For years, digital transformation in the Canadian public sector followed a familiar script.
A department or agency announced an ambitious modernization program and engaged a third-party firm to help map the way forward. The teams started down the path with governance structures, planning models. After early momentum, costs began to climb, benefits arrived later than expected, and plans stalled before they were fully put into practice. When ownership and execution didn’t stay firmly rooted inside the organization, it became harder to sustain progress, especially amid leadership transitions and increased scrutiny.
That storyline is changing. From St. John's to Victoria, agencies are increasingly forgoing big-bang, consultant-directed change in favor of smaller, sprint-defined initiatives.2 Leaders are teaming with technology service providers to co-create solutions that can deliver results in months instead of years. The objective: helping implement change and equipping internal teams with the knowledge and tools they need for sustainable growth.
Yannick Bergeron understands the factors currently reshaping the Canadian public sector’s digital modernization arc. In the conversation that follows, the vice president and partner with Kyndryl Consult explains how government agencies can adapt to write new chapters in the transformation narrative.
Why is the public sector gravitating toward smaller, iterative modernization journeys that organizations can “own?”
Several factors are driving this shift. For starters, many large transformation initiatives simply haven’t delivered the expected benefits within their planned timelines or budgets. That’s prompting organizations to move toward more agile, incremental approaches that deliver ROI sooner.
There have also been some well‑publicized issues with large public‑sector procurements — situations where a $50 million project becomes a $150 million project without meeting its objectives.3 Leaders understandably don’t want to be associated with that type of project.
Finally, organizations want transformation that sticks. They don’t want new systems dropped in without the internal skills to operate and maintain them. They want to be active participants in the work so they can be self‑sufficient afterward.
What do timelines typically look like with an incremental model?
It varies, depending how you break down the vision. You may have 10 or 20 desired benefits, but you prioritize the ones with the biggest impact that can be achieved in three to six months.
Defining the program up front — with an understanding of the organization’s context, changing leadership and shifting priorities — is critical. If you’re already far down one path when a new administration arrives with different priorities, it’s extremely difficult to pivot. Smaller, iterative efforts make it much easier to adapt to the political and organizational climate.
Does this approach require different skill sets than traditional IT projects?
Absolutely. Purely technical modernization has limited business impact. True transformation requires understanding business processes, citizen and employee experiences, and the “art of the possible” with technology.
In Canada, much of our work has been foundational: cybersecurity, networking and, now, application modernization. But we’re increasingly partnering with clients to map business processes and rethink how work gets done, using AI where appropriate. That’s where the real value emerges.
Speaking of AI, what are you seeing in terms of adoption and maturity among your clients?
AI is definitely in the peak of inflated expectations phase. But what’s emerging now is agentic AI — AI systems composed of multiple agents, each working with specific datasets and collaborating to produce outcomes.
This is especially useful in government, where data often cannot be legally combined across departments. Instead of merging databases, each department runs its own AI agent, and only insights — not data — are shared.
The technology has matured rapidly. What’s more complex now are the legal, ethical and human considerations. How does AI fit into workflows? How do employees interact with AI? How do you enforce privacy and policy requirements?
Is AI adoption more difficult in the public sector?
In some ways, yes, because of strict rules and privacy obligations. But in other ways, it’s easier. Governments are excellent at documenting policies, which AI can ingest to understand guardrails and ensure it operates within them. Private organizations often lack that depth of documentation.
Looking ahead, what do you see as the next major shift in public sector modernization?
I don’t think we’ll see any major transformation in the public sector that doesn’t include AI as a core component. But the focus needs to be on how AI changes the way we work, not merely the size of the workforce.
We need to rethink business processes, objectives and citizen experiences, especially for people uncomfortable with digital tools. Technology is advancing faster than the human and social elements, so bridging that gap will be critical in the next few years.
How can organizations maintain the human element as technology accelerates?
We’re still figuring that out. It’s going to involve experimentation, learning from private sector missteps and working more agilely.
Think about it. If a five‑year project goes off track, that’s an expensive mistake. If a three‑month iteration misses the mark, it’s much easier to correct. That mindset is essential.
As agencies become more involved in the transformation process, how has Kyndryl adjusted the way it works with public sector clients?
We’ve moved to a co‑delivery approach, where the organization leads its own program based on its unique priorities. Our role is to provide help where it makes sense and to offer coaching, quality assurance and trusted advice.
A key element is what we call the “two‑in‑a‑box” model. We pair a Kyndryl executive or program manager with the client’s counterpart, so they jointly steer decisions and stay aligned.
We also bring lessons learned, best practices, reusable tools and industry knowledge. Experience keeps the program on track, and client knowledge keeps it relevant.
Since customers can’t simply divert half their workforce to modernization while still running operations, we supplement specific tasks with targeted expertise for defined periods. Think of it as sprints of specialized support.
What differentiates Kyndryl’s approach to public sector transformation?
Three things distinguish our company and our approach:
- Right‑sized, agentic AI‑driven transformation grounded in our own modernization experiences. Lessons learned transforming our entire application estate and SAP modernization provide real-world insights that many other companies don’t have.
- Access to a global network of practitioners with recent transformation experience across industries. Transformation teams can tap into this breadth and depth of knowledge and expertise from across the public and private sectors.
- AIOps data from Kyndryl Bridge. This platform provides patterns and insights no other provider has at the same scale. The data helps clients prioritize projects and avoid pitfalls that have hampered other projects.
You mentioned using AI internally to refine how you approach clients. Why is this important?
Every company needs to learn from its own experiences. That’s one reason clients ask for references. What sets Kyndryl apart is the depth of our AIOps data. I don’t know of another company that has captured and leveraged operational data as thoroughly. That gives us unique insight into what works, what doesn’t, and how to avoid future issues.
The next chapter of public sector transformation
The Canadian public sector is rewriting its transformation narrative in real time as agencies shift to iterative journeys that build momentum and deepen capabilities incrementally. In this framework, modernization evolves into an ongoing story, strengthening as each chapter unfolds rather than ending after a single act.
1 Canada Budget sets out plans to modernize government and create “leaner public service,” Global Government Forum, June 2025
2 Canada sets out “Digital Ambition” with focus on smarter, secure and citizen-centric services, Government Transformation Magazine, March 2025
3 Canada’s dependency on professional services firms is scandalous, Canada’s National Observer, December 2025