Latest news with #ProjectNova
Winnipeg Free Press
2 days ago
- Business
- Winnipeg Free Press
MPI vows to dive deep into ‘failure'
Manitoba Public Insurance made public Thursday its decision to pull the plug on Project Nova, a $164-million 'failure' intended to modernize outdated business and information technology systems. 'We were trying to fix the plane as we're flying the plane,' the Crown corporation's CEO Satvir Jatana said. 'At this point, we need to ground the plane.' The Free Press reported in March the Crown corporation had informed the Public Utilities Board of a revised cost estimate pegged at $435 million — 50 per cent more than previously thought — to complete the ill-fated plan, and its decision to abandon the project. On Wednesday, Manitoba Finance Minister Adrien Sala asked auditor general Tyson Shtykalo to conduct a special audit of Project Nova. 'We need to get off the plane, we need to fix the plane before we can safely bring the passengers back on,' Jatana said, while promising that plans for replacing outdated technology at MPI will be done right going forward, thanks to improved governance, adhering to industry best practices that allow for flexibility and focusing on business priorities while maintaining fiscal prudence. 'That's the process we're taking right now and I am optimistic that we will have a solution, but it is not a solution that can be delivered next month,' she said told a news conference, flanked by MPI board chair Carmen Nedohin and Christian Dandeneau, chair of the MPI board's technology committee. MPI said it would fully co-operate with an audit and 'looks forward to how the results can shape our work moving forward.' Shtykalo is 'considering' the audit request on the project that began in 2019 under the previous Tory provincial government and launched in early 2023 before being officially shelved Thursday. 'I am currently reviewing the request and will seek additional information before determining what action, if any, my office will take,' Shtykalo, who was not available for an interview, said in an email. Justice Minister Matt Wiebe, who is responsible for MPI, echoed the need for a 'closer look.' 'This is about accountability for taxpayers and a significant amount of taxpayers dollars were misspent in this case,' he said Thursday. University of Winnipeg political scientist Malcolm Bird said there's been too much interference in the operations of Crown corporations by both Progressive Conservative and NDP governments. The government's call for an audit sounds politically motivated, he said. Updating IT systems is 'really, really, really hard to do anywhere — whether it's in a public-sector or private-sector area,' said Bird, who studies Crown corporations. 'You have all these systems in place working and then you want to bring in new systems,' he said. 'You have to build them and then, somehow, magically shut the one down and turn the new one on, without it being a disaster.' Jatana said Project Nova 'was never set up for success' and MPI knows what went wrong. 'There was ineffective governance, critical business requirements were overlooked, significant changes in MPI leadership, a global pandemic and an historic strike,' she said. 'These factors have led to delays and cost overruns with many starts and stops to the project.' In May 2023, the MPI board fired CEO Eric Herbelin following an internal investigation into his work conduct. The Swiss national with a private insurance background was hired during the COVID-19 pandemic in 2021 while MPI was pursuing the largest technology modernization in its history. In 2023, unionized MPI workers went on strike for the first time and were off the job for 10 weeks. An organizational review by Ernst & Young last year, ordered in 2023 by the PC government over concerns about Project Nova and financial reporting, found a litany of problems — from too many managers, to friction between divisions and significant turnover between May 2021 and June 2023. High-level organizational changes caused instability and impacted the sustainability of ongoing programs, alongside a lack of solid strategic, financial and human resources planning, the report found. Meanwhile, the projected cost of Project Nova climbed from $85 million in 2019 to $107 million to $290 million to more than $435 million, announced by Jatana in March. Targets for Autopac and commercial customers being able to renew or amend insurance policies and driver's licences online and providing connections between MPI and repair shops to speed up claims processing were missed. 'Simply put, the project timelines were unrealistic. It is clear that Project Nova has experienced significant missteps and… failures,' Jatana said. 'It has not delivered the value for money that was originally planned and promised.' She said the $164 million spent to date on Project Nova did not impact MPI customers' rates. She said the public auto insurer is locked into contracts with vendors for the project and committed to paying them roughly $88 million over the next seven years, $68 million of which would be considered of no value. 'We are hopeful and optimistic that we are in conversations with those vendors that we would be able to renegotiate those contracts and mitigate those costs.' She said there no job losses or layoffs as a result. At one time, 200 employees and close to 300 consultants were working on the project. 'Right now the numbers are very, very low,' she said, adding fewer than 50 consultants and 50 employees have been moved to 'other initiatives.' Carol SandersLegislature reporter Carol Sanders is a reporter at the Free Press legislature bureau. The former general assignment reporter and copy editor joined the paper in 1997. Read more about Carol. Every piece of reporting Carol produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press's tradition, since 1872, of producing reliable independent journalism. Read more about Free Press's history and mandate, and learn how our newsroom operates. Our newsroom depends on a growing audience of readers to power our journalism. If you are not a paid reader, please consider becoming a subscriber. Our newsroom depends on its audience of readers to power our journalism. Thank you for your support.
CTV News
2 days ago
- Automotive
- CTV News
MPI shuts down failed IT project as costs drive up
Manitoba Public Insurance says it is closing Project Nova, an initiative to update the technology for insurance and driver licensing, including adding online services. Nova was announced in 2019, with a budget of $85 million. To date, MPI says the Crown corporation has spent $164 million on the project. It decided to pull the plug when estimates showed the costs would increase to $435.7 million. On top of that, none of this included a fourth and final phase. MPI said NOVA was plagued with delays, ineffective governance, procurement problems, and significant changes in leadership. It says the pandemic and the 2023 strike also impacted plans. Satvir Jatana, president & CEO of MPI, said the aspirations never met the Crown corporation's capacity or capabilities. 'Project timelines were unrealistic,' said Jatana. 'It is clear Nova has experienced significant missteps, and I would even be so bold to say failures.' In early 2023, the then CEO of MPI was replaced after the former PC government ordered a review. The current NDP government has now asked the auditor general to probe Nova. MPI said it will still move ahead to replace the outdated technology but is promising 'a more pragmatic approach,' including breaking down plans into smaller projects to better predict costs and timelines.
CBC
2 days ago
- Business
- CBC
MPI pulls plug on costly IT overhaul Project Nova, cites 'missteps' and 'failures'
Manitoba Public Insurance is cutting its losses and killing Project Nova, the IT overhaul project that has bled money since it was first launched in 2019, and the province has requested an audit of "the decisions and management" around it. "It is clear that Nova has experienced significant missteps, and I would be even so bold to say failures," MPI president and CEO Satvir Jatana said at a Thursday news conference. "It has not delivered the value for money that was originally planned and promised, and we did not make this decision lightly. However, staying on this path would not be responsible nor in the best interest of Manitobans." Project Nova was supposed to replace MPI's outdated technology with a new modern platform to provide insurance and driver licensing services and more online options for customers. The initial budget was $86 million, but within a few years it soared to $290 million. The MPI board and CEO who were decision makers on Project Nova are no longer in place. Jatana was hired in February 2024 and shortly after put a pause on Nova to get a better understanding of it. In January 2025, she noted $162 million had already been spent, but only two of Nova's four phases had been completed. At Nova's peak, close to 200 staff and close to 300 consultants worked on it. Now it's closer to 50 and 50, Jatana said. Consultant contracts ended while staff were shifted to other projects — there were no layoffs, she said. "There was ineffective governance — critical business requirements were overlooked, significant changes in MPI leadership, a global pandemic and a historic strike. These factors have led to delays and cost overruns with many starts and stops," she said Thursday, recapping what the review had found. "It is evident that our aspiration did not meet our capacity, nor our capabilities. Simply put, the project timelines were unrealistic." Finance minister wants audit The MPI announcement comes a day after Minister of Finance Adrien Sala sent a letter to Auditor General Tyson Shtykalo, requesting an audit of the decisions and management of Project Nova. If the project were to be completed, the updated cost projection was $452 million, according to Sala's letter, a copy of which was obtained by CBC. The two completed phases only constitute about 30 per cent of the project's scope, and only $46.5 million of value has been derived from it, according to the letter. An organizational review of MPI by the Treasury Board Secretariat, conducted in 2023 with a final report released in January 2025, identified issues including concerns around the selection of the Nova software, terms of the vendor contract and irregularities in contract practices, according to Sala's letter, which says MPI will be paying for software licences for years, despite the software not being used. According to Jatana, MPI is locked into contracts for about $88 million over the next seven years. Of that, $68 million is considered "no value." However, MPI is in discussions with vendors and "hopeful and optimistic" the contracts can be renegotiated to mitigate those costs, she said. Given the losses, there is value in a review that will inform future technology acquisitions, accountability and governance, even though the board and management behind Project Nova have been replaced, Sala's letter said. Jatana said the corporation will co-operate fully with any audit process and looks forward to the results. Aging technology still needs to be replaced: CEO While reviewing the past mistakes will help identify things to avoid in the future, the need to replace MPI's aging technology still exists, Jatana said. She also said the previous board and management failed to create a path forward for the corporation's other IT needs, which are equally outdated. The new board and management have studied what the next phases of Nova were expected to provide, and have done a thorough review of all other IT needs "to create a rolling five-year IT road map," she said. "This has provided a true picture of all the technological needs and allows the corporation to prioritize work into bite-sized pieces" to be done at a responsible pace, Jatana said. That approach also aligns with industry best practices, she said, and will include regular reporting intervals for accountability. MPI will break down the replacement needs for its systems into stand-alone projects with "reasonable timelines" of 12 to 24 months, said Jatana. A close-out report for Project Nova is coming, and will identify how much money was spent on work that has no value and will need to be written off, she said. Jatana insisted the wastage would have no impact on future insurance rates. "We have taken a hard look at what went wrong and we have implemented strategic changes to get us back on track," she said. The five-year roadmap is well thought out by a leadership team that is listening to experts, said MPI board chair Carmen Nedohin. One of the most important pieces is the governance behind it, which comes with clear decision-making accountability, she said.
Winnipeg Free Press
3 days ago
- Business
- Winnipeg Free Press
NDP asks auditor general to probe failed IT project at Manitoba Public Insurance
The NDP government has asked the provincial auditor general to probe Project Nova, the doomed technology project undertaken by Manitoba Public Insurance. In a letter to auditor general Tyson Shtykalo, which was obtained by the Free Press, Finance Minister Adrien Sala stated that after spending $165 million on Nova, most of the promised features — including full online access for Autopac customers — remain unfulfilled. Manitoba auditor general Tyson Shtykalo. (File) Manitoba auditor general Tyson Shtykalo. (File) Sala stated in his letter that an internal government review identified a number of 'concerns' about MPI's management of Nova. 'A review by Treasury Board Secretariat identified concerns about the selection of the software and the system integrator, terms of the vendor contract and irregularities in contract practices,' Sala wrote. 'In addition, MPI is expected to continue paying software licences that will not be used in the future years.' If Shtykalo decides to do a deep dive on Nova, he will be examining one of the most costly and controversial projects undertaken by a Crown corporation. First announced in 2020 at a cost of $107 million, Nova was supposed to allow Autopac and commercial customers to renew or amend insurance policies and driver's licences online while providing connections between MPI and repair shops to speed up claims processing. All of these new features, former MPI CEO Eric Herbelin said, would be offered within three years. However, in less than 24 months the cost of the project had risen to $290 million and the timeline was extended to five years. At the same time, concerns arose about costly untendered management contracts and the hiring of hundreds of additional staff in contravention of a government-wide hiring freeze. In the spring of 2023, the board of MPI fired Herbelin after an internal performance review. In March, current CEO Satvir Jatana announced the total price tag to complete Nova had risen to $435 million, or 50 per cent more than the previous estimate. As a result, Jatana said all work on Nova had been terminated. In May, MPI disabled one of the few parts of Nova that had become operational because it wasn't functioning properly. JOHN WOODS / FREE PRESS FILES In March, CEO of Manitoba Public Insurance Satvir Jatana said all work on Nova had been terminated. JOHN WOODS / FREE PRESS FILES In March, CEO of Manitoba Public Insurance Satvir Jatana said all work on Nova had been terminated. Jatana and other senior MPI officials will confirm the audit and discuss its consequences at a media event on Thursday. In the letter, Sala noted the treasury board review concluded that of the $165 million spent to date, only '$46.5 million of value was derived from the project.' The letter did not elaborate on which parts of Nova were up and running. The idea of having the auditor general examine Nova was raised last month by the Consumers' Association of Canada. On May 21, the Manitoba branch of the association wrote to Shtykalo asking that he undertake an audit 'to prevent repetition of past mistakes by MPI and other public institutions and to complement the Public Utilities Board's protection of Manitobans' interests in setting auto insurance rates.' The association had previously criticized MPI for using reserve funds normally dedicated to lowering Autopac rates to help pay for Nova cost overruns. The request for a full audit was made under Section 16 of the Auditor General Act, which states that the auditor general may, by request from the minister of finance or lieutenant governor in council, 'examine and audit the accounts of a government organization, recipient of public money or other person or entity that in any way receives, pays or accounts for public money.' The act says the auditor general 'is not obliged to do so if he or she is of the opinion that it would interfere with the primary responsibilities of the auditor general.' If an audit is undertaken, findings will be reported to the minister who requested the review and to the minister responsible for 'any government organization concerned.' If the auditor finds it to be in the public interest, a report can be submitted to the legislative assembly no later than 14 days after it is provided to the minister responsible for the government entity. The office of the auditor general not only reviews government financial accounts on an annual basis, it is also empowered to examine the finances and operations of any entity operated and funded by the province. Although unusual, it is not unprecedented for the auditor general to delve into the activities of a government entity or Crown corporation at the request of a government minister or MLA. In 2021, Shtayko investigated allegations made by the NDP, which was in opposition at the time, that former premier Brian Pallister had interfered with the management of Manitoba Hydro. However, no report was produced from that probe. Dan LettColumnist Dan Lett is a columnist for the Free Press, providing opinion and commentary on politics in Winnipeg and beyond. Born and raised in Toronto, Dan joined the Free Press in 1986. Read more about Dan. Dan's columns are built on facts and reactions, but offer his personal views through arguments and analysis. The Free Press' editing team reviews Dan's columns before they are posted online or published in print — part of the our tradition, since 1872, of producing reliable independent journalism. Read more about Free Press's history and mandate, and learn how our newsroom operates. Our newsroom depends on a growing audience of readers to power our journalism. If you are not a paid reader, please consider becoming a subscriber. Our newsroom depends on its audience of readers to power our journalism. Thank you for your support.
Winnipeg Free Press
26-05-2025
- Business
- Winnipeg Free Press
MPI hits pause on part of tech overhaul
Manitoba Public Insurance will temporarily disable one of the only working parts of its abandoned Project Nova technology system because it is causing so many problems for its customers. In an email to staff members, MPI chief executive officer Satvir Jatana said the Crown corporation has decided to shut down the computer program, used for special risk-extension renewals and new policies for commercial customers, and return to the paper-based system it previously employed. 'We have identified a number of issues and our teams have been working hard to resolve these issues for our internal teams and our broker partners,' Jatana said in the email sent last month and obtained by the Free Press. 'Despite our significant investments in time and resources, especially in recent months, to move this work forward, we have not seen the improvements that we anticipated. It has become clear that attempting to fix the system while working in it is not in the best interests of our teams, our broker partners or our SRE customers. MIKAELA MACKENZIE / FREE PRESS FILES Manitoba Public Insurance will temporarily disable the computer program used for special risk-extension renewals and new policies for commercial customers, and return to the paper-based system it previously employed. MIKAELA MACKENZIE / FREE PRESS FILES Manitoba Public Insurance will temporarily disable the computer program used for special risk-extension renewals and new policies for commercial customers, and return to the paper-based system it previously employed. 'Given these ongoing issues, we have made the decision to revert back to the legacy system.' Jatana said the switch will begin June 1. Project Nova was first announced in 2020 at a cost of $107 million. It was expected to be completed in three years. Officials promised Nova would bring MPI into the 21st century in terms of digital technology, allowing its customers to renew or amend auto insurance and driver's licences online. It was also supposed to provide seamless connectivity between MPI and repair shops. Within two years, the timeline and project costs expanded to five years and $290 million. While the project's costs were exploding, then-CEO Eric Herbelin was awarding himself and others bonuses and spending more than three months away from Winnipeg on business trips. He also oversaw a massive hiring spree, adding more than 400 new staff members without a clear idea of what they would be doing. He announced that the first phase of Project Nova had been implemented on Jan. 25, 2023, declaring it would 'ultimately improve customer experience.' MPI's board dismissed him three months later. Sundays Kevin Rollason's Sunday newsletter honouring and remembering lives well-lived in Manitoba. Project Nova had been budgeted to cost $107 million when it was announced in 2020, but that price tag had swollen to $435 million earlier this year. The corporation announced in March it was abandoning the project after acknowledging it had already spent $162 million. Special risk-extension policies are purchased by owners of vehicles ineligible for basic or extension insurance, including commercial trucking firms. MPI administers about 13,000 SRE policies. Aaron Dolyniuk, executive director of the Manitoba Trucking Association, said the problems with MPI's computer system for SREs has made it difficult for companies to make financial plans. 'Has our industry been impacted? Absolutely,' Dolyniuk said. 'The challenge that most of our members have had with it is renewals being delayed and not knowing what they're going to pay. It makes it hard to manage cash flows when things become delayed.' Dolyniuk said it is especially hard for companies at a time when trucking is being impacted by American tariff threats and tightening margins. 'Nobody went bankrupt because of this, but the challenge has been the uncertainty,' he said. JOHN WOODS / FREE PRESS FILES In an email to staff members obtained by the Free Press, MPI chief executive officer Satvir Jatana said the Crown corporation will stop usuing one of the only working parts of its abandoned Project Nova technology system because it is causing so many problems for its customers. JOHN WOODS / FREE PRESS FILES In an email to staff members obtained by the Free Press, MPI chief executive officer Satvir Jatana said the Crown corporation will stop usuing one of the only working parts of its abandoned Project Nova technology system because it is causing so many problems for its customers. Grant Wainikka, CEO of the Insurance Brokers Association of Manitoba, said the system issues have made things challenging for both brokers and their clients. 'It has been difficult to deliver customer service,' Wainikka said. 'It has been difficult to communicate that coverage is in place and to communicate price increases from MPI. Many of the problems are because of the computer system that was put in place.' Matt Wiebe, the minister responsible for MPI, called it another example of mismanagement at MPI during the previous Tory government. 'For years, we saw the mismanagement at MPI and, of course, Project Nova has been a highlight of that — or a lowlight,' Wiebe said. MPI spokesperson Tara Seel said the switch to the legacy system is temporary. She said about 6,000 policies will be moved back to the old system; 7,000 policies hadn't been transferred yet. 'Once the new platform is fixed, policies will once again migrate to the new digital system,' she said, adding she didn't know when the work would be completed. Kevin RollasonReporter Kevin Rollason is a general assignment reporter at the Free Press. He graduated from Western University with a Masters of Journalism in 1985 and worked at the Winnipeg Sun until 1988, when he joined the Free Press. He has served as the Free Press's city hall and law courts reporter and has won several awards, including a National Newspaper Award. Read more about Kevin. Every piece of reporting Kevin produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press's tradition, since 1872, of producing reliable independent journalism. Read more about Free Press's history and mandate, and learn how our newsroom operates. Our newsroom depends on a growing audience of readers to power our journalism. If you are not a paid reader, please consider becoming a subscriber. Our newsroom depends on its audience of readers to power our journalism. Thank you for your support.
