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Legacy systems have been derided as the key barrier to modernisation efforts for large organisations for decades.
Today we see a fundamental shift in organisational IT capabilities from a traditional, in-house, set of monolithic IT architectures to one built on application programming interfaces (APIs), containers and cloud technology. The flexibility and speed of change needed from the new IT organisation demand a microservices approach, with highly modular applications, and unprecedented scalability, reliability, and agility.
This major change across all industries is driven more by business demands than technology reasons. In other words, it isn’t important because of improved performance, efficiency or its impact on the IT department (like more incremental upgrades). It is important because the new technology architectures support a fundamental change in how organisations operate in partnership with others.
In Accenture’s Technology Vision 2018, our latest research into major technology trends, we call this shift ‘frictionless business,’ highlighting how businesses increasingly depend on technology-based partnerships for growth, and how a microservices approach enables this. For Revenue Agencies frictionless business manifests itself as the opportunity to improve compliance and service by connecting directly with ecosystem partners whether they be employers, tax intermediaries, digital platforms like Amazon, Airbnb etc, payroll providers or taxpayer services organisations like banks and software providers.
This trend, therefore, impacts Revenue Agencies in much the same way as the industry generally, requiring a reimagining of interaction with suppliers, agents, businesses, institutions, citizens, other government agencies and international partners.
How microservices enable partnerships and collaboration
A microservice is a compact, specialised service – often performing only one function – that can integrate with other microservices, applications, and wider systems through an API.
Each microservice is self-contained, so they can be replaced, modified or improved quickly and easily, without much, if any, overall disruption. The approach provides application scalability and reliability while acting as an ideal foundation for companies to forge partnerships and seamlessly integrate new services, without the great upheaval, time and costs of traditional upgrade and integration projects.
So there is a positive impact on IT plus the transformative benefit of enabling this new wave of technology-based partnerships. Our Technology Vision 2018 research finds that a quarter (25 percent) of revenue agency respondents report that the number of partners their organisations work with has doubled or more than doubled in the past two years. The U.K.’s HM Revenue & Customs (HMRC) is among the leaders, in terms of evolving their systems to embrace more partnerships and platforms. Since 2013, as part of a full-scale digital transformation, the HMRC has been evolving a cloud-based platform which now hosts “130 customer-facing services, underpinned by 700+ microservices” – demonstrating how this kind of ecosystem can flourish with the right framework and organisational commitment.
Even though adoption rates vary, the Technology Vision research does suggest that most Revenue Agencies understand the importance of a frictionless business approach and are moving in that direction. For instance, 88 percent agree that microservices are critical for scaling and integrating ecosystem partnerships, and 85 percent expect the amount of data exchanged with ecosystem partners to increase within the next two years.
The key to getting this journey right is governance. Revenue Agencies will operate with increased interdependence on the ecosystem and they need ecosystem partners to meet the high standards the agency would have for its internal systems and operations.