HMRC to move away from 'dangerous dependency' on legacy mainframe operating systems in new IT strategy

Some HMRC mainframe applications were built in the era of punch cards...

HM Revenue & Customs (HMRC) has released an IT strategy document outlining its plans to move away from what it calls a "dangerous dependency on legacy mainframe operating systems".

The organisation said that it currently has a very complex IT set-up, with nearly 600 different IT applications, many of which were built back in the days when data was entered into mainframe computers using punched cards. In addition, it said that the 2005 merger of Inland Revenue with Customs & Excise resulted in duplicate systems, particularly around financial accounting, that are still being used today.

"We face an aging ICT estate where data fragmentation allied to manual processing interventions will struggle or fail to support the demands of the digital age," the report reads.

Despite the organisation achieving cost reductions through major contract re-negotiations, there remains much work to be done to move away from legacy mainframe operating systems.

HMRC believes that the key to transforming its IT estate will be to re-engineer what it has so that the majority of its IT applications can run in virtualised environments, with as much as possible hosted on commodity cloud services.

"As we modify our approach to application, database and infrastructure engineering, we will move with the market as it develops, as opposed to lagging behind it," states the report.

HMRC was given a boost in the 2015 Spending Review, when the government announced that an extra £1.3bn would be invested to "transform HMRC into one of the most digitally advanced tax administrations in the world".

To achieve that, HMRC plans to have three core tax administration platforms: the individual tax management platform, the enterprise tax management platform (based on SAP), and the customers' declaration services.

It will then have a further five "cross-cutting" platforms. These will include a case-management system for compliance and exception processing, and a data and risk analytics platform. This will include a range of upstream risk analytics tools and an Enterprise Data Hub, linking digital services and data analytics. This will enable further consolidation of its existing data warehouses.

There will also be a debt-management platform, an HR platform and a single financial reporting platform.

Cloud focus

HMRC has made no secret of its plans to use more cloud services.

Most recently it announced that it would use DataCentred's OpenStack public cloud to support its multi-channel digital tax platform, while in September last year it released a job ad for a cloud transformation director - a role which has yet to be filled on a permanent basis.

In the IT strategy document, HMRC emphasises that the use of cloud will grow.

"Virtualisation technology brokered from multiple vendors, moving to a disaster-tolerant environment with less focus on disaster recovery, will help HMRC transform our data centre hosting platforms from traditionally dedicated physical resources to virtual cloud-based services," it reads.

Last October, HMRC picked global management consulting firm Bain & Co as its "strategic partner" to help it transition away from its Aspire outsourcing arrangement towards a wider range of smaller contracts. According to HMRC's chief digital and information officer, Mark Dearnley, ditching the Aspire deal will save taxpayers at least £200m in costs.