The service will invest 20m a year over the next three years on its Integrated Change Programme, which will use technology to crack down on fraudulent passport applications and to secure border controls.
The service plans to roll out computerised background checks on passport applicants this year, e-passports containing encrypted digital photographs from 2006 and electronic fingerprints from 2009.
The work will lead to major redevelopment of the Passport Service's internal IT system, PASS, in 2008, when the service's existing 10-year contract with Siemens Business Systems comes to an end.
The Passport Service's integrated change programme received an amber warning light from the Office of Government Commerce in its last Gateway Review.
But Herdan was adamant the service would not repeat the mistakes that dogged the agency during the last major IT upgrades in the late 1980s and 1990s.
In 1999, poor planning, inadequate testing, and a rushed IT roll-out, culminated in a backlog of 500,000 passports, and huge queues outside passport offices were shown on television news.
"There will be no big bang changing over the contractor. That is what happened in 1999. That is what we are not going to repeat," said Herdan, in an interview with Computer Weekly.
The service has introduced a policy that all upgrades will be thoroughly tested by the staff that will use them before they are rolled out more widely.
"We are now issuing six million passports a year," he said. "We have to be careful that nothing we do will have a 5% impact on productivity. That would have a serious effect on our daily output."
Having good communications is the third important lesson from the IT disaster of 1999, said Herdan. "The reason there was a crisis in 1999 was because among other things, people panicked. They saw pictures of people queuing up on television, and they could not get through to us by phone," he said.
The service has invested in an outsourced call centre, run by MTM, which handles 4.3 million calls a year.
The Passport Service has now completed the recommendations of a Gateway Review, and is confidant of a green light, said Herdan.
"There were things they said needed sorting out, around the procurement plan, the refinement of the business case and the risk registers," he said.