Tax Office redefines $180m EDS deal

The Australian Taxation Office (ATO) is redefining its longstanding relationship with outsourcer EDS in an effort to cut costs and extract better performance and service delivery from its current $180 million contract with the vendor.

Taxation CIO Bill Gibson told Computerworld that while he was generally happy with the performance so far of EDS in implementing an enterprise-wide IT overhaul known as the Change Program, he still wants to drive IT costs down and return on investment up.

"We have a current [annual IT] budget of around $412 million. We are looking at pushing that down. Our [customer communications and transactional] channel profile is changing dramatically," Gibson said, adding the ATO wanted to attract more people to do business online via its portal offering.

Asked about how the ATO intended to better manage the EDS relationship, ATO second commissioner (technology) Greg Farr did not mince words. Farr said ATO is in the process of changing EDS' contractual vendor performance benchmarks from a technology-centric model to a business-centric model. "[We] have redefined key deliverables for EDS - measurable outcomes based on the business, not on whether they delivered 1600 [technical] requirements. [We have said] we are going to judge you on the outcomes...you deliver," Farr said.

Gibson said that to get better value, ATO's helping-hand approach to EDS is also being extended to other key IT suppliers, who have been told to fall in line with what the ATO calls "business-centric reporting" to generate metrics on their performance.

"We've told all the vendors what we're unhappy with and what we need to change [as an organization]. Business-centric reporting will translate into a formal service level agreement eventually [as contracts and opportunities arise]. EDS recognizes and we recognize we are in a different world, " Gibson said.

This also includes calculating the impact of non-performance by vendors as a total cost to the ATO rather than on a particular section or project. "We are asking them what the business loss [the cost borne by the whole enterprise] will be," Gibson said.

However, Gibson's frugality does not stop at the Tax Office. Keen to share the good oil on pushing vendor performance, Gibson has also been hosting informal lunches for other public sector organizations hungry for lessons learned while pushing their new model for business.

Describing the get-togethers as an opportunity to discuss standards, methodologies "and how we [collectively] look at things", Gibson said the ATO preferred "sandwiches and a cup of tea" over Canberra's finer dining establishments.

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