CIO Profile: HMRC’s Mark Hall on IT rationalisation

See also: CIO Profile: HMRC’s Mark Hall on job-sharing CIO Profile: HMRC’s Mark Hall on making tax collecting more responsive

HM Revenue & Customsdeputy CIO Mark Hall has gone through a process of embedding a more business-aligned team at the organisation and now he believes the new workforce structure allows him to enter an optimise phase.

An example of the optimisation, according­ to Hall, is the development of a new ­National Insurance and PAYE service. Previously this consisted of 12 separate databases and focused on employers and not employees, which meant that HMRC had no single view of their customer — the taxpayer.

Each customer now has one record with all their pay and tax information and their contact history with HMRC.

The new operation rep­laces a system that linked individuals to employers, and employers to tax offices. If somebody changes job or has two or more jobs, then multiple tax offices were often involved in different queries for the same individual.

“Now we have something that is customer-focused and we are able to monitor customer behaviour,” he says.

To deliver the three key objectives, IT has been driving a strategy dubbed 13 Mach­ines, which will consolidate an estate of 550 applications to 13 core platforms. HMRC identified that the 13 platforms already existed within the department and that these would support the bulk of business process requirements.

“We must re-engineer the IT to serve our requirements better so that we can segment and do business intelligence,” Hall says of the desire for a single customer view. The 13 machines will cover the core processes of HMRC: tax processing, pay as you earn (PAYE), National Insurance, VAT, benefits and tax credits.

Calendar spikes As Hall’s department implements 13 Machines, the critical role of tax collection and its increasingly IT-led processes has to continue. Just a week before we interviewed Hall the self-assessment tax deadline closed. Of the 6.9 million people who filed their tax returns online, 580,000 did so on the final day: a rate of 14 per second. “On that day we are the third busiest website in the world,” says Hall.

“We call them business events. The tax calendar is a project in its own right and there is incredible activity around them preparing our call centres and IT. On an annual basis many of these events are bigger than any company does in a year.”

Hall also manages IT operations for UK Border Agency, delivering tariff systems that, if they failed, could close a port like Dover and with it the motorway network that links the Kent coast with London.

Underpinning the bulk of IT at HMRC is SAP, which manages everything from HMRC staff to case-flow and CRM.

In the background, at least at the moment, is the government’s plans to reduce government spending. All decisions by Hall and Pavitt are made with cost reduction very much front of mind, he says.

“As part of the last government spending review we will do a lot of business change, so we have to ensure that IT aligns with that business change. 13 Mach­ines supports the cost drivers and the intelligence-based strategies.” The Coalition Government cut the HMRC budget by £125m for 2010/11 as part of the government policy to reduce public spending by £6bn. IT, Hall explains, will contribute £75m worth of savings to that £125m.

“It was a significant challenge. What we are working on has already delivered £161m in savings. We took some of those savings and invested in de-commissioning.” He breaks the savings down; £50m was saved through contract re-negotiation with suppliers, £49m through price restructuring with suppliers and £62m saved through a re-investment of that £49m saving back into IT.

“The thing that is really different and ­innovative is to not just re-invest the money, but to make a better return with it. We have done a lot of work not only with suppliers, but also on behaviour at HMRC.”