Everything Is Wunderbar!

My compliments to Phil Pavitt (Chief Information Officer of HMRC), who is now rather ubiquitous in the media and is currently outshining Lin Homer in the "column inches" devoted to his achievements.

Recently I noted that Pavitt was proudly claiming that he/HMRC had halved HMRC's spending on IT from £1.4BN to £700M in two years. I was "shocked and appalled" by the reactions from some of the cynics within my loyal readership, who suggested that Pavitt may be telling porkies:

"Those of us who have followed the, erm, spotty career of Phil "Employment Agency " Pavitt will understand that his relationship with the truth has always been somewhat difficult..........."


"One suspects most of the 'gains' have come from consolidating software onto fewer physical boxes and using more 'virtualisation' as this is the flavour of the month in IT at the moment. However, the fact you are running a virtualised Windows server on a machine that is also running a virtualised Unix Server etc does not mean you have any less operating systems or software to support just less hardware.

So Pavitt's claim to have only one platform is almost certainly being extremely economical with the truth Since much of the cost is taken up by the former not the latter I doubt that these 'savings' are going to be around for long as overtime software license increases will eat into the savings.

Virtualisation can create its one issues as shared resources such as disk, memory and cpu capacity may have to upgraded over time if one of the systems using the resource has been poorly specified and is subsequently found to need much more grunt. For example, general upgrade of CPUs on shared machine can feed directly into the bottom line as licensing costs of software are often based on CPU Mips. Thus if you enhance the CPUs on a box because one system or application needs more processing speed then all the other systems software licenses may also be hiked regardless of whether they need the extra power or not. 

This is the ticking time bombs Pavitt is leaving for his successors."

Such cynicism has not deflected Pavitt from telling the world about another saving (I assume that this is on top of the £700M IT saving that he was talking about the other day?) that HMRC has made. Apparently, HMRC will save more than £200M by 2017 after renegotiating its Aspire outsourcing contract with Capgemini.

Aspire covers IT services including desktops, laptops and a number of tax and credit systems such as online VAT filing. The contract, which is led by Capgemini and includes some 360 other suppliers, was renegotiated in January.

It most certainly needed some renegotiation, for as I wrote in February 2012:

""The Aspire contract between HMRC and Capgemini covers a 13 year period and was originally valued at £2.8 billion.[49] This contract is a case study of what is wrong with the present procurement culture. Such a large contract is too complex to manage. The assessment of costs and benefits is opaque and it commits too much power and money to a single supplier."

Anyhoo, as well as lowering the cost per unit of IT services, the renegotiations will give HMRC greater control over the volume of work going through Aspire, according to the Cabinet Office. HMRC will also be able to control the Aspire subcontractors directly, which was previously the responsibility of Capgemini.

Pavitt is quoted by the Guardian:

"No longer do we have a unique SI relationship with Aspire and Capgemini.

We have introduced competition at all levels. There's no longer exclusivity between us and our partners."

HMRC is currently introducing 25,000 new PCs to its offices, and Pavitt claims that its IT service levels were at 99.93% "our best ever".

Pavitt said:

"We have cut our IT costs, transformed IT and made it sustainable, stabilised our services and reorganised our business processes. We have some way to go still, but we are delivering sustainable change."

So there you have it, everything is wunderbar!

There is no stopping this man!

However, I am always interested to hear from those of you who have to use the systems and have insight into the reality behind the claims made by Pavitt. Let us trust that he does not seek to emulate Icarus and fly to close to the sun.

Tax does have to be taxing.

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