UK tax dept's IT savings created 'significant risk', technical debt as it faces difficult conversation with Chancellor
- Reference: 1605000611
- News link: https://www.theregister.co.uk/2020/11/10/hmrc_it_savings_leave_significan/
- Source link:
As the holder of the keys to the UK's treasury, chancellor Rishi Sunak, prepares his Spending Review for 25 November, the NAO said the need for HMRC IT investment should be recognised by the Treasury when it comes to dishing out dosh to major government departments.
[1]In his write-up of Her Majesty’s Customs and Revenue’s annual report and accounts (PDF) , NAO comptroller and auditor general Gareth Davies said: “HMRC has recognised that, due to the need in the past to forgo operational maintenance and upgrades to its systems to secure cost savings, its IT systems now constitute a significant risk to the Department. This will require significant investment and will need to be at the heart of any future Spending Review settlement.”
The report said that HMRC IT systems will become increasingly vital to HMRC’s ability to perform functions as it continues to aim for a fully digital tax system.
The HMRC annual report said a programme dubbed Securing Our Technical Future (formerly known as Columbus Cloud) would help address the technical debt it inherited.
“This programme is focused on remediating high priority technical debt and migrating our services out of existing data centres. However, it is acknowledged that there remains significant work to do to if we are to address the levels of technical debt identified across the estate and create a more flexible, secure and scalable IT environment,” HMRC's annual report said.
A review by consultants Deloitte recommended a 12-month “Rapid Remediation Programme” to focus on the most critical priorities.
“We continue to mature long term plans [for more than five years], initially focused on our most critical services, but [we are] ultimately seeking the fundamental transformation of our remaining core services. This will include setting out well-evidenced options for investment at the next Comprehensive Spending Review,” HMRC's accounts said.
Other plans include a new Child Benefit IT system to replace the existing one.
Meanwhile, HMRC said it has been expanding its supplier base to “take better advantage of technical innovations and keep pace with technology trends in order to support HMRC’s digital transformation and move to lower cost and highly resilient cloud services”, achieving an additional £30.7m saving by the end of June 2020.
While admiring HMRC’s cost-saving vigour, the Chancellor may be left footing the bill if he plans to ensure the agency can continue to collect around £636.7bn in tax without undue IT-related risks.
As if recognising the need for investment, HMRC is currently having nice chats with IT suppliers to reboot its technology supply chain by opening up its entire £900m annual IT budget via a new Technology Sourcing Programme (TSP), according to [2]a September tender . According to the latest accounts, the total value of IT contracts currently comes to £661m annually.
With less than two months left, let's check in on Brexit: All IT systems are up and running and ready to go, says no one [3]READ MORE
While addressing technical debt, HMRC must also cope with the challenge Brexit is throwing at it, including running the new Customs Declaration System alongside the old ChIEF system beyond the end of December 2020.
HMRC has been planning to replace CHIEF since 2013 and the new system from IBM was supposed to be up and running by January 2019. Last month, [4]it awarded Fujitsu a £168.8m contract without competition in part to ensure CHIEF — once part of the Aspire programme — could keep running beyond the January 2021 Brexit transition deadline. ®
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[1] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/932874/HMRC_Annual_Report_and_Accounts_2019_to_2020__Print_.pdf
[2] https://ted.europa.eu/udl?uri=TED:NOTICE:460113-2020:TEXT:EN:HTML&src=0
[3] https://www.theregister.com/2020/11/04/brexit_it_systems_not_ready/
[4] https://www.theregister.com/2020/10/13/fujitsu_hmrc_contract/
[5] https://whitepapers.theregister.com/
Re: A new Child Benefit IT system to replace the existing one
@Warm Braw
How do you come to believe they think that?
Re: A new Child Benefit IT system to replace the existing one
Yeah, it's called the red-headed stepchild here in America.
SDLC?
Technical debt in IT? Deferred maintenance and upgrades? For hardware maintenance, the cases need to be popped open for cleaning out the dust and what have you, hard drives need periodic defragging. This is not including replacing parts that fail. Software maintenance includes running backups, applying patches for security and bug fixes. The SDLC for government systems can be measured in decades, and is usually part of waterfall methodology. That's government thinking for you. Mission critical systems, such as the systems that handles the collection of taxes and then doles it out to the different agencies as part of their capital budget, you cannot accrue technical debt in the maintenance of those systems. You might be able to do it for awhile and get away with it, but when something fails, you got the PHB running around with his two tuffs of hair on fire.
At some point, you have to upgrade the hardware. The two most replaced items in the box due to failure (in my experience) are hard drives and power supplies. Other components such as memory do fail, but it's rare. Video cards are another item that fails, but those are seldom. Backup tapes are another thing that needs regular replacement. The budget for failed components should be factored in to the total cost of ownership, but it rarely is. How many of you work or have worked in shops where they maintain an inventory of spare parts? I've worked in a few, but when budget cuts roll down the hill, that's the first victim. When the inventory is depleted, then chaos ensues because a system is dead for several days because the parts are on order, if they are available at all. There was one IT department where the budget was so tight, the management asked the IT folks to buy replacement parts out of their own paychecks and file for reimbursement because it was faster than waiting for official channels.
In corporate America, management types get promoted to their level of incompetence. This is especially true in government. It's good to know that this seems to be the standard everywhere.
Re: SDLC?
>At some point, you have to upgrade the hardware.
I'm pretty sure a mandatory and expensive "hardware refresh" is in the terms of their Capgemini/Accenture contracts whether needed or not. I wonder if that's a clue as to who's pushing this request..
Re: SDLC?
management types get promoted to their level of incompetence. This is especially true in government.
This is especially true for big organizations, public or private. No difference here.
Fast, Cheap, Good: peek two.
Beancounters cut into IT budget and it went wrong... how it is possible? At least they learned their lesson!
“take better advantage of technical innovations and keep pace with technology trends in order to support HMRC’s digital transformation and move to lower cost and highly resilient cloud services
Maybe not.
You get what you pay for. As we say in French, you can't have at the same time the butter, the money for the butter and the creamer lady's arse.
Re: Fast, Cheap, Good: peek two.
you can't have at the same time the butter, the money for the butter and the creamer lady's arse.
If you're that well in with the dairy maid you just might (until she gets caught!).
Defer (or cost-cut) regular Tech Refresh at your peril!
> "HMRC has recognised that, due to the need in the past to forgo operational maintenance and upgrades to its systems to secure cost savings, its IT systems now constitute a significant risk to the Department".
It never ceases to amaze me how any company with a significant investment in existing IT infrastructure thinks they can save money (cut costs) by not keeping it up to date. All you do by not regularly upgrading (ideally before you near the end of the hardware and/or software support lifecycles) is punt the problem down the road. You have to do it sooner or later, and the longer you leave it, the more difficulty, risk and expense you have to deal with when you finally have no other option than to finally get on with it.
Not to mention the security risks associated with not keeping up with regular maintenance schedules.
I suppose this is what happens when the company is run by accountants who don't get the importance of IT thats fit for purpose.
Re: Defer (or cost-cut) regular Tech Refresh at your peril!
I agree where you're coming from but like to or loath it you have to consider things from the other side.
For example, the suggestion of replacing kit / software / services before nearing the end of life is clearly going to get culled by someone needing to balance the books. I understand why you'd want to do that but I also understand why someone else (who's job it is to find unnecessary spending today ) would think otherwise.
The problem is when the mantra that 'as long as it works it's fine' is taken, and we all know problems are inevitable in this instance. And that's where I am. That's where I work. A significant IT spend occurred during a two year project which concluded in 2010(!) and apart from some upgrades, scaled up provision and the rollout of 365, we're pretty much stuck where we were. Madness.
Killing maintenance budgets
@Maelstrom,
You are indeed correct that spare parts inventories are the first victim of a budget cut - assuming there was a spares budget in the first place. But over the last few years I've seen a trend where PHB read about "Just In Time" manufacturing methodologies and misinterpret the manifesto to mean that one actually saves money in an IT or other operation by eschewing minimum essential spares.
"We can get what we need through the channel! Just in time!" As the mission critical system lies silent.
Re: Killing maintenance budgets
"Just in Time!" to head to the pub, because there's F all that we can do until the parts arrive sometime between tomorrow and next month!
"support HMRC’s digital transformation and move to lower cost"
Errr...isn't "lower cost" what got them into this situation?
Misuse of English
The 'Technical debt' appears to be inability to deliver what was promised earlier. (Oh and now that's gone tits-up we have to spend more on fixes and more on work-arounds.)
Then 'technical debt' seems to mean they can't do what they've been doing. What's the reason for that? Really? Oh [shuffles papers after three months of continual prodding] here's the answer: We want to go all cloudy. That'll fix everything.
A new Child Benefit IT system to replace the existing one
For a government that seemingly believes children who choose the wrong parents deserve what they get, there's an obvious, cost-saving fix.