Government And IT - "A Recipe For Rip-Offs": Time For A New Approach - Public Administration Committee Contents

Written evidence submitted by HMRC

In response to the question asked at the end of the informal session by the Chairman, in which he asks how different are the costs of running back-office systems at HMRC compared with other organisations where the CIO has worked.

In benchmarking some of the HMRC unit prices compared to previous organisations I have worked in, some are lower, ie Desktops, and some are higher ie data centre and applications. We are leveraging our past experiences to work with our suppliers to reduce costs and find lower cost innovative options for ensuring that these areas will reduce and therefore, benchmark wise, will be more efficient.

In response to the question asked at the end of the informal session by the Chairman, in which he asks if anything has been done to investigate and benchmark the root cause of different costs, for example with large systems like Oracle and SAP, and for copies of the benchmarks.

We have developed an approach which cuts IT costs into Towers of Service and have identified the Unit Price for these Towers. Gartner have recently completed a high level benchmarking exercise to benchmark the costs of these Towers in HMRC with comparable organisations. As you would expect there is a variation across these costs, with some being better than the benchmark, eg mobile telephony, and others being less competitive, eg costs of IT Helpdesk. We are happy to release a copy of this paper subject to Gartner copyright approval.

We recently introduced a system (called the "Tripartite Process") that operates in two ways. Firstly following requirement specification and initial architectural input a three way review between HMRC, its Service Integrator Capgemini and the IT supply chain (the Ecosystem), takes place to review both technical and commercial options. Once the Service Integrator proposal is documented a further independent assessor is employed to ensure the solution in the round, including integration costs and lifecycle run charges, represent best VFM against the prevailing market. Recent discussion with SAP around a major business change enabled us to reduce their costs and challenge the Service Integrator charges to demonstrate VFM. Whilst not in the format of a formal benchmark report, correspondence is available for scrutiny if required. We are currently employing Gartner as the independent assessor and their report will be available shortly subject to copyright.

April 2011

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Prepared 28 July 2011