CIO50 2019 #21: Gary Baird, Inland Revenue

“We are in the midst of a once-in-a-generation opportunity to modernise tax administration in New Zealand,” says Inland Revenue Chief Technology Officer Gary Baird.

Baird explains Inland Revenue’s role has changed significantly over the past few decades – from a tax revenue administration to a much wider portfolio of social policy products.

“This has introduced greater complexity to our systems and processes,” says Baird. “The wider environment has changed too. New Zealand’s population is more diverse, and technology has changed people’s expectations.”

Thus, the change encompasses all parts of the revenue system, including government policy, streamlining Inland Revenue’s processes and re-organising ourselves so that we have the right people with the right skills closest to the customer he says.

He explains the transformation is about making tax and social policy simpler for all Kiwis by increasing voluntary compliance through having a simpler tax system, reducing compliance costs, particularly for small businesses, and making it easier and less costly for the government to introduce future policy change.

“Our systems and processes weren’t making it easy for people to pay their tax. We were also struggling to deliver to the government efficient and timely options to implement new tax policy.

“We knew that to be successful we had to transform our entire organisation,” he says.

Thus, the transformation programme involved improving business processes, which will make services simpler and faster for customers and their staff; and improve the quality and governance of their data.

The changes aim to make policies easier for customers, without sacrificing wider tax policy objectives such as fairness and efficiency.

There are also equally important programmes around leadership, cultural change, new ways of working, and organisational design processes; and new approaches to performance, recognition and pay, he explains.

The technology foundations for the business transformation were laid down in 2015 and 2016 and included the establishment of new data centres, network, infrastructure and security systems that can sustain the entire change programme – all utilising all of government IT common capabilities

Central to the transformation is implementing a new technology platform that underpins the tax system. The new platform is called START and will replace the current FIRST platform that has been in place for decades.

“Minimising risk and maintaining revenue collection functions during this transformation is critical”, he says.

Thus, the agency has carefully planned the programme to be delivered in four overlapping stages: digital services, tax, social policy and a final wrap up. The systems, processes and legislative settings that support taxes and entitlements are being modernised in a series of releases within these stages.

The programme is now well underway with the first two releases having been successfully implemented into Inland Revenue’s technology platform with major releases typically occurring every year aligning to the tax year in April.

The first release in 2017, enabled seamless digital services for GST. This was a significant advance as GST accounts for a quarter of the revenue Inland Revenue collects. An API gateway also extends Inland Revenue’s digital border so businesses can submit their GST returns directly through their accounting software

“For the year ended June 2018, 86 per cent of customers filed their returns electronically, up 7 per cent on the previous year and 16 per cent up on two years ago with customers reporting that it now takes 10 hours less a year to meet their GST obligations” he says.

The next release of the programme, which went live in April 2018 migrated a number of existing tax products to the new START platform (Withholding Tax, Gaming Machine Duty, Fringe Benefit Tax). It also enabled payday reporting for employers, introduced improved provisional tax mechanisms and delivered automatic exchange of information to help combat global tax avoidance.

“After this second release 32 per cent of tax revenue was being managed in the new system” he says.

“We are now up to release three, our biggest release yet affecting literally millions of New Zealanders which will look to simplify Income Tax for individuals through the implementation of payday filing, changes to investment income filing, improvements to MyIR and providing transactional information to customers”.

In addition to these major programme releases Inland Revenue has recently migrated all of its staff members to the cloud-based workplace technology solution (Office 365) and is currently implementing a number of other significant technology investments which include, the implementation of a new Information and Knowledge Management (IKM) system, investment in a new Business Intelligence and Analytics platform and selection of a new Enterprise Support Services solution for managing Inland Revenue’s finance and HR requirements.

Spotlight on the current and future workplace

Baird says the process entailed redesigning Inland Revenue around the customer and changing the way they work.

Three groups were formed, and in early 2017, there were 4,700 people confirmed in their new roles. He says frontline staff also have configured workflows, so their work is relevant to their skills and abilities.

“New delegations, combined with broader roles for our frontline people, means that customers get a better experience as we are responding to their queries quicker and they don’t need to talk to multiple people,” says Baird.

Baird says ITC (the information technology and change team) works with leadership teams across the organisation.

“This means we can provide more tailored services and respond quickly to business needs, while also educating people,” he says.

The team runs seminars and events on IT topics under the umbrella of “Experience IT”, providing updates on recent and upcoming deployments.

Engagement with the business goes both ways, says Baird.

At their monthly IT Town hall meetings, they invite speakers from other parts of the organisation to share their views on how they can work together and what their key priorities are.

Baird also ensures his team regularly visits Inland Revenue offices around the country.

“On these I often hear things I would never be exposed to had we not taken the time to go out and connect with our people,” he says.

Strengthening the ICT team

With his team, Baird says there is continued investment in DevOps and Agile training to encourage different ways of working.

This has been reinforced with Scrum Master training and certification, and an agile coach to provide on-the-job support, he says.

The team also runs regular hackathons and has implemented ‘virtual product teams’ who are empowered to self-improve their policies, processes and toolsets to deliver integrated solutions for our customers.

Baird proudly notes the team’s strong inclusion strategy.

“We have 42 per cent women in IT (40 per cent in leadership), compared to an industry average of 17 per cent,” he says.

Inland Revenue also has a ‘Women in IT’ group that champions for an inclusive and supportive work environment, he says. The group supports ShadowTech, which provides girls in years 9 to 11 with an opportunity to experience what working in the tech sector is like.

“We continue to actively use SFIA (Skills framework for the information age), an internationally recognised framework to support our people in their professional development,” he adds.

Today, over 95 per cent of his team have SFIA skills assessments, which have been validated by independent external experts.

Baird also sponsors the People Development Action Group, a network to create opportunities and awareness of personal development opportunities. The group meets weekly, and have, among others, organised Inland Revenue staff to work on secondment within government agencies.

He says these are short-term, mainly two to three week assignments, to give people experience in other branches of government.

He says the group also runs career workshops, like the ‘Build your career brand’ with LinkedIn; Gaining Career Momentum and Introducing Tai the A.I. “These sessions were fully booked within a couple of days,” says Baird.

Baird highlights the importance of communicating what they are doing across all sectors, using all available major channels, to the point of creating their own outlets to fill gaps.

For instance, the technology group holds monthly leadership sessions, and a monthly town hall session with all staff and organises webinars and video messages from the leadership team.

He points out their group’s ‘Experience IT’ is the second most popular discussion group on IR’s Yammer.

“This is changing our culture from where people say, ‘it’s IT’s issue’ to ‘it’s our issue, let’s solve it together’,” says Baird. He also publishes the CTO update, an e-newsletter that is sent out to the IT group and leaders across IR.

Lessons learned

Baird shares three lessons for a successful business transformation:

1. Involve your customers. Take time to understand how they use your business and your systems and what’s important to them. For example, Inland Revenue has seconded a number of tax agents into its business to improve how the organisation works with them and get the system design right from the start.

2. Take care of your people. Focus on your vision for the future and make it real for them. Transformation is a culture challenge. Help your people understand what they are expected to do differently. The leaders who manage those people are your best change ambassadors: make sure they have the tools, skills and information they need to help their people.

3. Simplify and standardise. Inland Revenue is moving to a commercial off-the-shelf (COTS) platform that will make implementation of new legislative policy a lot simpler in the future. Re-use what’s already available. For example, Inland Revenue obtained processes from the NSW government in Australia when developing its requirements for a new Enterprise Support Services system, only making changes to ensure compliance with New Zealand regulations.

“The benefits of living in a democracy is we get to have our say,” he adds. “Government has to consult with the public. By its very nature that sometimes makes getting some things done a little slower.”

But, he reveals what government leaders know: “We have an amazing secret weapon – each other.”

“I have found government agencies in New Zealand and in other jurisdictions to be equally passionate about their organisations and their people and are great allies in sharing their learnings and experiences.

“In the end it is not just about the technology – technology is just the enabler by which our business can deliver joined-up and innovative services for our customers, the people of New Zealand.”