Scapegoating Your Saviour

How Microsoft Took Over the Government's Bank

The Business Development Bank of Canada is a financial institution wholly owned by the government of Canada. BDC plays a leadership role in delivering financial and consulting services to Canadian small business, with a particular focus on technology and exporting.

Mission Statement, Business Development Bank of Canada

I was not surprised when I got a call from the Federal Business Development Bank (now the Business Development Bank) enquiring if I was interested in bidding on another project. I had previously successfully completed a small application in ZIM for them. The bid had to be submitted within a short period of time because the work needed to start almost immediately if the Bank had any hope of meeting a Parliament-imposed deadline.

The Bank not only provided loans to business but also consulting services. This consulting business, surprisingly for a bank, still operated under the cash accounting method when I got the call. For those not familiar with cash accounting, it is the practice of recording expenditures when they are paid and payments when they are received.

Very few businesses operate this way and if you are a corporation you must use the accrual accounting method. The Bank had to switch to accrual accounting for its consulting services before the next fiscal year, which was about eight months away.

Under accrual accounting, expenditures are recorded when incurred and revenues when earned. The bookkeeping for accrual accounting is slightly more complicated than cash accounting and we had to design and implement, from scratch, a system that needed to be installed on computers in 70 or so branches across the country before the beginning of the new fiscal year. A tall order but not impossible with ZIM, and the Boreal Shell.

The Bank had fallen into the paralysis through analysis trap in anticipation of the changeover. It had consulted so much on what needed to be done that it literally had over one thousand pages of analysis and no implementation strategy, and there was this deadline. What to do?

We agreed to ignore the volume of paperwork and simply adopt a rapid development method that involved teaming one or more domain experts with a development team and to start development almost immediately. Based on my previous work I already had a good understanding of the architecture of the system.

The primary domain expert would be the manager of a branch in Nova Scotia. He was an expert in his field, enthusiastic and a pleasure to work with.

The operational project manager would be Carole Paiement, an employee of the Bank. I would be in charge of the development e.g. design and programming, and Gerry who had recently joined my company would look after all training aspects and documentation. The project was called MSBOS for Management Services Branch Operating System.

The first sign of trouble was at my first meeting with the Director of the division that had overall responsibility for MSBOS and his boss, the Bank's Vice President of Informatics.

The Vice President had just returned from being wined and dined by Microsoft at its Redmond, Washington headquarters and was convinced that the Bank should now be a Microsoft-only shop. He made no bones about this at our meeting, including that he was against the choice of ZIM over an early version of Microsoft Visual Basic of all things.

The meeting quickly degenerated into a shouting match between the Vice President and his Director who tried to convince his boss that there was no way to meet Parliament's deadline without ZIM. Not an auspicious beginning. It would only get worse.

I had been assured, when I accepted to bid on the MSBOS project, that I was going to be assigned an experienced ZIM programmer with whom I had worked with in the past and whose knowledge and work ethics I valued. It was not to be. This was a serious setback considering the tight deadline.

To mollify his vice president after our meeting, his director had agreed to assign Alain to a pet project of the Vice-President using Visual Basic. Allain, who had never worked with the product before, would be leaving on a Microsoft sponsored course and when he returned would begin building a computerized questionnaire to be delivered at the same time as the much more complex MSBOS.

 Then came the next surprise. We were not going to build a strict accrual accounting system but a system that took into account the so-called political reality. The financial statements produced by MSBOS could not show a profit or a loss for any reporting period. The explanation given was this: "if a Conservative government was in power the Bank risked being criticized if they showed a loss in their operations; if a Liberal government was in power they risked being criticized for gouging Canadians if they showed a profit."

A questionable explanation, but I was not there to question the Bank’s way of doing things, I was there to build a system that the Bank's accountants had given their blessing.

To meet this additional requirement, special accounts were set up to allow branch managers and Headquarters to move money in and out of revenue and expenditure accounts before any reporting period. To do this and to maintain some adherence to basic accounting principles was not an easy task, but I believe we did it.

The development of the system was one of those gut-wrenching projects where you work so many hours and so many days that you lose track of time except for the number of days, the number of hours to the next deadline. Saturdays and Sundays were just another long workday. But we were making progress and meeting most of the deadlines and that was a reward in itself. The long hours did not mean more money for my company Boreal Informatics. This was a fixed price contract, you worked the long hours because you hated the idea of failure.

Then came the time to train the users; not only in the to use of the system but in basic principles of accrual accounting. The Bank, in what normally would have been a sound decision, opted for training the branch managers. They would be rotated through Montréal for training and would, in turn, train their staff when they returned to their branch.

Big mistake!

My company was also responsible for training and for this part of the project I had a gifted communicator, Gerry. I thought he was exaggerating when he told me that after the first training session, the majority of branch managers were against the introduction of the system. Two of the reasons put forward for their intransigence:

1. it was an intrusion by headquarters into branch operations;

2. accrual accounting was going to add to their workload.

I attended the next training session to see for myself. Some managers just sat there, arms across, staring straight ahead and refusing to answer any questions about whether they understood the new system. One branch manager was asked about his understanding of MSBOS. He replied. “I told you,  I don’t care, so don’t ask me again.”

I met with a senior vice president with overall responsibility for branch administration and told him what I had seen and heard.

He said not to worry, they were professionals and would do what they were told.

It was early morning on April 1 when the final modifications were sent electronically to all branches across Canada at about four in the morning. A few hours later the phones started ringing. In my estimation, maybe one third of the managers had trained their employee adequately, the other two thirds, less than adequately, or not at all.

With the phones ringing of the hook, more people were hired to handle the help desk. branches that had mastered the system were asked to help the branches in their regions by-passing the branch managers that had not done the the job they were asked to do. Disaster was averted but just barely, and then the finger-pointing began.

It was easier to blame the choice of ZIM which had saved the Bank's bacon then the branch managers and the vice president who tried to sabotage the project. This is what the Bank did, opening the door ever wider for Microsoft.

The vice-president who had put the obstacles in our way was allowed to retire early, the director whose choice of ZIM had ensured that the bank met its commitment to Parliament was not afforded the same luxury.

The VP's pet project came in a year late and cost about five times the budgeted amount—about a million dollars over budget. Nonetheless, ZIM would be abandoned in favour of Microsoft.

I met with Carole about a year later to talk about the implementation from Hell and what she was doing now. ZIM had just released its first version of ZIM for Microsoft Windows, was the Bank interested?

No, she said. She would love to use ZIM again but Microsoft was now well established at the Bank and there would be too much resistance to not using Microsoft products. She reminded me about that little project for the Vice President in Visual Basic, the extraordinary amount of time it had taken to finish, and the fantastic cost overruns.

She also volunteered that working with Microsoft products was so expensive and took so much time and so many people that she now had more money and more staff then ever before. Because it was Microsoft, she said, nobody questioned her need for more money or more resources. It was a lot less stressful and she was happy.

After talking to Carole, I met with the Bank's new Vice-President of Informatics who had come over from the Bank of Montréal. We talked about the Microsoft takeover of the government's bank.

She said that this was strictly a business decision. I did not ask her how getting less return for your investment was a sound business decision. But I did mention that the computerization at the Bank was done courtesy of a multi-million dollar grant from Parliament and considering the mandate of the Bank to help Canadian businesses, was it right for the Bank to exclude Canadian technology.

She asked me to leave her office.

After the implementation, the Bank did throw a party for the entire development team and gave each of us a tee-shirt on which the following words were written. I still have it.



Impossible deadlines

Splitting headaches

Days that never seemed to end

Nights without sleep





No truer words have ever been printed on the back of a tee shirt.

Bernard Payeur, Boreal  Informatics