SAAQclic far from profitable for IBM and LGS: Gallant Commission testimony

The digital shift at the Société de l’assurance automobile du Québec (SAAQ) has been far from profitable for IBM and its Quebec subsidiary LGS, according to a company representative.

IBM project manager François Dupont-Champion testified Monday morning before the Gallant Commission, which is investigating the failures of the SAAQ’s technological transformation, including the SAAQclic platform.

He was questioned about the profit margins generated by IBM and LGS, which was the integrator for the SAAQ’s IT project called CASA (Carrefour des solutions d’affaires).

Did the multinational and its Quebec subsidiary ultimately profit from CASA, asked commission prosecutor Marie-Claude Sarrazin.

Yes in terms of gross margin, but no in terms of net margin, replied Dupont-Champion.

“If I understand correctly, it didn’t cost you more in resources than what you paid because you generated a gross margin. You covered all your direct costs. But you didn’t generate enough profit to cover the other operating costs of LGS,” summarized Sarrazin.

“Indeed, if we did all our projects like that, we would go bankrupt,” corroborated Dupont-Champion, who worked on the development of SAAQclic, among other projects.

No figures on IBM and LGS’s profit margins associated with CASA were disclosed during his testimony.

LGS, together with German software publisher SAP, was awarded the $458 million framework contract in 2017. This amount has since increased, mainly due to difficulties encountered along the way. The total budget for the CASA project—including the SAAQ’s internal resources and the framework contract—could amount to at least $1.1 billion, or about double the initial amount, according to calculations by the Auditor General of Quebec.

–This report by La Presse Canadienne was translated by CityNews