Revenue Case Study Sean Connolly


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  • Revenue Case Study Sean Connolly

    1. 1. T ransforming a L arge O rganisation - the successful experience of the Irish Revenue Commissioner s IPA October 2008
    2. 2. <ul><li>Topics: </li></ul><ul><ul><li>The Revenue Business </li></ul></ul><ul><ul><li>Transformational Change </li></ul></ul><ul><ul><li>What have we learned? </li></ul></ul>
    3. 3. By three methods we may learn wisdom: First, by reflection, which is the noblest; Second, by imitation, which is the easiest; And third, by experience, which is the bitterest. Confucius
    4. 4. <ul><li>Citizen/Customer </li></ul><ul><li>Organisation Member </li></ul><ul><li>Domain/ICT Expert </li></ul><ul><li>Public Servant Reformer </li></ul>Perspectives?
    5. 5. Tax Collection <ul><li>Key function in organised society </li></ul><ul><li>As old as time </li></ul><ul><li>Unpopular </li></ul><ul><li>Customers? </li></ul>
    6. 7. Apples + 10% Vat
    7. 8. Fair? Efficent? Complexity? Impact on the market? How much? Compliance Costs? Evasion? Deterrence? Redistribute Wealth? The perfect tax system? Certainty? Convenience?
    8. 10. Samuel Johnson’s Dictionary 1755 “ Excise ….a hateful tax levied upon commodities and adjudged, not by the common judges of property but by wretches hired by those to whom the Excise is paid.”
    9. 11. The Revenue Story <ul><li>The old Revenue </li></ul><ul><li>Why did we change? </li></ul><ul><li>What did we do? </li></ul><ul><li>Impact on our Customers? </li></ul><ul><li>What could be of value to you? </li></ul>
    10. 12. Revenue in the 1990s “ If it ain’t broke don’t fix it” <ul><ul><li>Good track record </li></ul></ul><ul><ul><li>Annual collection targets exceeded </li></ul></ul><ul><ul><li>Successes </li></ul></ul><ul><ul><ul><li>Good computer systems </li></ul></ul></ul><ul><ul><ul><li>Self assessment for the Self Employed </li></ul></ul></ul><ul><ul><ul><li>1992 Single Market </li></ul></ul></ul><ul><ul><ul><li>Relocation of 1,300 staff from Dublin </li></ul></ul></ul>
    11. 13. Pressures <ul><li>Customer Service concept </li></ul><ul><li>Our “captive market” was changing </li></ul><ul><li>Greater Business sophistication & wealth creation </li></ul><ul><li>Increasing evidence of non-compliance </li></ul><ul><li>Public expectation s increasing with economic growth </li></ul><ul><li>Speed of change in environment </li></ul><ul><li>Technology opportunities </li></ul>
    12. 14. Restructuring – where it started <ul><li>Statement of Strategy 1997 – 1999 </li></ul><ul><li>“ a root and branch review of our organisational structure… to ensure … the best possible fit between how we organise ourselves and our strategy to improve overall effectiveness and efficiency .” </li></ul>
    13. 15. Incoherent Claims, reliefs, allowances, entitlements, etc. VRT CRO Tax Clearance VAT PAYE / PRSI Returns (All) Income Tax Corporation Tax Start up Visit Certification Payments Refunds Inspection Admin. Policy Excise Licence CG’s CI’s Local Coll. Nenagh Custom House P35’s TFA’s Payments EFT CI’s CG’s Local Coll. Enforcement Enforcement CG’s Local Coll. Enforcement Same as for VAT Vat Refund BIK CI’s CG’s C&E CI’s Taxpayer (e.g. Publican)
    14. 16. How we saw a Customer
    15. 17. How we administered the country <ul><li>6 different administrative maps </li></ul><ul><ul><li>Tax Districts </li></ul></ul><ul><ul><li>Customs Collections </li></ul></ul><ul><ul><li>Excise Districts </li></ul></ul><ul><ul><li>Collector General’s Bailiwicks </li></ul></ul><ul><ul><li>Revenue Mobile Service Regions </li></ul></ul><ul><ul><li>Local Collection Regions </li></ul></ul>
    16. 18. Customers East & South East Region South-West Region Border Midlands West Region DublinRegion Before After Taxes & Duties / functional hybrid
    17. 19. Coherent Taxpayer (e.g. Publican) Revenue District
    18. 20. Before After
    19. 21. What the boss wants… <ul><li>“ When I have a problem I want to see the whites of one pair of eyes, not twenty pairs of heels” </li></ul>
    20. 22. Divisions & Reporting Relationships Strategic Planning Human Resources ICT and eBusiness Operations Policy & Evaluation Investigations & Prosecutions Revenue Solicitor Chairman Commissioner Commissioner Collector General Customs Direct Taxes Policy & Legislation Direct taxes Interpretation & Internationall. Indirect Taxes Border Midlands West Region Dublin Region East South-East Region Large Cases South-West Region
    21. 23. Customer Service <ul><li>Lo-call phone service </li></ul><ul><li>Tax Credits replaced Tax Allowances </li></ul><ul><li>Tax Credit at Source </li></ul><ul><li>Website [] </li></ul><ul><li>Texting </li></ul><ul><li>Tax Briefing Bulletin for Practitioners </li></ul><ul><li>Better Public Offices </li></ul>
    22. 24. Belastingdienst The Dutch Tax & Customs Administration’s motto <ul><li>We can’t make it pleasant, but we can make it easier. </li></ul>
    23. 25. The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers, with the smallest possible amount of hissing. -- Jean-Baptiste Colbert
    24. 26. Common functions across taxes Registration Returns Assessment Collection Caseworking/Intervention/Management Information PAYE/PRSI Employers PAYE Employees Value-Added Tax Income Tax Corporation Tax Others >
    25. 27. Registration Returns Collection Assessment Intervention Management MIS Registration Returns Collection Assessment Intervention Management MIS Registration Returns Collection Assessment Intervention Management MIS Tax 1 Tax 2 ..Tax n From multiple disparate systems Still have to cater for certain individual tax characteristics Tax 1 Tax 2 ..Tax n Old systems – would have had to be replaced individually in any case CRS ITP AIM CIF ROS To a single integrated framework Common Registration Common Returns, Collection etc Common Caseworking Common Business Intelligence … then Internet enabled
    26. 28. What the caseworker sees <ul><li>Technology enabled a unified view of the customer </li></ul><ul><li>All the customer’s tax and duty information is brought together </li></ul>
    27. 29. … ...whether dealing with transactions, case-working, doing analysis, or looking up registration details Provides consolidated customer view at all times
    28. 30. Advances in Technology <ul><li>The possibilities exceed our imagination </li></ul><ul><li>The Internet </li></ul><ul><li>Mobile communications </li></ul><ul><li>Information Society Fund </li></ul>
    29. 31. How was it achieved? <ul><li>Studies of best practice by a small team </li></ul><ul><li>Management commitment built on consensus </li></ul><ul><li>Communication with internal customers </li></ul><ul><li>Consultation & involvement: pilot projects </li></ul><ul><li>Determination to overcome obstacles </li></ul>
    30. 32. The Pilot Project <ul><li>Norman Gillanders, Assistant Secretary </li></ul>
    31. 33. Restructuring – the Players <ul><li>Project Board with overall responsibility for organisation restructuring. </li></ul><ul><li>Management Roadshows </li></ul><ul><li>Project Teams and Regional Committees plan, design and implement new Divisions. </li></ul><ul><li>Focus Groups and Expert Groups facilitate wider participation. </li></ul><ul><li>Consultation and communication at every step in the process. </li></ul><ul><li>Bulletins/Gateway </li></ul>
    32. 34. Restructuring – The Process Spring 2001 Spring 2003 Plan High-Level Design Project Board Detailed Design Project Board Implementation Plan Project Board Implementation Communication Consultation
    33. 35. Industrial Relations <ul><li>Single Grading Structure: very desirable </li></ul><ul><li>Reclaimed the ‘Radio Station’ </li></ul><ul><ul><li>Briefing sessions </li></ul></ul><ul><ul><li>Hotline for queries </li></ul></ul><ul><ul><li>FAQ service </li></ul></ul><ul><ul><li>Full text of agreement available </li></ul></ul><ul><li>Integration initially accepted by 4 of the 5 unions </li></ul>
    34. 36. But getting there is difficult <ul><li>It’s like changing the wiring of your house while keeping the lights on </li></ul>
    35. 37. Why change? <ul><li>“ An organisation that doesn’t change at the same speed as its environment dies” </li></ul>
    36. 38. Total arrears as % of total gross receipts Total arrears as % of total gross receipts decline in arrears: from 37% to 1.9% in 2007
    37. 39. “ We trained hard….but everytime we formed up teams we would be reorganised. I was to learn that we meet any new situation by reorganising. And a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralisation” Petronius Arbiter, 22-66 A.D.
    38. 40. <ul><li>For the good citizen: </li></ul><ul><ul><li>a better service/single point of contact </li></ul></ul><ul><ul><ul><ul><ul><li>greater equity </li></ul></ul></ul></ul></ul>For the tax dodger: The Results? <ul><li>a real probability of detection and punishment </li></ul>For Revenue: <ul><li>more efficient and flexible organisation </li></ul><ul><li>new vigour and excitement </li></ul>
    39. 42. To tax and to please, no more than to love and to be wise, is not given to man Edmund Burke, On American Taxation , 1775, Graduate of Trinity College, Dublin.
    40. 43. Analysis of our Experience Any useful lessons for you?
    41. 44. Lessons <ul><li>Get a clear and shared vision </li></ul><ul><li>Take the customer’s perspective </li></ul><ul><li>Communicate, communicate, communicate </li></ul><ul><li>ICT can be a facilitator and not a barrier </li></ul><ul><li>Learn from other’s experience </li></ul><ul><li>Use Pilot projects </li></ul><ul><li>Fix a date </li></ul><ul><li>Recognise the barriers: </li></ul><ul><ul><li>Culture </li></ul></ul><ul><ul><li>Self interest/power </li></ul></ul>
    42. 45. Causes of Change <ul><li>New demands </li></ul><ul><li>Environment </li></ul><ul><li>Workforce </li></ul><ul><li>Structure </li></ul><ul><li>Technology </li></ul>
    43. 46. Managing Organisation Change <ul><li>Elements </li></ul><ul><ul><li>Tasks </li></ul></ul><ul><ul><li>Individuals </li></ul></ul><ul><ul><li>Formal Organisation Arrangements </li></ul></ul><ul><ul><li>Informal Organisation </li></ul></ul><ul><li>Problems </li></ul><ul><ul><li>Resistance </li></ul></ul><ul><ul><li>Control </li></ul></ul><ul><ul><li>Power </li></ul></ul>
    44. 47. Task Structure Culture/Reward Mechanisms Process Individuals Technology ICT Strategy Output Organisation Framework
    45. 48. Strategy <ul><li>Business: </li></ul><ul><ul><li>Shareholder value </li></ul></ul><ul><ul><li>Win/keep profitable customers </li></ul></ul><ul><ul><li>Competition </li></ul></ul><ul><li>Public Service: </li></ul><ul><ul><li>Political Agenda – short term </li></ul></ul><ul><ul><li>Public Interest </li></ul></ul><ul><ul><li>Minimise risk </li></ul></ul>
    46. 49. Specific individual behaviour at work is as likely to arise from the nature of the role which the individual occupies, its relation with other roles, and with the entire structure of the social system within which that role is positioned, as from the personality of the individual – Wilfred Brown, Organisation , 1971, p.23
    47. 50. Culture <ul><li>Task vs Role </li></ul><ul><li>Caution </li></ul><ul><li>Written analysis </li></ul><ul><li>Hierarchical Control </li></ul><ul><li>Precedents </li></ul><ul><li>Risk versus rewards </li></ul>
    48. 51. Openness, frankness, genuine disclosure of objectives and of information works well in a pure task culture but they can put one at a big disadvantage in interactions with the more bargaining approach of the role or power culture - Handy, p. 244
    49. 52. ICT Architecture <ul><li>First Computer installed in 1963 </li></ul><ul><li>ICT is indispensable </li></ul><ul><li>Growing range of skills needed </li></ul>
    50. 53. Technology <ul><li>The limit is our imagination </li></ul><ul><li>Organisation design is from the days of quill pen and no communications </li></ul><ul><li>Self service is the ideal </li></ul><ul><li>24x7is the norm </li></ul><ul><li>New challenges: security, complexity, mobility, access </li></ul>
    51. 54. Transition <ul><li>The temporary process of getting from the current state to the future state. </li></ul>
    52. 55. How it is <ul><li>How we want it to be </li></ul><ul><ul><li>No mistakes </li></ul></ul><ul><ul><li>Rational </li></ul></ul><ul><ul><li>Certain </li></ul></ul><ul><ul><li>Permanent </li></ul></ul><ul><ul><li>Based on precedent </li></ul></ul><ul><ul><li>Equitable/fair </li></ul></ul>When two worlds collide! Innovation Risk Rewards Win/lose Try again! Failures Chance? How it is How we want it to be
    53. 56. <ul><li>Laying the Foundation Stones </li></ul><ul><li>VAT assigned to Chief Inspector/Collector-General </li></ul><ul><li>Commission on Taxation </li></ul><ul><li>IMF Visit Dec 1986 </li></ul><ul><li>Self Assessment 1989/90: Press Office : New Board’s Report </li></ul><ul><li>Data Study Dec 1989 </li></ul><ul><li>Integrated Taxation Proposal 1990 </li></ul><ul><li>Common Registration 1996 </li></ul><ul><li>The Dirt Enquiry </li></ul>
    54. 57. How can you win? The Common Herd being wise after the event will say either: ” How easy, why think twice about so obviously correct an operation” or will say: “ Criminal idiots to attempt the impossible” - General Sir Aylmer Hunter Weston, 29 th Division, April 1915, before the Gallipoli Campaign
    55. 58. “ It is not the strongest of the species that survives, not the most intelligent, but the one most responsive to change” Charles Darwin “ An té nach bhfuil láidir, ní foláir do bheith glic”
    56. 59. Questions?
    57. 60. SAQ 5 <ul><li>Have you experienced any changes in your dealings with Revenue? </li></ul><ul><li>Have services improved or deteriorated? </li></ul><ul><li>What remains unchanged? </li></ul><ul><li>Any signs of technology? </li></ul>