Tax office embarks on NZ$1.5 billion IT transformation

The eye-watering bill is as much as the New Zealand government invested in its nationwide Ultra-Fast Broadband network rollout.
Written by Rob O'Neill, Contributor

New Zealand Revenue Minister Todd McClay yesterday kicked off a multi-year project to update and integrate the Inland Revenue Department's (IRD) ageing technology systems.

McLay called for expressions of interest from service providers for the first or four stages of the project, the design of a new technology platform.

"This is the next step in transforming Inland Revenue into a more user-friendly agency that will allow New Zealanders to simply and efficiently manage their interactions through online services," McClay said.

In May, a media firestorm erupted after former Revenue Minister Peter Dunne said the project to replace the current FIRST system, launched in 1991, would cost NZ$1 billion to NZ$1.5 billion and could take 10 years or more to complete.

Yesterday's expression of interest (EOI) document noted the challenges that IRD is facing with its hodge-podge of creaking legacy systems, including increased risk of operational failure.

In May 2008, IRD commenced work to stabilise its ageing platform, FIRST. It became clear that the department did not have the right model or capabilities required to deliver effective services in the future.

IRD's executive agreed there was a "compelling case for change".

Currently, IRD operates a mixed IT model, combining internally owned and supported services with managed services and leasing via third-party providers.

Key applications and technology comprise approximately 1,920 back-end infrastructure assets and a core Unisys Cobol legacy mainframe environment, which has been added to and extended with each change of government policy.

In addition, there is an Oracle/Linux environment, including databases, data warehouse, middleware, and integration. SAP provides the corporate back end of ERP, Finance, and HR, among other modules.

Also present is the Oracle/Siebel Public Sector Suite and IBM Document Manager, Workflow, and Xpress Client.

Collectively, these serve over 7,000 desktop clients around the country, and 5,628 staff as at June 30.

The EOI made it clear that IRD wants to leave bespoke software development behind as much as possible by making greater use of commercial IT products.

Due to its scale and complexity, IRD's transformation project will be separated into stages and delivered over a number of years, subject to government approval at various stages. To reduce risks, each stage will consist of a number of smaller, discrete initiatives.

Features of what the department described as its "future state" included efficient self-management options for customers; smarter use of information; less transactional work and less direct contact with customers; and more automation and streamlined information flows.

Participants in the EOI are expected to be notified of the outcome of the expressions of interest before Christmas.

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