The Columbus Programme

On June 17 we completed the phased exit from Aspire, government’s largest outsourced IT contract (£10bn). Despite skepticism, we split Aspire, took control of our IT and created a ground-breaking commercial IT operating the model. Recognized as the government’s most successful major program, Columbus delivered on time with huge savings for taxpayers – creating a blueprint for any organization to follow.

Innovation Summary

Innovation Overview

HMRC’s IT supports the collection of more than £500bn in taxes from 50 million customers, keeps goods moving through customs on a 24/7 basis, and enables 7 million families to receive targeted financial support. The Financial Times ran a ‘Havoc’ headline (January 2015) when reporting the Public Accounts Committee’s nervousness over HMRC’s plans to end 20 years of outsourcing IT Services through one monolithic contract (c£700m per annum) known as Aspire. The contract was provided by four companies led by Capgemini. Aspire directly employed 5,000 IT professionals and had an ecosystem of 200 smaller IT businesses and represented 20 years of outsourced IT service. Such contracts were common in government and the IT industry but the Aspire contract was the largest in government covering one of the largest IT estates in Europe.

The service was reliable - why change? HMRC must provide stability whilst handling ever-increasing layers and volumes of data, respond to customers demanding better services and taxpayers who deserve economy. Far from supporting HMRC, that contract would obstruct us. HMRC’s Columbus Programme conceived a new model for the future involving a safe phased exit - insourcing some services and re-procuring others on smaller, shorter contracts. The new model was driven by a multi-supplier strategy that would allow HMRC to:

● bring ownership and delivery of IT back under the Department’s control - bringing strategic functions in-house and building internal architecture and design, service operations, and vendor management capabilities.

● lead IT delivery in-house, using a combination of in-house capabilities and multiple external suppliers to complete end-to-end technical delivery, and building in-house accountability and better risk management.

● re-procure selected services where in-house control is not critical.

● reduce supplier costs through reduced risk premiums, better utilization, utility pricing, commodity products, standard terms and conditions, and procurement processes.

Working with stakeholders across government the programme developed and implemented the new operating and commercial model which meant increasing in-house capability, including commercial, and redrawing the way we deliver services. The program began by rationalizing HMRC’s own IT teams to ensure its operating model focused on what it wanted to achieve, cleaning up accountabilities and recruiting two tiers of leadership right the way across the IT organization. It then secured the novation of the principal sub-contracts under Aspire to HMRC so that it took direct accountability for IT contracts with Accenture for the running and development of one the Department’s largest and most important IT applications - the National Insurance and PAYE Service (NPS); Fujitsu for its data centre hosting, bulk print and scan services; BT for its WAN; as well as Capgemini for most other application services and for system and services integration.

This took place in January 2015 after six months of extensive negotiations across the supply chain. The project reformed the terms of these contracts to make them more market-aligned and negotiated early insourcing of key functions in three waves that meant by October 2016 it had taken control of system and service integration right across the supply chain itself. It prepared for running relationships across multiple suppliers, introducing new collaboration schedules across all contracts, establishing a tiered model for managing suppliers and governance to match. The program led four key procurement exercises and successfully transitioned its bulk print, bulk scan, local printer and managed the desktop estate to four new IT suppliers.

In its fourth and final insourcing to mark the formal end of the Aspire contract on 30 June 2017, the project took control of IT engineering facilities and took the first steps in releasing cloud-based virtual developer and live support environments that are capable of being accessed right across the supply chain. 30 June 2017 also saw the culmination of innovative work with Fujitsu whereby the two organizations had worked together on a Build/Operate/Transfer arrangement that created hyper-scale cloud management capability inside HMRC ready for increased cloud adoption, including active/active deployments across multiple cloud providers with HMRC undertaking the cloud brokering itself.

Columbus has successfully exited HMRC from the contract, insourced and re-procured services and created an innovative government company - with no disruption to service or revenue. Columbus has cost less than the business case and is exceeding benefits (savings already exceed program cost). HMRC is now able to exploit new technology to transform services and has been pushing the market to develop the tools that it needs. The success of Columbus is crucial to delivering its aim of becoming one of the most digitally-advanced tax administrations in the world by 2020.

Innovation Description

Innovation Development

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Year: 2015
Level of government: National/Federal government


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