HMRC signs cloud-focused £4.4m mainframe management and modernisation deal with Kyndryl

HM Revenue & Customs (HMRC) has signed a £4.4m, 15-month mainframe management contract with IBM spin-off Kyndryl that will support the government tax agency with migrating more of its IT infrastructure to the cloud.

HMRC is in the midst of a multi-year migration of its applications and workloads to the public cloud, with the department renowned for being a heavy Amazon Web Services (AWS) user, having signed a three-year deal with the firm worth £94m in April 2021.

It has now signed a contract, via the G-Cloud procurement framework, with IT infrastructure services provider Kyndryl that will run until the end of September 2024 in support of its ongoing move to the cloud.

“With a significant mainframe estate, HMRC is looking for efficient and low-risk routes to migrate applications and eliminate technical debt,” said Kyndryl in a statement. “The new deal, worth £4.4m over 15 months, represents the first time that HMRC has directly contracted Kyndryl through the G-Cloud framework.”

The deal marks a continuation of a long-standing technology tie-up between the two organisations, with Kyndryl being called upon in this instance to manage a proportion of HMRC’s mainframe services, while also providing consultancy on how the department should approach modernising and migrating these workloads to the cloud.

The latter portion of the project will be carried out by Kyndryl Consult, which has said it plans to work in collaboration with Microsoft and the Advanced Computer Software Group’s Application Modernisation Practice to figure out a roadmap that will shape HMRC’s digital operations over the coming decades.

Meanwhile, Kyndryl’s Core Enterprise and zCloud practice will be responsible for fulfilling the mainframe modernisation portion of the project. “As with all of Kyndryl’s partnerships, this work will involve an embedded approach, with Kyndryl and HMRC staff working collaboratively towards an effective and successful set of outcomes,” the company statement added.

John Chambers, Kyndryl UK and Ireland president, added: “Kyndryl is thrilled to sign its first direct contract with HMRC to support HMRC’s strategic aims of administering tax systems in the simplest, most customer-centric and efficient way. The agreement underpins our continued commitment and focus to support the UK’s public sector and to drive better outcomes for UK citizens.”

As previously reported by Computer Weekly, HMRC’s commitment to investing in the maintenance of its legacy IT has seen it come under fire in the past from the Public Accounts Committee, who called on the agency to spend more on modernising its systems in early 2021.

The committee ruled that HMRC was spending too much time patching up its legacy IT and should be investing in its modernisation, which – in turn – was putting HMRC’s operations at “significant risk”.