Inland Revenue

Independent Quality & Technical Assurance

Business Transformation Programme

Version 6: Final

September 2015 This report contains 89 pages

Inland Revenue Independent Quality Assurance

Final September 2015

1.3 Overview of our Assessment

Overall the Programme continues to be managed in accordance with good industry practice, and the controlling processes are, in our view, robust and fit for purpose. Through the high-level design phase ('HLD'), the Programme has generally fulfilled its commitments, although there is some relatively minor slippage apparent in completion of certain phase deliverables. During this phase, also, the Programme has experienced some distraction and escalated risk, resulting from unclear accountabilities for the approval of the "JCAPS to Fusion Middleware" (J2FM) business-case. In parallel with the HLD, the Programme has also successfully concluded the procurement for the COTS provider.

We have noted the following summary points for consideration:

1) Governance: The current governance mechanisms continue to function effectively, but will need to be modified to accommodate the changing demands of the detailed-design phase.

2) All-of-Government services: Rigorous scope management is critical to the success of the Programme. In our view the Programme is appropriately supporting the Public Sector objectives, initiatives and key result areas. These sector requirements have to be assessed against the appropriate scope management processes and priorities placed on the Programme. Both the Programme and central/sector agencies need to acknowledge and accommodate these disciplines so as to avoid situations such as those that caused the delay to the approval of the J2FM business case and thereby increased the delivery risk of the programme.

3) Benefit management: Given the recent decision to accelerate submission of the revised business-case, the team is now under considerable pressure to produce a high quality benefits plan in support of that submission, and we understand that they have engaged third-party support to assist in this.

4) Programme Management practices: These practices are generally robust and effective. Teams are very conscious of the need to meet deadlines at the right quality. However, there has been some timescale slippage (in part resulting from external contingencies), and as a consequence the Programme is unlikely to complete all HLD deliverables on schedule, although the team are working hard to contain the slippage and minimise any impact on the critical-path. Deliverables have been prioritised with an emphasis on ensuring that all high priority deliverables are complete by the end of the HLD phase.

5) Resourcing: The Programme is currently adequately resourced, and any concerns that we have are focussed on the forward view and the known but potentially significant risk around resources, with respect to:

• The "key-person" risk in some roles; • Availability of the necessary (in some cases, rare) skills in both Wellington and in the wider region;

• Potential competition for resources from other government and private sector transformations in New Zealand. The Programme is acting to mitigate this risk, but in our assessment the residual risk remains significant.

0 2015 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss 3 entity. All rights reserved. Printed in New Zealand. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International.

KP G Inland Revenue

Independent Quality Assurance Final September 2015

6) Dependency management: In general the Programme is taking a robust and effective approach to dependency management. However we recommend that the wider IR portfolio management methodology, process and function should be addressed to ensure that enterprise wide processes are similarly robust, given that the Detailed Design phase is likely to involve more complex inter-dependency scenarios.

7) TQA2: The second Technical Quality Assurance focussed on nine areas of technical architecture and design governance. Whilst our review has generated 17 specific recommendations, they are at a detailed technical level, and are designed to assist the programme as it moves into Detailed Design. None of these recommendations warrant inclusion in this Executive Summary.

8) COTS RFP process: In our assessment, the Programme's approach to the COTS REP has been robust and has resulted in a high quality decision making process that has selected an appropriate and "fit for purpose" solution. The Programme team are currently working with the selected COTS provider to understand the implications for the future phases, with respect to costs, timescales, the potential need for further COTS procurements and the impacts on governance and methodology.

It is clear from our summary assessment above, and illustrated in the Programme Control Strengths on the following page, that the Programme continues to be well controlled and is working towards both its short and longer term goals. The key points we wish to emphasise from our detailed review are noted in sections 2, 3 and 4 below.

0 2015 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss 4 entity. All rights reserved. Printed in New Zealand. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International.

KPMG Inland Revenue

Independent Quality Assurance

Final September 2015

Programme Control Strengths Programme Governance

4411 lI

ftr Scope & scope management

TOW

Organisational Change P ON Programme management OP

P 40 °Ogg

approach Ip Resources

Methodology 111Z Risks & issues

,Irq-nmunications management

Procurement

Benefits Realisation

Quality management

IQA 3 / TQA 2 —IQA 2 / TQA 1

IQA 1

Time & schedule

Cost / budget

(3 2015 KPMG, a New Zealand partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss 5 entity. All rights reserved. Printed in New Zealand. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International.