CIO Mark Hall on taxing task of making HMRC digital

Her Majesty’s Revenue and Customs (HMRC), has until recently had a duo of CIOs, but since January 2013 Mark Hall, formerly IT director and deputy CIO has taken the helm as CIO.

In an interview at one of HMRC’s agile meeting rooms for the IT team and flanked by two public sector PR representatives, Hall explains the changes he continues to lead and why HMRC only needs one CIO going forwards.

“I’ve had the best apprenticeship possible in my five years at HMRC,” Hall says. Prior to HMRC Hall was CTO for Severn Trent Water and head of IT services at electricity firm Eon.

“It’s a great training ground and I am very much building on the foundations Phil Pavitt put in, he is great on customer service.

“The challenges now are different; he [Pavitt] did a lot of fixing the IT. My world now is a lot more about business thinking,” he says. Hall’s remit has grown too the relaxed and personable CIO known for having a razor sharp mind is also responsible for all aspects of security at HMRC, physical and digital.

Hall reports to Lin Homer, the chief executive of HMRC who recently came in for sustained attacks from House of Commons home affairs select committee for her management of the UK Border Agency she ran before joining HMRC in January 2012.

Hall says the strategy and relationship he has with Homer is very focused on moving HMRC towards being a digital business and the department is cited as an exemplar service in the strategy of government CTO Liam Maxwell.

At the time of the CIO UK interview HMRC and Homer were reviewing whether the Whitehall department really needed a new head of change to replace Pavitt.

“All the change mechanisms for governance, investment and change management are there and they are working strongly,” Hall says.

“HMRC is increasingly comfortable with change in terms of its ability to govern and manage change. It has improved massively. There is a strong focus on the human aspect of change as the engagement is still a challenge,” he says of the common issue of people in any organisation not liking change.

“All of our offices are now campuses and we do Town Hall events so the narrative of change is quite strong now. The IT part of the change piece is where I have seen the biggest change. I have seen it mature and the link between the business and IT change is now that we are at the beginning of all conversations. So it feels a lot more like we are all equal partners,” he says of the cultural transformation HMRC has been through since Hall joined August 2007.

Returning to the theme of HMRC becoming a digital business, Hall is adamant that he will drive through a digital and data driven strategy in an organisation that is “all about people, numbers and data,” which in the past has meant paper.

“Over two hundred services are already online and we will take that further. We have a whole series of projects on PAYE, tax statements and self assessment to become digital services.

“The heart of our thinking is that technology affords us the benefit of dealing with customers digitally and in the case of business, it’s what business wants.

“We want to take a different approach, to be more agile in delivery and so we are working with the Government Digital Service,” he says of the increasing cross-departmental digital drive affecting Whitehall.

This is having a knock on effect to HMRC and Hall’s budgets too. Despite the rhetoric from the Tory-led government that its primary focus is on reducing the government deficit and the running costs of government, HMRC received a further £77 million in December 2012 to invest in the tools to tackle fraud.

This government investment follows the 2010 launch of Connect the technology that monitors data such as social networks about UK tax payers to spot fraud. The BAE Systems technology, according to the Financial Times, cost HMRC £45 million but has delivered £1.4 billion in additional revenue.

Hall wants to take technology that is proven to deliver revenue to the government further by putting the technology right into the stream of financial activity, so that HMRC can monitor fraudulent activity mid-transaction he says.

But his strategy isn’t just about catching our less than respectable citizens, he believes data is at the heart of benefitting well meaning tax payers, so the technology HMRC deploys must be central he says to a CRM and behaviour analysis based approach to know more and manage customers, as tax payers are now called.

HMRC was one of the first departments to implement a major G-cloud-based technology with the announcement in September 2012 that it is deploying Skyscape to create a centralised data storage network on the Public Sector Network. Hall explains that Skyscape means file storage is taken away from local HMRC offices and moved to the cloud as a centrally hosted service that will deliver significant cost savings.

Hall adds that the Office servers in HMRC offices nationwide are moving on to Skyscape, removing servers from those locations and securing the servers on a central hosting operation.

Hall is keen to enable consumerisation within HMRC and is already trialling the iPad in a pilot.

“We are looking at moving many users to consumer devices,” Hall says. He is open to either Apple or Microsoft consumer devices.

“Over the coming months we will be trialling and ultimately deploying a range of devices to support new working practices in HMRC. We are looking at areas where we can introduce mobile working and paperless meetings. Therefore, devices will potentially range from conventional and hybrid laptops through to tablets. In line with government policy, we are investigating a range of commodity devices and operating systems. As much as possible we are moving to an open standard and inter-compatibility.”

As part of the technology and application rationalisation that has been the core of the CIO strategy under both Hall and Pavitt HMRC introduced Enterprise Tax Management Platform, a simplified SAP platform for Stamp Duty and Land Tax in 2011. This strategy has continued with tax management moving on to the integrated platform.

“We are seeing the benefits of re-use and less integration costs. And we have seen less shadow IT as the capability has developed internally and we are seen as great at delivery and understanding the business. Speed of delivery is always a challenge. But the internal teams are becoming centres of excellence in collaboration and SAP.

“We have a process: Business Development Apps that people can develop their own spreadsheet macros on so we do encourage them to develop,” he says of his strategy towards encouraging positive shadow IT within a governance framework.

There is still a deal of modernisation to carry through HMRC Hall says.

“We are looking at how we modernise the device and desktop environment. While a new Microsoft Enterprise Agreement is all about supporting the legacy and we will have to migrate away from that. But the focus is on better IT for our staff and to continue the journey of consolidation.

“We do need to shut the legacy down and de-commission the underlying infrastructure and it is all linked to how we manage the portfolio while working towards the 2017 end to Aspire,” he says of the major outsourcing contract led by Capgemini but including BT and Fujitsu. Aspire was signed in 2004 and was one of the largest outsourcing contracts in the UK at the time. Critics have argued that the contract has robbed HMRC of skills, innovation and the deal has not integrated technology and delivery well.

“We have the IT sourcing strategy in outline and following the changed we made to the Capgemini contract last year that ended their exclusivity as the prime supplier. Rather than wait for 2012 we are moving towards in increments,” he says.

Hall admits to liking the System Integration and Management (SIAM) model for different contracts and service models and over the years that CIO has been speaking with Hall he has always advocated and acted on righting the skill sets within HMRC, which may put HMRC in a better place to land integrations itself.

“We have a strong in-house team now and we are building on that and how we can increase the resources we have.

“But it will be a mixed economy for us and it’s about re-adjusting the balance at present. Capgemini did have the innovation, we have now brought that back in-house,” he says.

That strong internal team, Hall hopes, will also see a greater mix of suppliers enter the economy at HMRC, in particular the UK’s SME providers, who he hopes can increase the agility and innovation at HMRC.

Keeping abreast of the change agenda at HMRC is on a cycle akin to the annual self-assessed tax filing. Challenges ahead for Hall and his Whitehall CIO peers is the implementation of Universal Credit, which has already attracted criticism for its high number of project owners. Universal Credit relies on close collaboration between HMRC and DWP, the industry will watch its release with increased scrutiny as a result of the rhetoric that emanates from the current government on better value for tax payers from the civil service.