The Tax Office Change Program project and change management directions and learnings

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The Tax Office Change Program project and change
management directions and learnings
GENERAL
ANZSOG CONFERENCE
FEBRUARY 2006
SEGMENT
AUDIENCE
DATE
Presented by Bob Webb First Assistant
Commissioner Australian Taxation Office
www.ato.gov.au
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The Tax Offices continuing project management
journey
Tax Reform
Learnings
The Change Program
Learnings
Broader Tax Office Program and Project Management
Capability
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• 1. The Tax Office
• setting the context
• drivers for change

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The Tax Office

• The role of the Tax Office is to manage and
  shape tax, excise and superannuation systems that
  fund services for Australians giving effect to
  social and economic policy.
• The main areas we administer are
• income tax
• goods and services tax 89 of
  Government
• excise duty revenue and 35 billion for
• superannuation (guarantee/surcharge/SMSF etc)
  states territories
• benefit schemes 3.7 billion
• Australian Business Number and Australian
  Business Register

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The Tax Office (continued)

• In administering the system in 2004 05 the Tax
  Office
• handled 11 million telephone enquiries
• processed 13.2 million activity statements and
  13.6 million income tax returns
• maintained 17.4 million individual and business
  accounts and
• managed 1.4 million debt cases for collections of
  more that 52 billion
• regulated 300,000 self managed superannuation
  funds
• has 22,000 staff in around 60 locations Australia
  wide

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Tax Reform 1998 - 2002

• A time of transformational change
• In August 1997 the Government announced its plan
  to reform the Australian tax system
• GST, Australian Business Number and Business Tax
  Reforms implemented from 2000
• The Tax Office implemented this as a major reform
  program, but in hindsight
• our consultation processes needed improvement
• our systems were outdated, complex and fragmented
• Dissatisfaction with administration expressed by
  tax agents/business throughout 2001-2002

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Community feedback
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Listening to the Community - 2002

• We learned how we were not meeting taxpayer
  expectations
• How did the process work?
• quantitative surveys to find out how well we
  listened and responded to the communitys
  concerns
• user clinics to understand administrative issues
  from a user perspective
• prototype products developed and tested at
  creative retreats involving the Tax Office and
  the community
• all client segments and staff

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Listening to the Community - findings

Businesses wanted more personalised electronic
access, a more user friendly website, greater
access to phone services after hours and for the
Tax Office to better understand their
circumstances Our staff had a clear
understanding of client issues and suggested ways
to improve client experiences with the tax system

• Individuals
• wanted easier tax forms, better phone services,
  more online options and for the Tax Office to
  better understand their circumstances
• Tax agents
• wanted easier and more certain transactions, more
  detailed and faster online access to client
  information, better phone services and secure
  email

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Other drivers for change

• A changing environment
• Government expectations for policy change
• Rapidly developing technology
• Community expectations rising
• Maintain community confidence, voluntary
  compliance
• Risk to revenue

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• 2. Easier, Cheaper and More Personalised Change
  Program
• response to a growing crisis of confidence
• a case study in project and change management

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What is the Change Program?

• Outcomes
• Improve the Client and Staff experience
• Improve productivity and flexibility
• Scope
• Covers the period 2003-2008
• New products and services
• - community systems
• - all segments/channels
• Quick wins (eg Tax Agent portal)
• Replaces essentially all existing ATO systems
  (front and back end)
• New enterprise wide business processes and
  systems
• 22,000 staff, and community impacted and related
  change management
• 450m over 3 major releases

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Program Approach 3 levels of strategy

• (Level 1) Strategic Positioning and Intent
• (Level 2) Program Design and Development
• (Level 3) Program Implementation

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A strategic approach
ECMP CHANGE PROGRAM 3 LEVELS OF RISK MANAGEMENT
Complexity inefficiency Non Compliance
(Sydney Morning Herald 14/08/02)
Tax Agents fed up and threatening revolt
(Sydney Morning Herald 14/08/02)
1. Revenue System Strategic Risks
Public sector paradoxes is that governments
extreme risk aversion increases project risk..
Private sector expects risks to be identified,
discusses and managed (CIO May 2005)
2. Program Development Risk
1. The Change Program Strategy
There may be a time and place for fixed
price/fixed schedule contracts for massive IT
projects. The time is almost never (CIO
May 2005)
2. Change Program Design Procurement Response
An executive risk profile and lack of resources
has prompted the ATO to extend the Change Program
from a three to four years (ZDnet Australia
17/01/05)
3. Program Delivery Risks
IT failure that hits the public purse Research
suggests that technology projects are more likely
to fail then succeed (Australian Financial
Review 20/04/05)
3. Change Program Implementation Response
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Relationship of the Easier, Cheaper and More
Personalised Change Program to the Tax Office
Business Model

There are also direct links between the two
programs, and a need for them to be aligned
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2
Compliance program
Compliance program
Easier, cheaper, more
Easier, Cheaper, and More Personalised Change
Program
personalised program
6
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(Level 1) Strategic positioning

• Clear intent addressing a major issue
• Integration with ATO Business Model
• External and internal transformation
• Contract with community Making it easier to
  comply commitments
• Also a foundation for emerging community based
  systems and whole of government
• Leverage off capabilities and experience of other
  organisations
• Phased program but over a minimum reasonable
  timeframe
• Top level leadership

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(Level 2) Program design and development

• Engage stakeholders external and internal
• - review our intentions
• - co-design products
• - monitor perceptions and feedback
• Develop
• - an overall people, process and technology
  solution blueprint
• - an integrated transition plan
• - a whole of program business case
• Select off-the-shelf and transfer technology and
  process solutions

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(Level 2) Program design and development
(continued)

• Phased transition plan over 4 years balancing
  risks
• Obtain the required expertise a single program
  partner with clear accountability
• Share the risk outcomes based, fixed-price
  contract
• Obtain expert independent advice
• Procurement best practice probity and risk
  management
• Senior executive leadership, governance and buy
  in

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Change Program timeframe and phases
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Change Program - phases
8
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Change Program Measures of Success
The Change Program will deliver the following
outcomes and our success will be measured by KPIs
in 5 categories
OUTCOMES Statements of what will be delivered
MEASURES OF SUCCESS Metrics, Measures and
Targets for some key outcomes

• An integrated Processing System (people
  process/technology) for all ATO products
• An effective Active Compliance and Advice
  capability
• Effective, improved Client Service
• Improved enterprise-wide outcome management of
  work
• Uninterrupted delivery of Tax Office business
• A system with integrity and performance
• Productivity and sustainability benefits
• The Program delivered effectively and
  professionally

• Client satisfaction
• Staff satisfaction
• Productivity
• Sustainability
• Effective Program Management

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(Level 3) Managing implementation risks

• Strong governance arrangements
• Set up as one of five Tax Office sub plans
• Change Program Steering Committee and Executive
• Regular reporting and monitoring
• Formal program and project methodology, including
  risks, issues and quality management
• Formal Stage Gates a total of 10 during the
  program
• Engage independent assurer ongoing independent
  advice and assurance
• Growing emphasis on people and change management
• On-going stakeholder engagement, co-design and
  monitoring
• Outcomes measurement and benefits realisation
• Supporting on-going Tax Office and Government
  business outcomes

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People Change Management Approach
Macro
Actions to guide and manage Program
governance/resourcing Measurement/feedback
strategies Stakeholder management Change
initiative integration
Actions to enhance effective leadership Vision/age
nda creation Managing the change
journey Culture/behaviour change Communication
strategy Sponsorship network
People (soft)
Process/Systems (hard)
Actions to enable delivery Transition
processes Organisation and job design Training
performance support HR infrastructure and
processes
Actions to create ownership and
acceptance Communications consultation Change
readiness monitoring Local implementation
planning Change agent network Rewards and
recognition
Micro
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Results to date half way through the program

• Most client experience commitments delivered on
  schedule to date
• Move immediate community concerns addressed
• Surveys indicate initial improvements successful
• Tax agents increasingly report they find it
  easier to deal with the tax system very high
  take up of new services (eg. portal)
• Businesses believe the Tax Office tries to make
  it easier for them to comply encouraging early
  take up of new services but from a low base
• Individuals take up of new and enhanced services
  continues to grow strongly (eg. eTax)
• Some areas require further work
• Businesses and individuals still to be convinced
  that the Tax Office takes their individual
  circumstances into account

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Results to date half way through the program
(continued)

• Release 1 delivered
• Tax agent and business portals and other quick
  wins
• Many of the new technology platforms installed
• Client relationship management system to around
  2800 call management staff
• Document and content management system
• Release 2 delivery throughout 2006
• design and build near complete detailed
  deployment planning well advanced
• Release 3 delivery in 2007/08
• Integrated core processing design well developed
  early build started

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Growing expectations community systems

• Where possible natural systems will be used to
  allow taxation legislation to be complied with
  from normal business systems and other sources
• We are pre-populating forms with information
  that we already hold or can readily obtain from
  other sources and looking at alignment of
  government reporting requirements
• We are building taxation rules into business
  software. eg. automated BAS preparation as part
  of business record keeping software with direct
  links to on-line lodgment and real time
  processing
• We are making some of the rules and processing
  modules we develop for our own systems directly
  accessible to taxpayers and other organisations
  systems
• We aim to provide greater certainty to taxpayers
  by bringing forward compliance checks from
  post-assessment to pre-assessment

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How are we keeping the community informed?

• Making it easier to comply first released in June
  2003
• Outlines improved client experiences
• Annual update reports progress milestones reached
  and not reached
• Most recent edition published in February 2006

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Is it making tax administration more efficient?

• Productivity savings include
• community take-up of electronic and self-help
  channels
• quicker staff access to consolidated client
  information
• improved case and activity management
• less manual interventions
• enterprise wide processes
• lower costs to change, maintain and operate
  systems
• easier to respond quickly to policy changes and
  community and business expectations

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• 3. Learnings
• Tax Reform and the Change Program

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Learnings from Tax Reform and the Change Program

• Senior leadership and strong governance
• Shared understanding needed of change imperatives
  
• Articulate a clear intent, strategy and design
  directions
• Focus on delivering quick wins while building for
  the future
• The importance of listening to the community and
  involving key stakeholders in the design process
  a continuing learning process
• Investment in program development and business
  design stage critical
• Draw on existing experience and products no
  need to go it alone
• Contractual arrangements that create the right
  mutual incentives

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Learnings from Tax Reform and the Change Program
(continued)

• Use of professional program/project management
  approaches and systems
• Staying focussed scope management/change
  control
• Realistic scheduling/resourcing
• New platform integration always risky eg. CRM
  deployment deferred by 6 months to get it right
• Value of Stage Gate reviews and independent
  assurance
• Focus on outcomes measurement and benefits
  realisation

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• 4. Project Management in the broader Tax Office
• Project Management Environment
• Using learnings to improve our approach

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Project Management Environment

• Diverse range and size of project work Policy,
  Compliance and Administrative
• Project management approaches in the Tax Office
  are quite variable
• Policy and IT projects have been the main focus
  to date
• Change Program projects are meeting standards
  above those which the Tax Office has
  traditionally attained
• Hesitancy in some areas to apply project
  management and governance approaches. A result
  of
• poor understanding of how to differentiate
  between project and business as usual work
• perception that project management methods are
  too complicated for many situations.
• one size fits all approach to project management
• insufficient integration with other management
  processes

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How are we using these learnings to improve the
Tax Offices Project Management approach?

• Improved Governance
• Senior Executive support for project management
  capability improvement
• Integration of project management into existing
  business processes (eg business planning) to
  achieve an equivalent standard of governance and
  reduce duplication
• Clearer project sponsor and manager
  accountabilities
• Introduction of review points (stage gates) with
  go/no go decisions
• Review of corporate project management and
  governance assurance framework including a new
  Practice Statement and formal assurance process
  (particularly important in our complex and
  decentralised environment)

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How are we using these learnings to improve the
Tax Offices Project Management approach?
(continued)

• Improved Methods
• Development and application of Program vs Project
  approaches
• Uniform approaches to project identification and
  profiling
• Methods tailored to suit project characteristics.
  Adoption of a 3 tiered approach with more rigour
  required for larger high impact/risk projects and
  less for smaller low impact/risk projects
• Alignment of project and delivery methodologies
  (design, application development, etc)
• Recognition of the importance of the use of
  appropriate technology support for project
  governance and management (eg user portal for
  navigation)

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How are we using the learnings to improve the Tax
Offices Project Management approach? (continued)

• 3 Tiered approach to profiling projects

Tier Spectrum Example
Very high profile, impact, and high cost
initiatives. Immense change.

• Major complex Policy changes
• Change Program

1

• Most other Policy changes
• Significant Compliance projects
• Significant Administrative projects

2

• Small Compliance and Administrative projects

Low profile, impact, investment initiates. Very
minor change.
3
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Conclusion - The Tax Offices continuing project
management journey
Tax Reform
Learnings
The Change Program
Learnings
Broader Tax Office Program and Project Management
Capability