The Australian Taxation Office appears to have re-negotiated its arrangement with Accenture to carry out work on its troubled Change Program, ending its current contract with the IT services giant and beginning a new one.

“We have also — and the commissioner has announced this internally — drawn a close to the Change Program contract with Accenture, and that finishes on 30 June this year,” said ATO second commissioner David Butler under sustained questioning about the project in a Senate Estimates Committee hearing last week. The transcript is online.

“We are saying that we have negotiated with Accenture a completion to the current contract, and any further work we do with Accenture will be on the basis of the new contract,” he added.

The ATO has previously stated that it had spent $435 million on its contract with Accenture since the Change Program was commenced back in 2004, in a fixed price arrangement. However, the AustralianIT has reported additional contracts between the pair ranging into the millions.

Last week Butler said the total Change Program cost to 30 June would be $820 million. Neither the ATO nor Accenture have yet replied to requests for comment on the matter of a new contract with Accenture.

Butler also revealed that another small review of the Change Program governance was being carrier out — CPT Global’s Peter Wright — who Butler described as “our IT expert”, will do a quick review of the ATO’s IT governance, producing a report which Butler said would give the agency an indication of what else it could do to ensure governance structures were working effectively.

Two other consultancies act as checks and balances on the Change Program — Capgemini and Acquitaine — and provide monthly reports on the project.

The Change Program has been running since 2004, when it had an initial budget of $445 million. This has since increased by several hundred million, both due to increased legislative scope of the reform, but also budget overruns.

The objective of the program is to migrate away from the ATO’s decades-old technology platform and on to a more modern architecture that will deliver the agency improved flexibility in the way it conducts its business. The vast majority of the Change Program has already been delivered, although in September 2008 the ATO’s chief information officer Bill Gibson attempted to re-brand the program the ‘Change Agenda’ in recognition that ongoing change would not stop.

In the Senate Estimates hearing, Butler faced sustained questioning from independent Senator Nick Xenophon and other parliamentarians, who raised again issues of delayed processing that have caused an uproar amongst the accounting community and some constituents.

One particular issue examined was the integration of the ATO’s business activity statements system into the Change Program IT infrastructure. Butler maintained that over the past several years since he took the second commissioner job there had not been plans to integrate the system, as the thinking around the integration had changed since the Change Program was begun in 2004.

However, he said, the BAS system was only about 10 years old, compared to the 30-year-old original ATO taxation platform being replaced under the Change Program, and was the only major core system not to have been integrated.

One final task according to Butler, remained before the ATO’s legacy systems were put to rest. “What we have on the table to do, and what we want to progress this coming year, is to build what is called pay-as-you-go instalments,” he said. “That will allow us to completely retire the 30-year-old system.”

“At the end of July 2011 we will be able to retire the old system completely.”

Image credit: Matt Aiello, royalty free

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1. Ric
   Posted 07/06/2010 at 5:31 pm | Permalink | Reply

   Has anybody asked the ATO how much “younger” their new core system is than the “old” one? … apparently it’s about 20 years old – not necessarily as modern as it could be.

   And of course the BAS system is only about 10 years old – the BAS has only been around that long!

   • Renai LeMay
     Posted 07/06/2010 at 9:35 pm | Permalink | Reply

     Heh I think the ATO thinks in elephant years Ric … they know they are going to be around for a loooong time ;)