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A glimpse of the future: Inland Revenue's ICT spending shows signs of normalising

As IRD's ICT investment plummets, big-name suppliers may have to look elsewhere for revenue.
  • Rob O'Neill (New Zealand Reseller News)
  • 21 July, 2021 18:25

Inland Revenue has provided a glimpse of what its "business as usual" ICT spending could look like as the end of its $1.8 billion transformation programme nears.

The final software release, expected this October, will move child support to new systems and processes and upgrade online services for customers and the Start software IRD staff use.

Now, in answer to Parliamentary questions ahead of this year's Budget, IRD has itemised the $1 million-plus contracts it awarded in the nine months to the end of March 2021.

Many of the technology providers that dominated previous lists were either absent or winning significantly less work.

Software quality and assurance appears to be one part of the transformation that could have a longer tail, however.

Primary provider Assurity Consulting topped the 2021 contract list so far, winning a new deal valued at $17.4 million, down from $21 million in each of the previous two full financial years.

The provider of IRD's new core tax software, US-based Fast Enterprises, does not feature in the 2021 list at all so far after scoring eight contracts worth $67.6 million in 2020.

It was also a real estate rather than an ICT contract that was reported as IRD's second largest by value so far in 2021, a $7.9 million deal awarded to Cushman & Wakefield NZ.

Deloitte-owned SAP specialist Team Asparona came in third, with a $6.9 million contract after not featuring in IRD's 2020 list at all and winning a $1.5 million deal in 2019. 

Oracle was fourth at $5.7 million so far in 2021 after being ranked 12th in 2020, with two contracts worth nearly double that, at $9.6 million.

Inland Revenue has been implementing new cloud-based enterprise support software from Oracle with the help of Accenture.

Credit: Supplied

Analytics and business intelligence software vendor SAS Institute filled out the top five with two contracts totalling $5 million, down from $10 million in 2020 and $16.2 million in 2019.

Spark ($4.6 million), Accenture ($3.4 million) and SAP ($1.3 million) also feature in the 2021 list.

In comparison, Spark was awarded three contracts worth $9.7 million in 2020 while its Revera data centre and services unit, absent from the 2021 list so far, picked up another worth $9.9 million.

Revera, now CCL, is supplying data centre services for the new tax system.

Accenture had been one of the major suppliers to the transformation programme, winning 11 contracts in 2020 valued at $32.6 million and five totaling $36.8 million in 2019.

As for SAP, while IRD selected Oracle to supply its new enterprise support systems, it opted to stay with incumbent SAP for its payroll software, in part due to time-pressure to vacate its Unisys-operated data centres.

"We have since investigated a number of options and have concluded that moving our existing payroll application to a cloud-based solution provided by SAP is the most viable approach," a spokesperson said in March. 

Unisys NZ was absent from IRD's 2021 contract list altogether after winning four deals in 2020 totaling $32.5 million.

The company reported a revenue low of $43 million in the year to 31 December 2020 as it prepared to close its legacy local data centres, down from a strong $60.3 million in 2019.

Datacom was also absent so far in 2021 after picking up two contracts worth a total of $3.9 million in 2020.

In addition to the nine-month reporting cut-off date, IRD noted the reported values of the above contracts were the initial value. 

"[Contracts] may traverse a number of financial years, and exclude any financial impacts if the contract is extended past the initial contract term," the department said.