Hundreds of millions up for grabs as UK taxman set to stick with SAP ECC6.0

Updated The UK tax collector has opened conversations with tech support companies to keep its ageing SAP estate running in a contract award which could be worth up to £400m.

Her Majesty's Customs and Revenue department collected around £718.2 billion ($855 billion) in tax in 2021/2022 with a system based on a "highly customised version of the SAP ECC6.0," which was launched in 2005.

In a tender document published late last week, the government department said it intended to introduce a framework deal to continue to support the system for another four years, until December 2026.

HMRC was "not yet ready to invite bid applications but early notification has been provided and some dialogue may be possible," it said.

"Enterprise Tax Management Platform (ETMP) currently uses a highly customised version of the SAP ECC6.0 commercial software package. This will be a single lot framework and is aiming to achieve a pool of suppliers with demonstrable global expertise in SAP's Tax & Revenue Management (TRM) module who have, or are willing to, invest in UK capability."

The framework includes "major changes" only. Smaller changes are out of scope, the tender notice said.

The major tech procurement raises a few questions. Firstly, SAP is set to end support for ECC6.0 in 2027, less than a year after the proposed contract ends. But migration plans remain unclear. In March last year, a shared services strategy suggested HMRC would stay with SAP, although whether it would migrate to the more recent S/4HANA platform was not specified.

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Secondly, bidders for the deal will want to know how it ties in with another HMRC support contract for its SAP tax system, awarded in January this year.

We have asked HMRC to comment.

Capgemini won the £51 million three-year deal "to support Her Majesty's Revenue & Customs' Enterprise Tax Management Platform (ETMP) Enterprise Operations (EOPS) Run & Associated Change Services as a sole supplier under a single lot."

The French IT outsourcer began work to build and support the systems under the controversial £10 billion Aspire contract, a joint venture between Capgemini, Fujitsu, and HMRC first signed in 2004.

According to a case study published in 2012 [PDF], Capgemini ran the project to implement a new SAP-based ETMP system for all customer-facing tax systems, and migrate Stamp Duty Land Tax (SDLT) onto it, saving £2 million a year, the vendor claimed. ®

Updated to add July 20 12:00 UTC

An HMRC spokesperson got back us with answers to some questions. We asked what will happen when ECC6.0 goes out of support in 2027 and were told: "While 2027 is the end of mainstream support, SAP has announced the ability for optional extended support for ECC 6.0 through to 2030. However, HMRC is already planning to migrate to S/4 HANA. Work has started (the 'Digital Core Accelerator') with HMRC and SAP that will inform the size and shape of a later project/programme to migrate to S/4 HANA. HMRC is moving because of the IT obsolescence time frame but also for the business improvements of the modern platform."

We also asked how the deal would work alongside the £51 million three-year contract awarded to Capgemini "to support Her Majesty's Revenue & Customs' Enterprise Tax Management Platform (ETMP) Enterprise Operations (EOPS) Run & Associated Change Services as a sole supplier under a single lot."

The Register was told: "The contract awarded to support HMRC's Enterprise Tax Management Platform (ETMP) Enterprise Operations (EOPS) Run & Associated Change Service is to run the service as well as to provide support and deliver small and emergency changes for the current ECC 6.0 ETMP and EOPS platform, to ensure service continuity and to protect services that ultimately affect our end users. The new contract went operationally live on 1 July. We will work over the lifetime of this contract and possibly beyond to migrate to S/4HANA."