In Singapore, a big step forward in the evolution of revenue services is happening right now. The Inland Revenue Authority of Singapore (IRAS) recently committed to rebuilding its entire suite of tax administration applications in the ‘G-cloud’, an instance of public cloud dedicated solely to the government.  

It’s the first tax agency worldwide to take this step. But others will have to follow. In fact, taking into account technology advances and the scale of benefits on offer, I’d argue that the move to cloud will soon be imperative.   

This is the first in a two-part blog series from me, looking at what the cloud has to offer revenue agencies, and how they can start to overcome the obstacles they’ll encounter on their cloud journeys. 

Varying levels of engagement

Right now, we’re seeing some quite significant differences in how tax agencies view the cloud. Some can be classified as ‘engaged’.  They are working on the gradual movement of their systems, including taxpayer data, to cloud services. One example? The UK’s HMRC, which now hosts some of its core systems in the cloud. Others are actively planning how best to migrate systems to the cloud. 

Then there are agencies that are more ‘tentative’. Cloud is the direction of travel for them, and they are migrating non-taxpayer data and applications to the cloud. These agencies are yet to commit to holding taxpayer data in the cloud, while recognizing that moving such data to the cloud is an inevitability at some stage.  

Others, however, are ‘uncomfortable’ with the cloud. The discomfort is principally centered on Europe, largely due to data sovereignty concerns and, in particular, legal requirements regarding tax data storage and destruction that necessitate data remaining in-country.  

Assuring data sovereignty demands certainty and trust in data location, systems security, encryption, and a range of other features. Such trust takes time to build up with cloud providers. A more general lack of familiarity with the technical side of cloud adoption is another reason some agencies feel uncomfortable.   

Identifying the barriers

So this is the state of play right now where cloud adoption is concerned. There’s progress, certainly. And we’re seeing some tax agencies starting to take advantage of the new customer experiences, cost effectiveness, flexibility and control that cloud-native models provide. But progress is slow and even leading agencies have limited applications in the cloud So what’s holding them back? 

Many have more immediate priorities, meaning the cloud has yet to rise to the top of their ‘to do’ lists. There are also upcoming cultural and skills issues to take into account. Moving to a more cloud-native world means moving to a world where agencies work in a more agile way across the entire organization, not just in IT. The role of their operations team has to change. And there’s also a wide range of new technology skills to learn, recruit and retain.  

Then there’s modernization. Cloud adoption inevitably brings with it systems modernization, if not immediately then a little further down the line. And not all agencies have the skills they need to organize, govern and run multi-phase systems development programs – particularly when they have to continue meeting pressing support needs at the same time. 

 

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Get over the obstacles to realize the benefits

These issues are facts of life for many agencies. But there are some very good reasons why tax agencies should start their cloud journey now. In my next blog, I’ll explore the imperative for cloud adoption, the potential value of cloud (and I should underline that value is not a given!), and the learning process to which agencies will have to commit.

A learning process is inescapable in addressing the significant procurement, operational, skills and cultural challenges that have to be overcome to successfully adopt a cloud-first approach to technology.

I’d love to hear your views. So please get in touch and read the next blog in this series on revenue agencies and cloud.

 

This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors. This document refers to marks owned by third parties.  All such third-party marks are the property of their respective owners.  No sponsorship, endorsement or approval of this content by the owners of such marks is intended, expressed or implied. 

David Regan

Managing Director – Consulting, Revenue Lead