Package sellers, telcos to see IRD business

Suppliers of packaged software for standard business tasks such as workflow-tracking and business intelligence will stand to benefit over the next few years as the IRD changes its philosophy on "non-core" business applications to a "buy, not build" approach

Suppliers of packaged software for standard business tasks such as workflow-tracking and business intelligence will stand to benefit over the next few years as the IRD changes its philosophy on “non-core” business applications to a “buy, not build” approach.

The department is a convert to the idea that if the package as it comes “out of the box” does not fit the business, then it might be more cost-effective to change business processes to meet the package’s design, rather than vice versa.

“You used to tailor a package to meet your business and [organisations] frequently found it more expensive than writing your own,” says IRD business development and systems manager Colin MacDonald. Packages are becoming more capable, he says, and now have out-of-the-box functionality to meet most needs.

“If your processes [for a common business function] are so specialist that [off-the-shelf software] won’t support them, you have to ask whether you should be doing business the way you are.”

The IRD is shrinking the orbit of its massive and all-embracing First system to handle the core functions specific to a tax administration, and will surround it with off-the-shelf satellite products to manage the common business tasks.

The separation of core business, handled by in-house developed applications, from “non-core but essential” applications is in line with the thinking of most revenue agencies in New Zealand and other countries are doing, says strategic technology and e-business manager Laurence Chiu.

The department is “very much in the early stages” of this move, MacDonald says.

Another opportunity will present itself to telecommunications suppliers over the next year as requests for information and requests to tender go out for renewal of IRD’s major telecomms contracts, set to expire in September 2004. Telecom is the department’s main supplier, but there are nine individual arrangements with various parties, says national manager of IT Tony Lester. He will not say whether a reduction in the number of suppliers or contracts is envisaged. “We’re focussing on the business and its needs.”

Examination of IRD’s “underpinning requirements” has resulted in an enterprise technical architecture (ETA), which is substantially complete, though it has not yet quite been signed off.

As part of the ETA, a “standard operating environment” will be defined, to simplify the implementation and distribution of applications across the department and reduce costs.

An information systems strategic plan is expected to be signed off by the end of this year. In evolving this plan, IRD is working closely with the State Services Commission and Treasury.

The main platform for First is a Unisys Clearpath 6800 mainframe. Sun machines and Intel desktops are also in the mix.

The cutting edge of IRD’s development is in Java, though MacDonald says the organisation has not yet decided definitively on a J2EE or Microsoft .Net direction. The latter has “had quite a success” in the local market, MacDonald says, but is too early in its evolution to risk adopting it completely.

The Clearpath still requires maintenance and some new development in Cobol, for which IRD largely trains its own staff.

IRD is moving increasingly online with services for the taxpayer. It already has a “reasonable record” with e-file, instituted in 1991, Chiu says. Two-thirds of tax returns now come through this route. Online GST filing was instituted in November last year. Electronic filing of fringe benefit tax began in May and of IR3 returns in April this year.

Meanwhile, IRD has implemented the first online secure correspondence system in the New Zealand government.

A development that will let organisations examine online the tax accounts the IRD holds for them is delayed. There are significant problems, Chiu says, with authorisation of individuals within a company to handle such sensitive documents.

Computerworld pointed out during the passage of the Electronic Transactions Act that while individual electronic signatures had been recognised for legal purposes, there was no recognition of an electronic equivalent of an organisation’s “common seal”. Such a single point of company authorisation in some form would be useful in handling the account problem, Chui says, but the problem of partial authority for some staff to see certain parts of the accounts and not others would remain.

Authentication for tax dealings, even at the sensitive level of transactions, is still done on an identifier and password basis. This, Chiu says, is “in line with the thinking of the e-government unit”. The department does not see more secure measures such as a digital signature as needed at this stage.

MacDonald is on the strategic committee for the authentication side of e-government. Lester is involved in the SSC’s “evidence of identity” working party, which is concerned with the relation of a person’s electronic identity back to verified evidence of a connection with the real person.

Chiu serves on the eGIF (e-government interoperability framework) working party.

The concepts of interoperability and secure identity are related in the move towards giving citizens a “one-stop shop” to deal with government. Intercommunication of information among agencies eases the evolution of such an interface, and IRD is working with the Ministry of Social Development, the Companies Office and the Identity Services branch of the Department of Internal Affairs on this front. Information interchange is naturally under the protection of the Privacy Act and, with IRD, its own secrecy legislation.

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