SAP system gives UK tax collector a £750B headache as clock ticks on support

The UK's Treasury ministry is to determine the fate of aging SAP software that runs the nation's tax system – processing £750 billion ($968 billion) of transactions a year – over the coming weeks. The incoming Labour government faces the task of deciding the future of the technology supporting tax collection, which currently …

[alain williams]

Cost: "highly customised" vs bespoke ?

What would it cost HMRC to produce its own bespoke system - written from scratch ? How much will it cost to make bespoke changes to S/4HANA (or Oracle or ...) ?

Once done it will not need to do this again; except of course when government changes tax legislation which would trigger changes in whatever it uses.

SAP now insists that everything runs in the SAP cloud. I would feel much happier if my tax records were kept in an HMRC cloud rather than a SAP one.

[Paul Crawford]

Re: Cost: "highly customised" vs bespoke ?

What would it cost HMRC to produce its own bespoke system - written from scratch ?

That would depend on which set of jokers it contracted the job to...

[Anonymous Coward]

Re: Cost: "highly customised" vs bespoke ?

>> What would it cost HMRC to produce its own bespoke system - written from scratch ?

> That would depend on which set of jokers it contracted the job to...

It would cost a lost less and therefore the private sector wouldn't be able to gouge the price.

[Peter2]

Re: Cost: "highly customised" vs bespoke ?

What would it cost HMRC to produce its own bespoke system - written from scratch ?

I once was chatting to the CTO of a software company. He said that a company had just spent many tens of millions trying to duplicate the feature base of their product before giving up and becoming one of their customers.

He found it hilarious, since in basically his words if they'd have asked then he'd have sold them a copy of the sourcecode and a license allowing them to do whatever they wanted for their own internal use for much less. For what they'd wasted he'd have happily have sold them the company and retired to somewhere sunny. (which he subsequently did when somebody else bought the company)

It's probably not that easy to do. However in the long term it's definitely the right thing to do.

[Anonymous Coward]

Re: Cost: "highly customised" vs bespoke ?

How much will it cost to make bespoke changes to Oracle?

Personally I'm not sure, but I'm sure there's someone in Birmingham who could offer an opinion on this

[cchas]

Re: Cost: "highly customised" vs bespoke ?

Many UK government systems were bespoke, some very well designed - but bespoke systems need an in house maintenance team that maintains the system aligned with the original design. Many of these systems were built on ICL platforms because that was government policy. Today some 30+ years after build these still sit on long obsolete platforms with UK government now paying a fortune for Fujitsu to keep platforms, that are actually the equivalent of a modern laptop, simply plugged in. There is no guarantee that these will continue to run as spares no longer exist.

There have been multiple efforts to migrate off these platforms - all have failed at great expense basically because no one is left who knows the totality of what the (primarily batch) software actually does and there's no comprehensive regression suite. The only way now is an analysis phase to identify core functionality, define appropriate testing etc then go find a package. To date DWP, MoJ, MoD etc have not been willing to bite the bullet - they just keep putting it off - budget constraints etc.

If you go the bespoke route you need to commit to maintenance - it's the agile fallacy which threw away decades of learning in software engineering - development is the smallest, least important part of the lifecycle. If your systems can change every month - great, go agile, if they need to just keep running for decades then agile offers disbenefits.

If you go the package route then the simple rule is change the business not the package. 'Highly customised SAP' has never been wise - I've never seen such an implementation that didn't lead to regrets and disproportionate downstream costs.

Early UK government 'contracts' did not retain the IPR and did not commit the 'supplier(s)' to keep the IPR up to date and keep current the ability to migrate the platform/support to another supplier.

The HMRC/Aspire contract(s) were better than this but the push to customise SAP was still down to the usual guff of 'our business is special, different to every other' - and yes when it went in SAP was still at the state where you could always find some German in the menu hierarchy.

Unless your core business is software then bespoke/heavy customisation is a nono.

[Anonymous Coward]

Re: Cost: "highly customised" vs bespoke ?

The other problem is that the government didn't want to keep their staff. As an ex civil servant who worked on those ICL mainframes, I was paid about a fifth of my first salary when I left, we were treated like crap by an employer who made it very clear that they didn't want us and even at one point made us compete for our own jobs... the result is that most of the good people left.

I know there's the cliche of the civil servants who do nothing and have no idea of the real world but my experience was that people in banks or mobile phone companies don't work any harder than the civil servants I worked with all those years ago.

[Anonymous Coward]

Ahh those were the days

Highly bespoke systems built to meet the customers actual requirements.

Monthly change requests.

Precision fixes and proper testing + documentation.

Then came the bean counters.

[Dr Who]

Scrap tax

As the cost of HMRC IT infrastructure approaches the total tax take, the cheapest option may be to scrap taxation.

[Jimmy2Cows]

Re: Scrap tax

Just simplify it. The main reason the damn thing costs so much to build, run and maintain is the sheer complexity of our tax laws. Slapping more and more lipstick onto an ever-fattening, aging pig.

Need to go back to basics on tax, rewrite the rules from the ground up. Massive simplification.

Never gonna happen of course. Too many vested interests keeping the existing loopholes open.

[vtcodger]

Re: Scrap tax

My rather vague recollection is that our Republicans here in the US tried that in the early 1980s. And, as I recall, they -- being rather less demented than their current namesakes -- actually did a not half bad job of it. The problem. Within a decade or so, all the exceptions, complexity, and outright lunacy had found it's way back into the US tax codes.

[Roland6]

Re: Scrap tax

Not sure if the tax laws actually are to blame for complex systems. For example, currently having to navigate VAT for charities and the de minimis limit. Once you’ve sorted out which transactions can and cannot claimed the VAT return you submit to HMRC is as per the standard used by any VAT registered business; the complexity is in your financial system and the spreadsheets you may be using to calculate the level of VAT you can reclaim.

[Anonymous Coward]

Re: Scrap tax

I believe the rule of thumb for judging UK tax complexity is the number of pages of legislation to support it.

The UK tax code has continued to grow over the years, from 5,000 pages in 1995, to 10,000 in 2010 and over 20,000 pages now. And with complexity comes loopholes and consultants.

[Tron]

I don't normally say anything nice about the government...

...but the HMRC portal does actually work OK. If you can jump the multiple hurdles to identify yourself and actually access it.

It will be a pity if they Oracle it. But as long as they are ready to print paper forms and send them out to everyone, I'm sure we'll cope.

[Spoobistle]

Nothing to see here

There aren't going to be any tax changes till 2029.

So we can keep on with the old system till then!

[Anonymous Coward]

Re: Nothing to see here

If the cost is sufficiently high enough to change the tax system then you might be right.

[vapoureal]

I'm just waiting for the new tax to pay for the new tax system.

[vapoureal]

The problem with a bespoke system is that when it all goes wrong - and it will in the Public Sector - you can't blame a third party.

[Longtemps, je me suis couche de bonne heure]

Why doesn't the Reg put in a freedom of information request to ask for a copy of the notice of tender letter inviting companies to bid for this work, and also asking how many companies put in bids.

[DenTheMan]

Morons.

Sap rigidity has sucked the life out of many a company.

It was always a devil of a business.

SUCKERS.

[James Anderson]

Programming in a c**p language

These ERP packages require so much customisation that you are effectively programming a complete system using a wierd config file syntax or if you’re lucky a proprietary and substandard scripting language.

What’s worse you need to repeat the exercise whenever the software vendor decides you must upgrade to the next release.

[ZoranGrbic]

Re: Programming in a c**p language

SAP's mafia-style tactics are mind-blowing.

They lure customers in with irresistible offers, then squeeze them dry because they have them in a tight spot.

This software should have an upgrade path while maintaining existing customization. It's criminal to force customers to ditch everything and switch to a new system that doesn't even play nice with SAP's old version. Talk about a curse!

And to top it off, taxpayers will foot the bill for a new version while SAP lays off tens of thousands of employees.

[cchas]

Re: Programming in a c**p language

To be fair SAP has always commited to providing an upgrade path that maintains customisations as long as your 'customisations' follow basic rules.

It's the organisations that won't adapt to the way SAP does business that demand customisations that block upgrades.

[Aitor 1]

Re: Programming in a c**p language

This is essentially buying a trailer home when you actually needed a cargo seaplane, and insisting on it being made to fly and float, and still be a trailer home.

[RegGuy1]

Here's a thought ...

They could simplify the tax system and, instead of using it as a political tool to buy votes to an ever increasing number of different groups, have a simpler system that can then be implemented with much simpler software.

Like I say, just a thought.

[Nurse! I'm out of bed again.]

[Roger Kynaston]

Oracle - hell no!

The update seems to suggest that they aren't going to give Larry any more of my taxes but I really hope they don't. They should talk to colleagues in Birmingham about that.

Anothing thing I wonder. Could there be a group of medium sized advanced economies with a roughy similar geographical location who could cooperate on procuring/designing a system that would deal with their, likely, similar issues of collecting their dues from a recalcitrant citizinry?

Icon because the Fartarse!

[Efer Brick]

I though taxt didn't need to be taxing