Interview: Phil Pavitt, CIO, HMRC

Her Majesty’s Revenue & Customs (HMRC) is a heavyweight among central government departments, with one of the largest IT estates in the UK. As of the end of 2011, HMRC had 6,000 datacentre servers, 600 systems, 80,000 desktops and 7,500 laptops. 

This vast IT arsenal presents considerable management challenges, especially in the face of ever-increasing pressure to lower costs and drive up efficiency.

The man whose job it is to grapple with these challenges is Phil Pavitt, who became HMRC CIO in 2009, after two years working as IT supremo at Transport for London (TfL). 

When he joined in 2009, IT accounted for a hefty 23 per cent of HMRC’s running costs. Since then, Pavitt has managed to bring this figure down to 16 per cent, and he claims it will fall even further – to 12 per cent – by April 2012. 

Reducing the cost of running IT is no small feat and Pavitt puts a lot of his success down to implementing a scheme called the 13 Machines, where he aims to consolidate 650 critical applications into about 150, across 13 machines or platforms, over the next five years. 

13 Machines began as a transformation programme branded Aurora, whereby HMRC sought to retire 40 applications, while spending as little capital as possible. This was achieved by using the cost savings from one retired application to fund the retirement of the next. 

“If the original application cost £2 to run, let’s say, and the new one cost £1, we used the £1 cost saving we made to fund the next retirement,” explains Pavitt. 

“We managed to do this for 18 months and retired 64 applications. Each application we retired, we retired it on to a platform we already had.” 

Aurora eventually morphed into the 13 Machines project, which will use the Aurora methodology to consolidate the current 650 applications into just 150, across 13 dedicated platforms, such as business intelligence or ERP. 

“My job was to say, ‘Instead of having seven versions of SAP, why don’t we just have one?’,” says Pavitt. 

“Over the next few years we are going to retire, move, migrate or upgrade applications on to one critical machine per subject. So, for CRM, we have chosen one vendor, one application, something we already have on the estate, and the rest will be retired on to it.  

“Each year for the next five years, HMRC will save £161m in running costs and barely spend any capital.”

Pavitt admits it was a challenge to get the business to accept the 13 Machines programme, but since its implementation it has gained traction and other government departments are beginning to follow suit.