Her Majesty’s Revenue and Customs: Efficient Revenue Collection

To sustain growth, Her Majesty’s Revenue & Customs (HMRC) was to identify massive savings while growing revenue. Accenture helped it use business process management (BPM) to develop the agility to achieve its goals.

HMRC is a non-ministerial department of the UK government responsible for the collection of taxes and the payment of some forms of state support. HMRC was formed in 2005 after the merger of Inland Revenue and HM Customs and Excise Departments.

Revenue agencies are increasingly being forced to make significant changes to their operations due to the pressures of economic instability and globalisation. HMRC too was facing challenges on several fronts.

One of the key challenges was reducing costs while increasing revenue. HM Treasury was looking for departments to cut their operating costs by up to 25 percent, which in turn meant that HMRC had to identify savings of more than £1 billion over the next three years.

To respond effectively to change, businesses’ operations must be transparent, efficient, agile, deliver high quality and simultaneously comply with legal and other regulations. Business process management has been a trusted method for aligning key operational processes with corporate strategy and bringing them up to speed as part of major transformational efforts. Its power lies in its ability to help organisations tighten the integration among business strategy, information technology and people-based execution.

HMRC wanted to build a process management capability aimed at increasing efficiency across its core services and thereby achieving high performance. In addition, the department wanted to ensure its most critical processes were fully aligned with its strategy and with industry best practices, in addition to providing the necessary tools, infrastructure, techniques and coaching for sustainability of their processes.

HMRC enlisted Accenture’s support because it had worked closely with Accenture at a strategic level over several years.

Accenture worked alongside the business and central process reengineering team in the development of the process management capability. It helped in the definition and creation of the function, the development of the required tools and assets and the scenario modeling and pilot implementation.

Realise value faster
In the first phase of the project, Accenture developed a process management capability for HMRC that provided a common framework and tools for describing, costing and managing business processes that could be implemented across the department.

The next step was to gain the key stakeholders’ support to establish a costing framework, which gave the executive committee the opportunity to understand where the major areas of cost were located within the organisation. In addition, Accenture harnessed the Corporate Modeler Suite v2009.2, a leading enterprise modeling solution, which enables teams to visualise, analyse, document and optimise an organisation’s business processes and systems.

The process models in a repository also allow what-if analysis, upfront simulations and a method for continuous management and improvement.

In the second phase of the project, the simulation work carried out by Accenture for value-added tax registration transformation helped accelerate the design phase of the value-added tax (VAT) transformation program, and provided confidence that its intended benefits could be achieved. This involved baselining simulation processes as well as defining, simulating and evaluating various to-be scenarios for VAT registration.

Deliver measurable results
The newly acquired process management capability provides a common framework and tools for describing, costing and managing the business processes that can be implemented and used across HMRC. It also provides a capability to support and help the continuing HMRC change program and gives HMRC a tool for more consistent decision making—assisting the finance team in allocating the department’s funding to increase efficiency and reduce costs.

Such a focus on process excellence will help HMRC boost its efficiency, agility and responsiveness to change, thus making significant headway on its journey toward high performance.