On 27 February 2002 the Inland Revenue started the Aspire competition to provide technology services to the department when the current contracts run out in mid-2004.
Possibly the largest public sector technology procurement over the next few years, it will support the tax, National Insurance and tax credit systems of the UK government.
During the months before this announcement I spoke to many people in the technology industry about the competition. One recurring question has been, 'Why have a competition?'
The Inland Revenue is at the forefront of the Government's modernisation and policy agendas. Most people still see it as a tax agency but increasingly we are providing services that form a large part of the UK's welfare programme. That is why our ambition is to be seen as both an enabling and regulating agency. Driving this transformation is:
- The modernising government strategy
- The welfare reform agenda
- Advances in new technologies.
For the Revenue this has meant taking on an expanding range of services that now includes tax, National Insurance, tax credits, loan administration and, from 2003, child benefit. These interrelated services must be integrated, as the citizen typically wants to access more than one of our services and increasingly more than one government service.
The Inland Revenue chairman, Nick Montagu, has said that if the department is to achieve its ambitions, incremental change can no longer be the answer.
We need a step change in the pace at which we transform ourselves.
So how will we know we are transforming the Inland Revenue? We have identified four key indicators:
- The receipt of clean data from our customers
- Increasing 'e'-ability by stepping up our e-service capabilities
- Knowledge management
- Information management to enable us to progress towards the "joined-up government" vision.
This will only be possible if we invest even more in technology. So from 2004 we need a partner which is able to exploit the opportunities that transformation brings; which can put in place the architecture that will enable us to move to a position where we receive clean data, manage and exploit it in a way that adds genuine value; and to get the best from the undoubted benefits of e-services for our customers and ourselves.
This adds up to a search for a partner which has the right skills to help transform and support our business while maintaining our legacy systems for as long as they are needed. This must be done in a way which delivers best value - not just value for money but value in delivery capability, so that we get the widest possible access to skills within the technology industry. Ministers, our chairman and board strongly endorse this.
So is it a winnable contract? Yes. EDS and Accenture currently support our existing business and have worked with us as it has changed. But business transformation is the real challenge and opportunity for the future.
We know we have to transform as a department even if we cannot be precise about when this will happen or the exact shape it will take. The challenge for our technology partner is to design and deliver services within an architecture which allows us to respond to new demands placed upon us, giving us pro-active options to transform our business.
I know it will not be easy but I do believe it can be done. And I know there are a number of players in the industry that can deliver what we need.
Clearly our current partners have many of the skills we need and the market knows this. But it is absolutely vital that we do not make such a fundamental strategic choice without inviting the market to bid. We must ensure that we get access to the very best technology support available and other major players in the market are capable of successfully delivering the services we need beyond 2004.
Business continuity is crucial. When we first outsourced our technology systems we recognised that business continuity would be a critical issue should we change suppliers at the end of the contract. After all, the entire tax, National Insurance and tax credit systems must continue running from day one of the new contract.
As a result, we ensured that key assets automatically revert to the Inland Revenue and can then be made available to a new supplier. But it is also knowledge and people that make a partnership tick. We have invested heavily in our own intelligent customer function to ensure that we maintain expertise and knowledge. Similarly our partners have invested in their people. We expect that most of the people working on the contracts will transfer to an incoming partner under the transfer of undertakings (protection of employment) regulations.
But business continuity is not only about having the right contractual arrangements. It is also about transition planning. Because the department believes that it needs to ensure it has the right strategic partner, it is already making plans for a possible transition to a new supplier; EDS and Accenture are working very closely with us on this. So we believe that if we change suppliers we can successfully manage that change.
One related issue which we know has been of particular concern to bidders is the cost of transition to a new partner.
The chairman and I are aware that these costs could be high. We equally believe this competition is absolutely vital to the future success of the department. That is why, on 7 March, he announced that the government will meet the unique costs of transition and that these costs will not form any part of the evaluation of bids.
The Inland Revenue is really excited by the opportunities that this competition brings. It is about the future of the department and will be a real catalyst for change. That is why it matters and why we have to seek out the best.
John Yard is director of business services at the Inland Revenue and senior responsible owner for the Aspire competition