Treasury reveals IT integration costs

According to the Treasury’s ‘regulatory impact assessment’, Her Majesty’s Revenue and Customs will incur £75m of costs mainly due to integrating the two IT systems between 2004 and 2006. But the figure could climb higher due to unforeseen costs arising out of IT overlaps between the two departments.

‘The known costs that arise directly from the creation of HM Revenue and Customs are anticipated to be in the order of £75m over 2004/05 and 2005/06, including the preparatory costs of alignment of basic services, such as work to put the future IT desktop requirements of the departments on a common platform,’ the Treasury said.

‘Further costs from integration may arise in due course, for example, from changes to join up some of the services the two departments currently provide to business customers independently. These cannot be quantified until the associated policies have been agreed.’

In a previous report to the Commons Treasury committee, HMRC chairman David Varney explained that customers would see the benefit of a merged organisation with ‘one interface’.

The man responsible for creating and updating this ‘one interface’ is chief information officer Steve Lamey. With a proven track record of IT integration at BG Group, Lamey will work closely with the new IT services supplier Capgemini to ensure the integration runs smoothly, and the combined department’s IT systems work better than in recent times.

Capgemini replaced EDS earlier this year as the Revenue’s IT supplier following a string of disasters surrounding the tax credits and national insurance IT systems.

The Revenue has already reviewed its information security procedures as part of the £3bn Aspire outsourcing contract with Capgemini.

Processes, such as the appointment of subcontractors and staff accreditation programmes, have been tightened at the department during the handover from previous supplier EDS.

In July 2003 chancellor Gordon Brown announced that a major review of the merging departments would be undertaken. Permanent secretary to the Treasury Gus O’Donnell reported the findings of the review in March, which led to the strategic decision that HMRC would be created to improve customer service, reduce compliance costs, and would work more effectively and efficiently as a whole entity.

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