The digital transformation journey at the Société de l’assurance automobile du Québec (SAAQ) has proven to be a challenging endeavor for technology giants IBM and its Quebec-based subsidiary, LGS, as revealed by a company spokesperson.
During his testimony at the Gallant Commission inquiry into the SAAQ’s technological modernization setbacks, IBM project manager François Dupont-Champion shed light on the issues surrounding the SAAQclic platform and the CASA IT project, managed by LGS.
Commission prosecutor Marie-Claude Sarrazin questioned Dupont-Champion on the financial gains for IBM and LGS from the CASA project. While acknowledging a positive gross margin, Dupont-Champion highlighted that the net margin did not translate into overall profitability for LGS after accounting for operational costs.
The testimony underscored the complexity of the project, with Dupont-Champion stating that replicating similar projects would lead to financial challenges for LGS.
Specific figures detailing the profit margins for IBM and LGS in relation to CASA were not disclosed during the hearing.
Initially awarded a $458 million contract in 2017 alongside German software publisher SAP, LGS faced escalating costs attributed to project complexities. The Auditor General of Quebec estimates that the total budget for the CASA project, combining internal SAAQ resources and the framework contract, could exceed $1.1 billion, doubling the initial projection.
