Wellington, New Zealand (1996)

Understanding Business

MBA & Associates (MBA) and other internal staff and external consultants engaged IRD's senior managers in structured discussions to understand the real drivers and obstacles to change within their respective divisions and branches. Developing 'plain English' business outcomes, the exercise created an informed and trusted information platform for the remainder of the project.

Identifying Opportunities

MBA developed a paper that described a number of options for how IRD might be structured, and the businesses it might operate in five years hence in 2001. It considered whether the IRD might continue to operate as a debt manager not only for tax but also for the Departments of Social Welfare and Education. The major factor influencing the design of the eCommerce strategy was the report from the Victoria University of Wellington estimating that the cost to businesses of compliance with tax regulations including the IRD's infrastructure was NZD1.5 billion per annum.

Redefining Processes

MBA determined that the key to making the IRD's interface with the business community was stakeholder enrolment and governance. Appropriate governance and accountability was identified. Work commenced on policy frameworks for information management, business risk assessment and budget requirements.

To overcome the inconsistent quality of advice and processes in existence, the project recommended a comprehensive overhaul of business processes enabling a more streamlined relationship to exist.

Creating Value

Rapid design of initiatives allowed key stakeholders to see the benefits that come from well planned and controlled deployment of electronic commerce. The eCommerce applications that would support a streamlined relationship with the business sector who contributed the overwhelming volume of returns through PAYE, GST and FBT would have a profound effect on reducing the compliance costs of businesses.

Supporting Objectives

The eCommerce strategy had a clear objective to reduce the costs to businesses of compliance with the tax regime by recognising that most businesses from SMEs to large corporates were computer users of some scale. The other key aim supported was to find an alternative means of providing high quality consistent advice from a central database rather than have to deal with the variable quality of advice from IRD officers.

Improving Performance

By reducing the volume of business paper-based returns by introducing electronic service delivery, the number of processing centres was reduced from three to one. Eliminating the need for PAYE-only taxpayers to submit any form at all also helped the realisation of this benefit. This offered the senior management team the options of reducing costs or to use the savings to improve the quality and skills of IRD staff to deal with exceptions rather than routine paper processing.