SAP specialist appointed to $1.5 billion tax transformation project

New Zealand tax department denies SAP is favoured for the biggest IT project in New Zealand history.
Written by Rob O'Neill, Contributor

An SAP expert, Pickard Consulting, has been appointed as lead solutions and applications architect to the massive NZ$1.5 billion Inland Revenue Department transformation project.

Pickard Consulting describes itself as a “small, focused consulting firm that specialises in the design, delivery and management of SAP based solutions across Australia and New Zealand.”

“We work with our clients to develop practical SAP based strategies that capitalise on the opportunities presented by today’s complex and uncertain economy to deliver high performance,” the company’s website says.

Pickard Consulting also operated a blog, not updated since 2010, called “Leading SAP projects”. Principal Jonathan Pickard's LinkedIn profile also emphasises SAP experience:

“Jonathan started working in the SAP field in 1995 and has implemented projects in retail, consumer products and manufacturing industries. Jonathan has held SAP leadership roles at PWC, IBM and Accenture and has worked for a number of niche SAP players.”

Pickard will be paid $1.25 million to $1.5 million through to the end of the contract’s term in December 2016.

IRD said the appointment does not indicate SAP is favoured to provide the tax office’s planned core platform replacement.

In a statement, the department said it has “extensive external independent auditing” in place to ensure decisions are considered and appropriate.

“Our Business Transformation Programme has been deliberately broken into a series of stages. This will help us ensure that we have an opportunity to monitor and re-evaluate at the conclusion of each stage.

“Inland Revenue has recently employed a team of people with a wide range of expertise to assist us in market analysis of relevant and possible commercial off the shelf solutions (COTS). The market analysis is to evaluate existing options, not to make recommendations to meet our design requirements.” 

The department said requirements will be developed based on an “agnostic” assessment of pain points and capabilities.

“Selection of any COTS will only be made once the requirements aspect of the design phase has been completed by a collaborative process with the design partner and our extended team.”

Local industry participants have been expressing concerns about the level of New Zealand industry participation in the project.

Paul Matthews, chief executive of the Institute of IT Professionals, said he wouldn’t want to draw conclusions based on one appointment”.

“However there is a strong risk that the bulk of the project will end up with a small number of large overseas vendors, which would represent a massive lost opportunity for New Zealand,” he said.

“While we’re not advocating anything more than a genuinely even playing field, the flow-on benefits of keeping this project in New Zealand – both financial and in terms of industry development – are significant.

“We certainly hope this appointment isn’t a sign that New Zealand providers aren’t going to get a look in.” 

Don Christie, founder and director of Christchurch-based open source specialist Catalyst IT, expressed his concerns about potential "supplier capture" of the process.

“I don't see how IRD is going to do Agile and transformation using SAP,” he said. “Plus, as far as ‘future proofing’ goes it would guarantee a long term maintenance and change profile that will be extra-ordinarily expensive.” 

IRD said it is not currently at the stage where system requirements are being decided and any decisions about the purchase and deployment of government software will be made by a governance board.

“At that time the board will be presented with a range of options to allow them to make a balanced and considered decision. No individual employees have voting rights for this level of transformation and investment,” the statement said.

Pickard did not return calls and emails asking for comment.

SAP's tax management platform was  implemented at HM Revenue and Customs in the UK. Capgemini was the lead consultant in that project and has also been providing “high level diagnostic” work to IRD in the early stages of its project.

Both the New Zealand’s IRD and the Australian Taxation Office already use SAP for back office administration.

Another consultancy. Padraig Technology Consulting, has been appointed on the same pay and for the same period to the transofrmation programme as technical and architecture lead. 

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