In August Mark Hall, HMRC's outgoing Chief Information Officer (CIO) gave his incoming replacement (Mark Dearnley) some advice about the major challenges facing HMRC for when he arrives in October from Vodafone.
Was that the last that we would hear from Hall?
Apparently not, this week he has been speaking at Gartner’s Outsourcing & Strategic Partnerships Summit in London, where he offered some sage (a little IT pun there..very little) advice to HMRC and its Aspire contractors (mainly Capgemini).
Aspire (which costs £700M per annum) was set up in 2004, with prime contractor Capgemini delivering much of HMRC’s IT services via an ecosystem of suppliers that include BT, Fujitsu, and Level 3. The contract is due for renewal in 2017, and is currently being restructured.
Hall described it as a "child of its time", hardly a ringing endorsement, and warned of supplier dependency wherein the supplier (Capgemini) is the integrator of what HMRC does (a case of the tail wagging the dog)
He noted that suppliers are now offering "vanilla" services (ie basic services), and noted that most of the innovation is coming from SMEs and start-up businesses. Seemingly large suppliers are “tied up in knots” and they are still selling IT in verticals. Hall is of the view that working with SMEs, that have innovative products and ideas, would be beneficial.
Hall is quoted by Computer World UK:
“Our outsourcing partners have been there when we have needed them, they’ve been with us in the good times and they have been with us in the tough times. That’s a lot of what the contract was designed for in the early 2000s. The challenge is that the whole world is moving and changing around this contract.In other words HMRC's IT future, if it wishes to succeed, lies with SME's not large suppliers.
It is really difficult to keep pace with the market. Go back to 2001, how many people would have put cloud-based services in their contracts at that point? How many people would have thought about the social networking aspect? You wouldn’t. The contract was designed to be flexible, but was designed in a completely different paradigm than we face today.
It’s also created supplier dependency – we’ve got a great partner (Capgemini), but our challenge is that our partner is the prime integrator of what we do, so a lot of the knowledge and a lot of the experience rests with the supplier. It’s a challenge about how you bring innovation into delivery.
What we have done is a lot of outsourcing-based work, but the challenge is how to bring innovation, and if I’m being slightly blunt, innovation from SIs and large vendors that are trying to sell us the vanilla type IT.
Most innovation is coming from start-ups and SMEs, it’s not coming from the large traditional vendors. So there’s a challenge about how you get those people into a large outsourcing arrangement. We recently ran an event where we brought in 12 small businesses and ran an innovation session with them for a day, and we are now taking all those 12 forward in terms of ideas they are developing.
But it’s taking that radical thought to really put those people in. If you are a small business of 10 people with a really great idea, imagine coming into an organisation like HMRC that start to talk to you about risk, challenges, availability – it all becomes quite difficult. So we are doing a lot of incubator work to try and help those businesses.”
Tax does have to be taxing.
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