Helping CMHC embrace digital transformation

The Canada Mortgage and Housing Corporation (CMHC) is one of Canada’s largest publicly traded companies. As a governmental organization, it has long been a pillar of the Canadian housing market. It exists to assist Canadians looking for housing, and also provides foundational housing market research and advice, both to the government and to Canadian homebuyers.

As Canada’s largest provider of mortgage insurance ($526 billion by the end of 2015), CMHC was an undeniable industry leader. Still, in 2014, the organization was experiencing growing pains that could not be ignored. 

Slowed down by redundant, irrelevant technology

As they told the Harvard Business Review (HBR) in 2016, “We were overmanaged. We had too many layers in the organization, and that was fueling bureaucracy and slow decision making, which we heard from folks was a problem. We also had people in the wrong places. We had people doing rote tasks, instead of value-added, skills-based, thoughtful tasks. And we needed to redeploy those people.” Additionally, an internal survey revealed that employees perceived technology as the company’s top obstacle to innovation. 

Technology had never been a strategic priority for CMHC, which led to a chronic underinvestment in the area. The company had accumulated redundant legacy systems and shadow IT that were operating in silos and weren’t integrated with the enterprise. Having taken up an enterprise-wide strategic mandate to reduce risk exposure, improve the timeliness and quality of the information it produced, and pursue greater organizational efficiency, CMHC had a multi-year transformational journey ahead.

All things considered, CMHC’s leadership team had to execute a number of organizational changes that would eliminate overly bureaucratic decision making and build an infrastructure to empower employees and promote innovation. 

Steering CMHC towards digital transformation

As the lead advisor in this transformational journey, Stem partnered with CMHC to navigate strategic alignment with leadership, vendor shortlisting, scope development with the shortlisted vendors, proposal review, proposal evaluation, and subsequent vendor selection, negotiations, and contract execution.

This process involved multiple undertakings. First, Stem developed a procurement-approved and fit-for-purpose RFI Process with informed insights on various digital disciplines, including data analytics and monetization. Next, Stem executed a tailored scope development exercise with the vendors which saved CMHC a significant amount of time (two to three months) and effort as opposed to a traditional RFP. 

Stem’s Proposal Mapping framework highlighted the unique and comparable elements of each vendor proposal, including guidance on navigating each submission. This involved synthesizing 20 business proposals into an easy-to-digest, succinct analysis for quick evaluation and assessment, thereby saving CMHC approximately 3 weeks of consideration and decision-making time. 

Overall, Stem’s work-stream-based evaluation criteria was endorsed by Gartner, and, most importantly, met CMHC’s procurement standards.

The wins for this undertaking weren’t just time-based. Stem also helped CMHC save 15% of the total deal costs by conducting competitive dual-track negotiations. Stem also assisted CMHC in mitigating contract risks by negotiating a ‘Termination for Convenience’ clause, ‘Risk Sharing Constructs’, and ‘Payment Holdbacks’ on implementation of key Transformation Projects.  

“Ashim’s intellect and the Stem team’s high standards, responsiveness and rigour were essential to CMHC’s digital transformation. Ashim was my thought partner all along. He’s an amazing listener which, combined with Stem’s thorough evidentiary inquiry, ensured a strong foundation for our choices. We could not have done it without them.”

Evan Siddall
President & CEO, CMHC

Post contract execution, Stem also spearheaded the initial implementation and collaborated with the vendor to establish the governance framework and oversight mechanisms for the services delivered to CMHC.

When asked how Stem’s work helped guide CMHC through this organizational change, President & CEO Evan Siddall said, “Ashim’s intellect and the Stem team’s high standards, responsiveness, and rigour were essential to CMHC’s digital transformation. Ashim was my thought partner all along. He’s an amazing listener which, combined with Stem’s thorough evidentiary inquiry, ensured a strong foundation for our choices. We could not have done it without them.”

Learn more about digital transformation for your organization