HM Revenue & Customs has cut the cost of an IT upgrade by up to £50m by awarding a contract to a start-up IT company, rather than a major systems integrator.
HM Revenue & Customs (HMRC) chose a small Redmond-based company to upgrade HMRC from Internet Explorer 6 to IE9, after large IT suppliers were unable to offer a cost-effective solution.
US start-up Browsium is able to complete the work for £1.28m, compared to quotes from £35m to £50m or above from large system integrators, CIO Phil Pavitt, revealed last week.
The contract will act as a proof of concept for other government departments facing similar upgrade problems.
“We have a problem moving from IE6 to IE9, like most big government departments, and most of the FTSE100 in fact,” he said speaking at Computer Weekly’s CW500 club for IT leaders. “It's not cheap to change that and we have been searching for the answer for years,” he said.
With Microsoft ending support for IE6 and Windows XP in April next year, HMRC is under pressure to upgrade its infrastructure.
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But Pavitt said he was unable to get a clear answer from HMRC's existing IT partners in the Aspire consortium, Capgemini, and Fujitsu, when he approached them about the problem.
“We approached our framework builder, Aspire, twice in the last 12 months, and were turned away,” he said.
The problem was there was little incentive for the suppliers to complete the work cost effectively, under HMRC’s framework contract, Pavitt revealed.
“There was probably no money in simplifying IT for our supplier because that’s not what we had asked them, and that’s not how they were driven,” he said.
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HMRC, which has generally favoured framework contracts with large systems integrators, had some initial concerns about using an SME to complete a major project on the UK's tax infrastructure.
“'Dear Chancellor, I went with an SME, sorry about the income today,' would not be the e-mail you would want to write,” Pavitt said.
HMRC has mitigated the risk by asking Browsium to team up with a second company, CDG, to provide an extra layer of backing and financial security.
“We can ask them to nestle into another organisation that can provide the assurance and the cover. Not a giant framework like we had in the past,” he said.
Browsium plans to begin a pilot programme at HRMC, covering between 15 to 20 applications, in the next few weeks.
"We approached our framework builder, Aspire, twice in the last 12 months, and were turned away"
Phil Pavitt, CIO and director general for change, HMRC
HMRC put the project out to tender in January and considered a number of technical alternatives before selecting Browsium.
Rather than re-develop HMRC’s legacy software, Browsium will develop customised plug-ins for the latest versions of Internet Explorer, making them backward-compatible with HMRC’s IE6-based legacy systems.
The project will open the way for other modernisation programmes in HMRC, including upgrading from Windows XP to Windows 7, and developing cloud and software as a service applications.
“By continuing to run IE6, HMRC was prohibited from adopting other services and limited in what it can do to drive innovation,” said Matt Heller, CEO and founder of Browsium.
“IE6 is now well over 10 years old. It was built for a web that does not know about social media. The design was very trusting of content that came into the browser, so you could easily have security problems,” Heller said.