How to commence the IT
Modernization Process?
Tony Lester
August 2011
1
Purpose of Presentation.
In this presentation, we will discuss:
1. Options and design of appropriate
computerization strategies,
2. What implementation steps are involved,
3. International and Regional IT trends for tax
administrations.
2
Introduction.
• Adoption of modern “business” processes supported
by IT:
– improves efficiency,
–
improves effectiveness and,
–
improves public transparency of modern tax administrations.
• Improving IT capacity and capability is a critical
strategic goal for tax administrations.
• Tax administrations recognise IT spend may need to
increase.
3
How best to modernize IT?
• Create a “ Business” led rather than a technology
driven culture.
• Support this culture by creating a Business Strategy.
• Identify what business processes need to be reengineered.
• Identify appropriate “ Change Champion” to lead
future development.
4
Preparing for the Cost of
Modernisation
• Start thinking about funding early
– Cost of implementation
– Cost of support and maintenance, sustaining the
technology
– Donors will not fund ongoing costs.
– Communication, change management
– Cost of peripheral (non-core software) licensing
– Disaster recovery (may double your costs)
– Staff training in how to use the new systems.
5
Pre-Requisite Skills
• Project Management expertise at least for core
project team
– The more the merrier
• Procurement and Contract Management skills are
essential for the PM team
• Change management, communication
• Business analysis, particularly for Business people
involved with the project
• Technical documentation skills
– Clearly defined system specifications.
6
Project Governance
• Leadership with business?
– A fairly new trend; build ownership within the
business units
– IT should not own / control the direction the systems
should take
• Must engage Senior Executives, must be involved
in implementation planning and execution
control
• There will most likely be a need to change the
organisation structure
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How best to modernize IT (contd)
• Governance is key:
-- Project Office
-- Business led
-- Risk management
-- Timeframe/milestones
-- Program approach
-- Allocate key resources
-- Ensure clear scope
-- Strong Steering Committees.
• Be prepared to cancel/ delay Project if necessary !
8
Options and design of appropriate
computerization strategies
• Two main approaches adopted:
– Custom Build Application software,
– Purchase of the Shelf ( COTS) products.
• Most administrations moving towards COTS solutions
vs Custom Development.
• Critical that approach is supported by an IT Strategic
Plan (ITSP).
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To buy or develop in-house
Consider the following
• Ability to create an internal IT capability
• Are the skills available in your countries and
can you compete to recruit / train / retain
them?
• Does your Administration warrant its own IT
capability?
• Cost to establish, but just as important
ongoing costs to maintain.
10
Creating an Information Technology
Strategic Plan (ITSP).
• A successful ITSP ensures IT is aligned with
“Business” needs.
• An ITSP establishes an integrated set of architecture
views for:
-- Business
-- Applications &
-- Information
-- Technology
• Results in a multi year planning and investment
roadmap and,
• Establishes the correct IT acquisition approach.
11
Components of an IT Strategic Plan.
• There are 5 steps to a successful ITSP:
–
–
–
–
–
Business Context and Architecture Vision,
A Current State report,
A Future State report,
A Transition Plan and
An ongoing Maintenance Plan.
• Underpinning these 5 steps will be some agreed key
Business Architecture Principles.
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How do you complete an IT Strategic
Plan?
• Needs to be a component of an overall organization “
Business” Plan.
– Organization needs to set future “Vision”
• Most likely will require 3rd Party technical assistance.
– proven track record of 3rd Party is key.
• Must be a joint Business/ IT initiative.
– Business buy in critical.
• It will take time– 6 to 9 months?
13
How do you complete an IT Strategic
Plan? (contd)
• Needs to be supported by a complete Change
Management program:
–
–
–
–
“Change Champion” role,
Clear communications to stakeholders,
Skill transfer from 3rd party to internal staff,
Recognises that significant training will be required to
support future IT environment.
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Outcome of an IT Strategic Plan.
• Organizations will establish:
–
a “Business” led IT roadmap for the future,
– key implementation priorities,
– future resource requirements;
•
•
•
•
People capacity,
Network capacity,
Hardware capacity,
Disaster Recovery etc.
– indicative cost / benefits will be understood.
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Outcome of an IT Strategic Plan. (contd)
• When supported by an accepted Change
Management Plan, the whole organization is
involved.
• Will answer the “ Build Vs Buy” question.
• For some countries, the ITSP can establish a specific
direction, e.g. Upgrade / Buy Off-the-Shelf Product
etc.
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So what are the International and
Regional Trends?
• International trends are fairly consistent.
• OECD is leading work on the establishment of a
“Common Tax Reference Model”.
• There are common technology solutions to Tax
administration functions.
• Leading Tax Administrations aim to leverage “Legacy”
information and systems.
• Leverage occurring via use of COTS solutions.
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So what are the International and
Regional Trends? (contd)
• Most commons COTS solutions are:
– Oracle and IBM for business solutions,
– SAS mainly used in reporting requirements.
• Success of these developments rely heavily on
“Business” involvement.
18
So what are the International and
Regional Trends? (contd)
• Pressure to implement cross functional or enterprise
systems (e.g. Tax + Customs)
– Client pressure for improved service
– Desire for uniform functionality across tax types
– Economies of scale
– Managing support contracts easier (minimal
number of vendors to manage)
– Opportunities for government to implement
“Shared Services”
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So what are the International and
Regional Trends? (contd)
• Limited COTS products available that suit Pacific
Region.
• Entry level expenditure for ORACLE, IBM etc.
products too high
• Use of mobile telephony to enhance service
• Significant effort required to review Tax Legislation
for the advent of E Services.
• Greater collaboration occurring in a number of
countries.
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Summary
• IT is the cornerstone for modernizing Business
Processes.
• IT Capacity & Capability critical goals for all.
• Needs to be “Business”, not IT driven.
• Governance is critical.
• Develop an ITSP to establish how to modernize.
• Buy vs Build seems to be the strategic view.
• Create a successful Change management program to
help success.
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