. The information below summarizes each municipality’s size, relative to Pickering’s 2026 estimated population of 114,800 (based on an average annual growth rate of 5%). Based on an analysis of this peer group chosen by Pickering, the size of all seven municipality’s IT divisions are considerably larger than Pickering’s IT Division. Supply and Demand Analysis The study found that Pickering’s 16 IT employees is insufficient to keep up with work demands, as evidenced by the BAU backlog that is equivalent to about 3.67 FTEs (See Appendix A for additional details).With the current BAU increasing every year, Pickering’s IT division will continue to experience an increasing amount of backlog –building up over the upcoming three year period to reach 6.05 FTE’s or about 2 FTEs per year. Due to the overtime, these 16 workers represent 18.35 FTEs. In short, the study suggests that 5 FTE’s are required in 2025 to address the overtime and BAU backlog, and an additional 3 FTEs and 2 FTEs would be required by the end of 2026 and 2027 respectively to keep pace with the growth. Since projects should not be resourced with full-time employees, an additional 2 external resources likely need to be secured to meet the current project workload of 1.96 FTEs.(See Appendix B for a breakdown of the project demand). This project estimate should be reassessed when the 2024 project approvals are complete in Q2 of 2024. NOTES: At the time of the analysis (May to September 2023), Pickering’s IT Division had 16 employees. A full-time equivalent indicates a full-time worker or 1.0 FTEs: 0.5 FTE signals a half-time worker 4© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. Context for the Digital Strategy Context for the Digital Strategy Pickering is embarking on a transformational journey to become a municipal leader in citizen-centered digital services. Through the development and execution of a Digital Strategy, Pickering is setting the foundation for future service delivery by establishing a vision, an organization-wide commitment, and clear accountability and actions for the City’s digital future. The Digital Strategy will guide Pickering’s transformation through the approved future investments in people, processes, and technology, enabling the integration of digital technology into all areas of our business –fundamentally changing how we will operate and deliver value to our citizens and other stakeholders. In February 2024, Council approved the recommended Digital Strategy that was based on MNP’s Municipal Technology and Innovation Framework, which uses leading practices for leveraging modern technology to continuously improve municipal services. The three main focus areas of the Digital Strategy are: •Digital Transformation –This involves replacing manual processes with digital processes or replacing older digital technology with newer digital technology. •Technology Governance –This involves organizational change management of how technology is selected, managed and maintained. •Data and Analytics –This involves data architecture, privacy and cyber security. These digital initiatives are expected to commence in mid-late 2024 and may take eight years to fully realize, contingent on securing sufficient staff resources required to implement and support the Digital Strategy. Subsequent years place a significant focus on opportunities to increase digital literacy both for employees as well as the community, and enhancing the City’s ability to use data to make informed decisions. The recommended proposal from MNP Digital Inc. in response to RFP 2022-2 was approved by Council on September 6, 2022 and included in the 2022 Current Budget, which included a request for 12 additional resources to help realize the City’s transformation vision over the next two to five years (a combination of FTEs and contractors, as required). 5© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. Define workforce requirements Model the workforce against hypothesis Categorize internal labourReview organization strategy Assess supply & demand Identify future needs 1 2 3 4 5 6 Workforce Model Development Approach –Six Stages Completed Completed Workforce Model Development Scope The workforce model development process has been designed to achieve Pickering’s goal of having a tool for determining the City's staffing needs over the targeted three year period, and refreshing the estimate over time. The scope of the workforce models includes both the business as usual (BAU) activities as well as the project workload that impacts the IT Division. When designing the IT workforce models, we created a separate model for each of the following four teams: •Application Development & Support •GIS •Network Security •Network Support The GIS model was included since it was in transition from the City Development Division to the IT Division. Since a fifth team is expected to be established in the next year, a workforce model ‘template’ was also constructed for a Project team that will report into the IT Division –which will be populated now that a Project Lead has been recruited. This section describes the approach to each stage of the process and presents the findings of all six stages that were completed. In other words, this section summarizes the four workforce models that have been designed and populated with the baseline data for the IT function. Workforce Model Development Completed Completed Completed Completed 6© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. Engaging Internal Stakeholders During this project, KPMG engaged key stakeholders on four occasions to complete the process of developing and validating the workforce models for the four IT teams.The description below summarizes the goals and key activities related to each step in the stakeholder engagement process. The Engagement Process to Develop the Workforce Models The third step in the engagement process first involved a meeting to confirm the projects that would impact the various teams. As a follow-up, meetings were held with the IT Division Head and their direct reports to estimate the project demand for the next three years. The discussion also focused on identifying the demand drivers for BAU, weightings of each driver for each role, and the estimated increase of the current BAU activities over the next three years. The outputs of these interviews were used to populate the Step 2 Project Resource Plans, Step 3 Project Demand, and Step 4 BAU Drivers & Demand tabs. The final step in the engagement process was to meet with the IT Division Head and direct reports to review and finalize the model projections as well as populate the Step 6 Workforce Summary. KPMG reviewed the entire model with the direct reports to demonstrate the flow of the model, which included both the supply of labour as well as demand from various sources – overtime, succession planning, project workload, BAU growth over three years and BAU backlog. These inputs were used to facilitate making the final headcount estimating decision. The second step in the engagement process was to interview the IT Division Head and their direct reports to validate factors affecting workload, pain points, and the current supply of labour or headcount documented in the Step 1 Planning Assumptions tab.The data included the roles, employee name, current overtime levels and percentage of time each resource spends on Business as Usual (BAU) as well as project related activities. A peer analysis was also conducted with seven municipalities that were considered comparable to Pickering’s future state in three to five years. KPMG began the engagement process by interviewing the IT Division Head. The purpose of this interview was to obtain a perspective on the key factors or trends impacting workload in the next three years, the implications of these on the current operating model, and any hypotheses related to required headcount increases as input into Step 1 Planning Assumptions and Step 5 Top Down Hypothesis tabs. 03 Identify Needs and Validate Drivers 04 Finalize Model Projections02Validate Current State with Direct Reports01Review Strategy with Leadership 7© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. Results of the IT Capability Study The study found that Pickering’s 16 IT employees is insufficient to keep up with work demands, as evidenced by the business as usual (BAU) backlog that is equivalent to about 3.67 FTEs (See Appendix A for additional details).With the current BAU increasing every year, Pickering’s IT division will continue to experience an increasing amount of backlog – building up over the upcoming three year period to reach 6.05 FTE’s or about 2 FTEs per year. Due to the overtime, these 16 workers represent 18.35 FTEs. In short, the study suggests that 5 FTE’s are required in 2025 to address the overtime and BAU backlog, and an additional 3 FTEs and 2 FTEs would be required by the end of 2026 and 2027 respectively to keep pace with the growth. Since projects should not be resourced with full-time employees, an additional 2 external resources likely need to be secured to meet the current project workload of 1.96 FTEs.(See Appendix B for a breakdown of the project demand). This project estimate should be reassessed when the 2024 project approvals are complete in Q2 of 2024. Sub-Team Current FTE (Unadjusted)Current FTE Overtime Current FTE (Adjusted for Overtime) Incremental BAU BAU Backlog(for ’26 /”27)Project Capacity Shortfall 2024 (FTEs) Total Capacity Required for the Planning Period Year 1 ( 2025)Year 2 (2026)Year 3 (2027) IT Division Head 1.00 0.28 1.28 0.00 0.00 0.00 0 0 0 Application Development and Support 3.00 0.07 3.07 0.76 0.77 1.12 1 -Start of the year0.5 -End of the year 0.5 0.5 GIS 2.00 0.36 2.36 0.66 0.4 0.47 1 -Start of the year 0 0 Network Security 2.00 0.43 2.36 1.22 0.5 0.03 2 -Start of the year 0.4 -End of the year 0.4 0.4 Network Support 7.35 1.72 9.21 *3.41 2 0.34 2 -Start of the year2 -End of the year 1 1 Total 15.35 3 18.35 6.05 3.67 1.96 8.9 1.9 1.9 * NOTE: Excludes Community Service resource and Summer Student 8© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. Pickering considered a number of municipalities for inclusion in its peer analysis, before selecting seven that are most comparable to the estimated size of Pickering’s population in three to five years –the planning horizon for the study. These municipalities are deemed to play a similar role in supporting their municipalities’ digital agenda. The information below summarizes each municipality’s size, relative to Pickering’s 2026 estimated population of 114,800 (based on an average annual growth rate of 5%). Based on an analysis of this peer group chosen by Pickering, the size of all seven municipality’s IT divisions are considerably larger than Pickering’s IT Division. When adjusted for Pickering’s estimated population of 114,800 in 2026, this peer data suggests a range of 19 to 36 resources. If we assume that Ajax is the most relevant comparator, the results of the Peer Analysis suggest that another 8 resources are required. These results align with KPMG’s study, which also indicates that the City will need 8 additional resources over the next two years to address the current overtime, BAU backlog and growth. The study suggested a phased introduction of these 8 resources over the next two years, with the addition of 5 resources in 2025 and 3 resources by the end of 2026. While the peer analysis offers a current view of the comparator’s staffing levels, the study further evaluated the growth of the IT Division’s BAU workload. This further evaluation suggested that an additional 2 resources would be required by the end of 2027 to manage the projected growth. City Population Size3 IT Division Size Comparability Estimated Headcount for Pickering, when Adjusted for Population Size Differences City of Pickering 99,186 16 Included here for comparison N/A Town of Ajax 126,666 27 Approx. 10% larger than estimate 24 City of Barrie 147,434 51.6 Approx. 30% larger than estimate 36 Town of Chatham-Kent 103,988 40 Approx. 90% of estimate 44* City of Greater Sudbury 166,004 43 Approx. 45% larger than estimate 24 City of Kingston 132,485 55 Approx. 15% larger than estimate 47* City of Lethbridge 98,406 40 Approx. 85% of estimate 46* Town of Milton 132,979 23.6 Approx. 15% larger than estimate 19 Average for Peers 26 Results of the Peer Analysis * NOTE: Chatham-Kent, Kingston and Lethbridge are considerably larger as they are more evolved in their digital journey, and were therefore not included in the average for peers 9© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. Implications of the Status Quo Implications of the Status Quo Pickering is reaching a tipping point where “doing more with less” is becoming unsustainable and has triggered some high-risk issues –particularly related to employee wellness, the implementation of Pickering’s Digital Transformation and Workforce Modernization initiatives, and security concerns as Pickering shifts to new ways of working. In the event that no additional headcount is approved, the resulting risks to the IT Division are summarized below. Issue Risks to IT Division Risk Level Inadequate resourcing Insufficient resources can significantly jeopardize Pickering’s Digital Strategy and IT operations. A lack of adequate resources can hinder the successful execution of a robust Digital Strategy, potentially causing missed opportunities for Digital Transformation and innovation. Additionally, day-to-day IT operations, including system maintenance, data protection and cybersecurity, may suffer –leading to inefficiencies and data breaches. High Employee Wellness, due to Overtime With overtime for the IT Division totaling 2.35 FTEs, the risk of stress and burnout associated with trying to meet the increasing workload is extremely high, particularly in Network Support where it represents 1.72 FTEs for the 7 staff members –even with help from a summer student (0.3 FTE). High Project Delays With a project capacity shortfall of 1.96 FTEs, Pickering’s ability to implement projects related to the Digital Transformation and Workforce Modernization will be negatively impacted. If the IT Division is expected to fund these automation projects through its annual budget, there will be negative impacts on BAU as well as other corporate projects. High Security Concerns As the prevalence of cyber threats towards municipalities continues to escalate, the associated risk level also significantly increases. A lack of adequate staffing could potentially result in incidents that pose a reputation risk for Pickering as it compromises the confidence of citizens in the City’s data protection capabilities. It is therefore imperativeto promptly address these vulnerabilities to uphold public trust and ensure the security of residents’ sensitive information. High Low Service Delivery Levels for BAU The Network Support and Application Development and Support teams both referenced the risk to service delivery or quality as employees fail to complete deliverables or meet internal SLAs on time, and incur backlog. The teams also identified risks associated with resiliency and knowledge transfer due to the current lean IT Division. Medium Lack of Talent Management / Staff Development Some employees mentioned that they are not able to remain up-to-date on industry best practices due to a lack of available time to dedicate to professional development.Medium 10© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. Future Considerations To ensure the effective utilization of the model moving forward, Pickering should incorporate the following leading practices: Alignment to the Strategic Planning and Budget Process Pickering should consider integrating workforce planning into it’s annual strategic planning and/or budgeting refresh processes. Some organizations have adopted a leading practice of using the workforce model to anticipate the resources required to deliver the strategic priorities –and use this capacity estimate when completing the staffing portion of their annual budgets. A disciplined cadence of regular workforce model updates will ensure that Pickering has deeper insights into its current supply and cost of labour, upon which to base future labour estimates. Regular Updates The workforce model owners should consider updating their team’s workforce models on a scheduled basis (e.g., quarterly), rather than relying on ad hoc updates. This ensures the models remain up-to-date and limits the workload at year-end when preparing the model for the budget process. As an option, in some organizations Human Resources plays a role in triggering the workforce model updates as a follow up to the annual strategic planning process –to ensure that the capacity required in IT to support the business is known. Workforce Model Owners Pickering should consider assigning an owner to each team’s workforce model. The owner of each workforce model would assume all the responsibilities associated with the model including the updates and any scenario analysis. The single owner allows for version control, remains accountable for the model, and ensures that any sensitive information (e.g., retirement information) is not broadly available. Organizational Changes Pickering’s IT Division may consider implementing a more specialized team-based organizational structure. This includes implementing more specialized teams with distinct expertise. This will allow the IT Division to better align resources with strategic goals and will promote a deeper understanding of the City’s IT environment amongst staff. Appendix 12© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. Driver-Based Estimate The table below summarizes the BAU change and backlog for all IT Divisions. Based on a bottom-up driver based assessment, the BAU is expected to increase by 6.05 FTEs over the 3 year planning period, which equates to about 2 FTEs per year. The current capacity in the IT Division is insufficient to keep up with demand. As a result, there is a backlog that represents 3.67 FTEs overall. Appendix A: BAU Change and Backlog Sub-Team Current FTE (before OT)Current FTE (adjusted for OT)FTE Allocated for BAU Incremental BAU BAU Backlog IT Division Head 1.0 1.28 0 0 •Not applicable Application Development and Support 3.00 3.07 1.84 0.76 •One additional day a week (0.4 FTE) to overcome delay in request work •An additional 2 hours per day to increase the quality of support (0.29 FTEs). •Estimated additional 8% of total time required to allow team members to attend training and development sessions (0.08 FTEs). •Total Backlog of 0.77 FTEs GIS 2.00 2.36 2.13 0.66 •One additional day a week (0.4 FTEs total) for each of the team members to catch up on backlog. •This current unmet tasks depends on how the systems are designed (e.g., upfront automation will ease the workload demands of data uploads in the future, etc.).•Total Backlog of 0.4 FTEs Network Security 2.00 2.43 2.06 1.22 •Estimated 50% additional time for (0.5 FTE) at the beginning of FY24 to overcome patching backlog. •Expectation that current roles will be able to overcome backlog related to updating policies and procedures. •Total Backlog of 0.5 FTEs Network Support 7.35 9.21 7.68 3.41 •Filling Helpdesk Analyst vacancy along with a summer student may still require an additional FTE to manage the current helpdesk ticket backlog (1 FTE). •Require another Systems Administrator, for redundancy (1 FTE). •Total Backlog of 2.0 FTEs Total 15.35 18.35 13.71 6.05 •3.67 FTEs I I I I I 13© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. Appendix B: Assess Project Demand Sub-Team Current FTE Average % Time on Projects Adjusted for % Allocated to Projects (FTE) Estimated Project FTE 2023 Estimated Project FTE 2024 Project Capacity Shortfall2023 (FTEs) Project Capacity Shortfall2024 (FTEs) Application Development and Support 3.07 28.33%0.87 1.49 1.93 0.71 1.12 GIS 2.36 10%0.23 0.46 0.69 0.23 0.47 Network Security 2.43 15%0.36 0.73 0.4 0.37 0.03 Network Support 9.21 16.6%1.53 2.13 1.67 0.70 0.34 Total 17.07 2.99 4.81 4.69 2.01 1.96 Project Demand To determine the project demand, the IT Division Head and direct reports validated a list of projects that are currently approved and ‘in flight’. As a next step, this project list was distributed to the team leaders to estimate their 2023 and 2024 hours for each role who will be involved in the project delivery. The table below summarizes the allocation of time for projects that each team has available, as well as the estimated demand or capacity that will be required to deliver the projects –expressed as an FTE for 2023 and 2024. The total project demand is 4.81 FTEs for 2023 and 4.69 FTEs for 2024. As a next step, project capacity shortfall was identified for 2023 and 2024, illustrating that 2 resources would be required to keep up with project demand for 2023 and 2024. Since leading practices suggests that project resources should be external consultants or contractors, it is assumed that full-time dedicated employees are not required to meet this project demand. 14© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. Estimated Salary for Recruiting Purposes The salaries of individuals in the information technology industry are impacted by a number of factors, including a global talent shortage triggered by the Great Resignation, that has led to the demand for IT professionals with specialized skills (e.g., AI, cybersecurity, etc.) exceeding the supply –driving up salaries.. In addition, we’ve seen increasing employee expectations since COVID when staff were required to work from home, which has triggered the adoption of flexible work arrangements. It has also contributed to the practice of recruiting staff from larger geographical areas, which has implications for salaries e.g., attracting IT professionals who live in larger cities where higher salaries are paid. In other words, it is difficult to predict whether current IT salaries will be sufficient to retain staff. The chart below presents 2022 salary ranges for IT leadership positions in municipalities, as reflected on the publicized 2022 Sunshine List. Appendix C: Leadership Salary Data from Peer Analysis Work Team Range1 IT Directors / Chief Information Officers $145,000 to $185,000 IT Managers $110,000 to $150,000 Project Leaders $95,000 to $115,000 Application Development & Support Leaders $110,000 to 135,000 Network Support Leaders $100,000 to $125,000 Network Security Leaders $100,000 to $120,000 GIS Leaders $100,000 to $130,000 1.Source –Ontario Sunshine List 2022 15© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. Disclaimer This report has been prepared by KPMG LLP (“KPMG”) for the City of Pickering (“Client” or “the City”) pursuant to the terms of our engagement agreement with Client dated April 19, 2023 (the “Engagement Agreement”). KPMG neither warrants nor represents that the information contained in this report is accurate,complete, sufficient or appropriate for use by any person or entity other than Client or for any purpose other than set out in the Engagement Agreement. This report may not be relied upon by any person or entity other than Client or for any purpose other than set out in the Engagement Agreement.This report may not be relied upon by any person or entity other than Client, and KPMG hereby expressly disclaims any and all responsibility or liability to any person or entity other than Client in connection with their use of this report. The information provided to us by Client was determined to be sound to support the analysis. 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