HMRC achieves 81% cost reduction by consolidating SAP

HMRC achieves 81% cost reduction by consolidating SAP

Tax department also cuts out more than 100 applications to save £131 million a year

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HM Revenue and Customs (HMRC) has announced a 81% cost saving by reducing the number of SAP systems at the department from seven to one vanilla instance.

The move is part of HMRC's IT strategy, known as '13 Machine Strategy', whereby the department plans to cut its 900 applications down to 150 applications operating on 13 machines.

Earlier this year, HMRC announced plans to cut £235 million over the next four years, with the decommissioning of legacy systems playing a major part.

Rather than spending money to achieve the system consolidation, Phil Pavitt, CIO of HMRC told 'The Crown and Suppliers: A New Way of Working' conference in London today: "We are buying no new applications in these four years. There will be no investment in new technology."

The department is planning to limit its investment in two ways. First of all, by consolidating onto systems it already has, and second of all, through a system retirement process.

In the SAP case, HMRC will be consolidating onto one SAP tax system, which will involve the reengineering of 400 taxes to operate on the single version it already has.

In another example, HMRC will reduce its 31 business intelligence (BI) systems to the one best one it currently operates and will use for the next four years.

Furthermore, by retiring old applications Pavitt said that HMRC will save money and reinvesting it into new platforms for the applications that are maintained.

“We have retired 116 applications. Forty are critical applications. This has saved us £131 million a year for the next seven years,” he said.


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