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How to commence the IT Modernization Process?

How to commence the IT Modernization Process?. Tony Lester August 2011. Purpose of Presentation. In this presentation, we will discuss: 1. Options and design of appropriate computerization strategies, 2. What implementation steps are involved,

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How to commence the IT Modernization Process?

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  1. How to commence the IT Modernization Process? Tony Lester August 2011

  2. Purpose of Presentation. In this presentation, we will discuss: 1. Options and design of appropriate computerization strategies, 2. What implementation steps are involved, 3. International and Regional IT trends for tax administrations.

  3. Introduction. • Adoption of modern “business” processes supported by IT: • improves efficiency, • improves effectiveness and, • improves public transparency of modern tax administrations. • Improving IT capacity and capability is a critical strategic goal for tax administrations. • Tax administrations recognise IT spend may need to increase.

  4. How best to modernize IT? • Create a “ Business” led rather than a technology driven culture. • Support this culture by creating a Business Strategy. • Identify what business processes need to be re-engineered. • Identify appropriate “ Change Champion” to lead future development.

  5. Preparing for the Cost of Modernisation • Start thinking about funding early • Cost of implementation • Cost of support and maintenance, sustaining the technology • Donors will not fund ongoing costs. • Communication, change management • Cost of peripheral (non-core software) licensing • Disaster recovery (may double your costs) • Staff training in how to use the new systems.

  6. Pre-Requisite Skills • Project Management expertise at least for core project team • The more the merrier • Procurement and Contract Management skills are essential for the PM team • Change management, communication • Business analysis, particularly for Business people involved with the project • Technical documentation skills • Clearly defined system specifications.

  7. Project Governance • Leadership with business? • A fairly new trend; build ownership within the business units • IT should not own / control the direction the systems should take • Must engage Senior Executives, must be involved in implementation planning and execution control • There will most likely be a need to change the organisation structure

  8. How best to modernize IT (contd) • Governance is key: --Project Office -- Program approach -- Business led -- Allocate key resources -- Risk management -- Ensure clear scope -- Timeframe/milestones -- Strong Steering Committees. • Be prepared to cancel/ delay Project if necessary!

  9. Options and design of appropriate computerization strategies • Two main approaches adopted: • Custom Build Application software, • Purchase of the Shelf ( COTS) products. • Most administrations moving towards COTS solutions vs Custom Development. • Critical that approach is supported by an IT Strategic Plan (ITSP).

  10. To buy or develop in-house Consider the following • Ability to create an internal IT capability • Are the skills available in your countries and can you compete to recruit / train / retain them? • Does your Administration warrant its own IT capability? • Cost to establish, but just as important ongoing costs to maintain.

  11. Creating an Information Technology Strategic Plan (ITSP). • A successful ITSP ensures IT is aligned with “Business” needs. • An ITSP establishes an integrated set of architecture views for: -- Business -- Information -- Applications & -- Technology • Results in a multi year planning and investment roadmap and, • Establishes the correct IT acquisition approach.

  12. Components of an IT Strategic Plan. • There are 5 steps to a successful ITSP: • Business Context and Architecture Vision, • A Current State report, • A Future State report, • A Transition Plan and • An ongoing Maintenance Plan. • Underpinning these 5 steps will be some agreed key Business Architecture Principles.

  13. How do you complete an IT Strategic Plan? • Needs to be a component of an overall organization “ Business” Plan. • Organization needs to set future “Vision” • Most likely will require 3rd Party technical assistance. • proven track record of 3rd Party is key. • Must be a joint Business/ IT initiative. • Business buy in critical. • It will take time– 6 to 9 months?

  14. How do you complete an IT Strategic Plan? (contd) • Needs to be supported by a complete Change Management program: • “Change Champion” role, • Clear communications to stakeholders, • Skill transfer from 3rd party to internal staff, • Recognises that significant training will be required to support future IT environment.

  15. Outcome of an IT Strategic Plan. • Organizations will establish: • a “Business” led IT roadmap for the future, • key implementation priorities, • future resource requirements; • People capacity, • Network capacity, • Hardware capacity, • Disaster Recovery etc. • indicative cost / benefits will be understood.

  16. Outcome of an IT Strategic Plan. (contd) • When supported by an accepted Change Management Plan, the whole organization is involved. • Will answer the “ Build Vs Buy” question. • For some countries, the ITSP can establish a specific direction, e.g. Upgrade / Buy Off-the-Shelf Product etc.

  17. So what are the International and Regional Trends? • International trends are fairly consistent. • OECD is leading work on the establishment of a “Common Tax Reference Model”. • There are common technology solutions to Tax administration functions. • Leading Tax Administrations aim to leverage “Legacy” information and systems. • Leverage occurring via use of COTS solutions.

  18. So what are the International and Regional Trends? (contd) • Most commons COTS solutions are: • Oracle and IBM for business solutions, • SAS mainly used in reporting requirements. • Success of these developments rely heavily on “Business” involvement.

  19. So what are the International and Regional Trends? (contd) • Pressure to implement cross functional or enterprise systems (e.g. Tax + Customs) • Client pressure for improved service • Desire for uniform functionality across tax types • Economies of scale • Managing support contracts easier (minimal number of vendors to manage) • Opportunities for government to implement “Shared Services”

  20. So what are the International and Regional Trends? (contd) • Limited COTS products available that suit Pacific Region. • Entry level expenditure for ORACLE, IBM etc. products too high • Use of mobile telephony to enhance service • Significant effort required to review Tax Legislation for the advent of E Services. • Greater collaboration occurring in a number of countries.

  21. Summary • IT is the cornerstone for modernizing Business Processes. • IT Capacity & Capability critical goals for all. • Needs to be “Business”, not IT driven. • Governance is critical. • Develop an ITSP to establish how to modernize. • Buy vs Build seems to be the strategic view. • Create a successful Change management program to help success.

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