The Australian Tax Office (ATO) has put forward its side of the story on the much maligned Change Program in its recently released annual report 2009-10.
The report charts both the achievements and challenges experienced in the implementation of the project, which includes the consolidation of the many and varied tax processing systems into a single Integrated Core Processing (ICP) system.
Tax Commissioner Michael D’Ascenzo writes in the report that “2009-10 was a watershed year in which we shepherded significant change”. One of these ‘watershed’ initiatives was the “top-down innovation” of the Change Program. “The deployment of the final stage of our change program was a significant achievement. This modernisation program gives the technical capability to provide better service to the community, tax professionals and the government,” Mr D’Ascenzo said.
The Commissioner emphasised that the program “delivered on many fronts”, including:
- Management of more than 39 million lodgements;
- Processing of more 33 million activity statements and income tax returns;
- Issue of more than 13 million refunds; and
- Maintenance of 23 million active tax file numbers, and over 6 million Australian Business Numbers (ABNs).
At the same time, the report confronts the problems with the program’s implementation, admitting that “the temporary shutdown of our systems as we modernised resulted in inevitable delays” and “led to a failure to meet some service standards”.
The ATO shut its system down in January 2010 anticipating the transition to the ICP system. The report explains that “as the income tax release had the greatest potential to affect the community, we selected late January 2010 for the release as it is the quietest time of the year for lodging returns”. However, despite warning tax agents and the community of the system shutdown, the ATO received a 3 per cent increase in lodgements for this period, thereby exacerbating the delay from the transition.
On top of these “inevitable delays”, minor configuration made to the system on March resulted in two glitches which caused a further two-week delay. Furthermore, the report explains that the agency “experienced some problems” with its routine exchanges of up to 100,000 taxpayer records each day with Human Services agencies, Centrelink and the Child Support Agency.
An Australian National Audit Office (ANAO) report tabled in November 2009 found a number of different problems with the Change Program, including that the final Release was running almost two years behind schedule and was $434 million over its initial budget as stipulated in its December 2004 business case. In 2004, the ATO expected that the entire project would have reached completion by June 2008.
Despite these problems and concerns, the ATO vehemently defends the benefits of the change program and is optimistic about its long-term implications. In June of this year, Mr D’Ascenzo and Second Commissioner David Butler faced a Senate Estimates hearing on the problematic change program, in which they argued that “the old system was very expensive to maintain over a long period of time” and that “the ATO had no choice other than to replace the 30-year system”.
In the 2009-10 annual report, the ATO claims that the “two new enterprise-wide systems – integrated core processing and Siebel – have provided us with the technology platform which will enable us to transform our business processed and provide a more efficient service to the community. ..In going forward, we will continue to re-engineer our business processes to take full advantage of our new integrated systems”.
More recently, the ANAO handed down a positive assessment of the Change Program’s Client Contact - Work Management - Case Management (CWC) system, which uses Siebel off-the-shelf customer relationship management software. The September 2010 report found that “the implementation of the CWC has improved and transformed key aspects of the Tax Office activity”.
The ATO change program evidently has a number of benefits for the agency’s service delivery. However, considering the size and scope of the project and the ATO’s customer base, it is likely that the storm has not yet passed.