This month's CW500 presentation in London was delivered by Phil Pavitt, CIO at HMRC (Her Majesty's Revenue and Customs, the UK tax man), who described a programme within his department to drive cost savings within IT. To provide some perspective on the IT estate that exists within HMRC: it is the largest in Europe and the 15th largest globally, controlling in excess of 1b transactions, totalling more that £1.2t in payments through the government banking system. (This is apparently larger than HSBC performs, globally.)

Historically IT in UK government doesn't have the greatest of reputations, both in terms of efficiency and reliability -- something that a cynic could trace back to the UK's first IT project, Babbage's "Difference Engine" - and it is against that background, plus the edict to cut 33% of back-office costs from HMRC's operations, that Pavitt and his team have been undertaking their project. Thus far, in a little under two years, the team has cut £175m over the next 5 years in software license consolidation alone, whilst reducing the number of active platforms from in excess of 900 down to a current figure of around 150.

The latter is significant.  People used to It joke that HMRC had  purchased a licence "for every commercial software product ever released." But how had this situation been allowed to grow out of control?

Pavitt put it plainly; HMRC was not "an intelligent customer." Its IT procurement had become divorced from any business strategy and shadow IT -- where departments bought or commissioned their own systems without involving IT in the process -- became increasingly common. This tends to be symptomatic of a general lack of satisfaction with IT in general, so along with reaching out to the greater organisation to produce a formal "business-led IT strategy," Pavitt's team introduced to increase proper rigor when acquiring software and services.

Primarily, this rigor manifests itself in the use of what Pavitt calls "Tripartite and Benchmarking" (derived from previous UK Govt "Resilience Benchmarking Project" focused on UK financial systems). When applied to HMRC, this boils down to creating a system of verification and validation of processes prior to requesting quotes and entering into a cost-matching exercise. At RSG we'd refer to this as "Scenario-based Selection" -- i.e., "What are we actually using the platform for?"  This is something we have historically believed is essential to a successful purchase-cycle, long-before trawling for quotes from suppliers.

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