The Inland Revenue Department is looking at IT solutions which will enable it to build a more personal profile of each taxpayer.
Last week the department announced a technology strategy that will see it focus less on transaction-based computing and more on applications such as data analysis and business intelligence. The department will run a series of feasibility studies in the new year to determine which solutions will underpin the strategy.
Over the past 12 months IRD has reviewed its IT environment with a view to how it should evolve in the next five to seven years, says business development and systems general manager Colin MacDonald.
He says while the department's IT environment is meeting current needs, the business plan signals some significant changes in the way the department achieves its outcomes, particularly in the area of tailoring to meet individuals’ requirements.
“This leads us to quite different technology requirements.”
The department’s core, 10-year-old, mainframe-based FIRST (Future Inland Revenue Systems Technology) platform will continue to handle high-volume processing such as dealing with tax returns. However, IRD will develop more specialist applications, which will possibly run on the Unisys A Series mainframe but also on other platforms, says MacDonald.
“Over recent years we have seen signs that FIRST is a bit more difficult to maintain and we are now having to respond to some quite different needs. When FIRST was put together, student loans and a number of social policy elements didn’t exist. It was designed as a tax collection system.”
MacDonald says the mainframe, which is managed by EDS, will continue as a core part of IRD’s architecture, but only as a part. A number of sub-systems will be developed to integrate with FIRST.
“One of the areas that is consistently emerging as a requirement is the need to profile and analyse information on taxpayers and social policy customers.
“For example, we want to use profiling to identify high compliance risks based on people’s compliance history. Whether we build or buy will be decided when we have a clear view of our business requirements.
“We have some very able people with good architectural skills inside the department but we will probably be looking for one or two specialists to come in rather than a whole team.”
MacDonald says the next stage is to define the new technical architecture.
“Our view at this stage is that we will run the project ourselves but will use independent expertise to bring in some additional thinking. It will be a mix of the two. We haven’t chosen a partner for that yet.”
Neither has the department decided whether it will choose Microsoft .Net or Java as its development platform.
“We will probably run them in parallel. Some schools of thought say that if you’re reasonably large you should be looking at running both. Both approaches are sound and we could expect to have a degree of mix and match.”
IRD spends about $25 million a year on IT and MacDonald says developing the technical architecture and high-level feasibility and design projects will come from that base funding until a clearer picture of the requirements is formed.
The technology strategy was developed to support the department’s business plan, which was released in August 2001 and encompasses the e-enablement strategy it announced in September.
As part of the review it benchmarked its IT environment against those of 23 similar organisations including 10 international tax authorities, five US state tax authorities, five international banks and three local government agencies.
“The benchmarking study showed IRD’s technology environment was equal to or better than the other organisations. For example, IRD’s IT costs were lower than average and it employed fewer IT staff.”
MacDonald says IRD has achieved that through having effective governance processes.
“Since the early 90s we have had an executive systems committee which has overseen all significant technology investments. That’s a big part of how we have managed our costs. We also have some very capable IT professionals within IRD."