Inland Revenue is disrupting its own business to deliver connections to its wider ecosystem and replace creaking 30-year-old mainframe systems.
A major stage of the change, a new system for filing GST returns, was rolled out in February.
Overall, the programme is without a doubt New Zealand's largest and costliest business transformation project and is not without risk. But IRD also faces a monumental risk by not changing.
The old system was significantly paper-based, but highly automated, chief technology officer Gary Baird said last week.
To enable changes to the child support system on the old system a few years ago was difficult and, at over $100 million, costly. The new technology being developed should be better able to manage such changes to social policy and legislation.
IRD's transformation, which without capital charges, depreciation and inflation adjustments is projected to cost $1.8 billion, will replace those aging systems and create connections to data held in banks, accounting packages, payroll systems and other repositories of taxpayer information.
That should, in turn, enable real-time and increasingly automated processing and save taxpayers time and effort.
The transformation could also help correct some unfairnesses in the system, Baird told an audience at the CIO Summit last week, getting the right amount of money to and from people at the right times rather than relying on income estimates often made months in advance.
Half of the funds to pay for the transformation, which will be based on software from US-based Fast Enterprises, will come from funds generated and saved along the way, Baird said. The project is expected to generate $5 billion in extra revenue and save $500 million in administration costs over ten years.
Listen to Baird's entire presentation below and follow along with his PowerPoint, also embedded below.
Gary Baird's presentation.