India’s Income Tax portal is dysfunctional In financial year 2019/20, the last date for filing, the IT returns was extended many a times, apparently due to Covid19 However it now appears to be only an excuse as the Income Tax website was under development As last date of filing of IT returns draws closer, 30th Sept’21, the millions of users on income tax portal are complaining about huge hurdles in filing returns; due errors, loss of data, inability to log in , Inability to load Sch 112A importing it from Tax paid or even filling offline , sudden loss of data after meticulously filling data on capital gains, Not linked to cleartax portal , etc Coming on backdrop of massive GSTN website failure, finger pointing has already started from the Ministry of Finance, Government of India Making a departure from its conventional norms, Ministry of Finance has started “naming and shaming” the IT company who was awarded the contract, for managed IT services, based on L1 ie lowest bid !
Client confidentiality suits all Usually IT companies do not disclose the names of their clients Vice versa Clients too do not disclose their IT vendors For example, Pegasus , the rogue Israeli IT company that sells spy software, refused to disclose if Indian government was one of their clients, Nor Indian government acknowledge, in spite of pressure from opposition parties, Supreme court, if they purchased Pegasus software for spying on opposition leaders, journalists, Such client confidentiality perfectly suits mutual interests The failures of IT companies can be quietly pushed under carpet As per IT industry veterans, a case study of such work will be still made, keeping client name anonymous, to show off credentials ! Never waste an opportunity !
Pronouncing as guilty , even before trial In this case , Minister of Finance, is shifting the blame, by giving wide publicity to its internal matters viz CEO of this company being “summoned to New Delhi” to fix glitches in portal ; “Deadline has been given to the company” , etc etc Usually such language is exclusively used by Supreme court or ED/CBI where the accused is already pronounced guilty, even before trial started
India’s most respected IT company is pushing back, an aggressive government : Any smaller company would have been completely demoralized , catapulted under such pressure tactics but India’s most respected IT company is pushing back creditably to an overly aggressive government Just as the Ministry of Finance is publicly reading the riot act to the IT company, its legal team may be simultaneously perusing over terms of contract , called as SOW(statement of work) to save them from contingent legal liability As seen from past, India’s most respected IT company can dig its heel and take up long protracted legal fight with almost anyone!
Overreach of social media campaign The social media brigade of the saffron government , has started branding the IT company as “anti-national”
Why India’s most respected IT company should be under cloud of scuttling grand design of Modi government, for making filing of income tax returns faster if not easier ?
Shouldn’t the ministry of Finance be blamed for its utter failure , with no lessons learnt from its GST portal fiasco in 2018?
Setting clear system specifications and time to time checks with vendor , during life cycle of a project Unlike infrastructural projects, like dams, buildings, conceiving IT project is far more complex, precisely due to abstract nature of “project delivery”* The gap between what the client expected and what was delivered, is often huge
(see cartoon above) The client needs to clearly articulate their expectations ,in greatest details, in technical language with milestones of the project with timelines. Ideally, IT vendor needs to work with client team instead of working in a silo This ensures that there are no last minute surprises like in cartoon above Client immaturity is evident from loose specifications Any client that leaves system specifications wide open , to be filled in by the IT vendor, is making a Himalayan blunder
*Delivery in IT jargon means, final product, that is given to customer .
Don’t fix anything that ain’t broken ! In this case, the website for Income Tax was running very well , developed by TCS with turnaround time of 60 days for settlement of claim /refund of money The Ministry of finance, apparently to draw headlines, (Modi government’s ease of doing business !) had vision of compressing turnaround time of one day Very ambitious indeed ! Like how stock exchanges settle T+ 1 for paperless trading So Ministry of Finance, sets out to revamp , and junk a still working, robust Income Tax portal and back end system with Rs 4200 Crores budget (from Tax payers’ contribution)
Populism and headline management of government : As per published reports, the IT contract for re-engieenring Income Tax portal was awarded to one of India’s top IT companies for which Rs 165 Cores was paid out (about $ 23 million) which is but a pittance of this IT company with annual revenues more than US$ 10 billion A prudent decision to keep old website running , in parallel , was never taken This shows how far are the mandarins of North block from practical common sense Alternately , erstwhile IT vendor, could have made small enhancements in existing portal to reduce refund time. But then this would not have got headlines for Ministry of Finance
Operation’s successful but the patient is dead ! : There are hundreds of super specialist skills in healthcare field of surgeries (viz Cardiac, Orthopedic, Oncologist, Gastroenteritis ENT, Micro-invasive(laser), to name a few) One does not expect any particular hospital or one healthcare expert to be know all, have ability to do surgeries for treating every disease Each hospital has reputation for a particular field Going to right hospital and medical expert is most crucial Like in healthcare, IT companies too have specific , niche skills that are technology specific Business domain, if complex , needs domain experts , to be not only fully involved, but leading the project Ministry of Finance who saw all top IT companies as similar entities , made the biggest and costliest mistake Their awarding IT contact , based on lowest price, and turnover of company was a recipe for disaster
In this case, choosing right IT vendor who had prior experience in the business /technology specified, demonstrated ability in successful , timely execution of government projects was crucial Evidence of Successful transition , after beta testing of portal, pilot launch , before big bang commissioning ” , capturing and retaining successful algorithms of existing end to end”, “ground up IT systems” was critical Overlooking this meant the ministry of Finance started on the wrong foot , as it set on its fateful journey of revamping Income Tax portal
Genesis of India’s IT boom : Majority of Indian IT companies successfully rode the outsourcing boom that started following Y2K projects in years prior to 2000 This was followed by dotcoms and internet boom, digitization of enterprises, transition to mobility started in later years, helped Indian IT companies They successfully targeted Fortune 500 companies, and successfully garnered foreign exchange revenues That India is a English speaking nation, definitely helped in communicating with their clients As leading companies, Governments from OECD nations, (USA, EU,UK, etc ) are ahead of the development curve, than companies in South Asia, the majority of contracts that Indian IT companies initially awarded were not for developing end to end IT systems but for ADM(application, Development, Maintenance ) of existing legacy IT systems or IMS (infrastructural Maintenance & Support) , ERP roll outs of SAP/Oracle etc Such projects are typically low risk, high profit margin consulting type of projects with predictable revenue streams
Sky, the limit for low end IT outsourcing work The dollar –Rupee arbitrage works in favour of India’s IT companies (Indian IT companies have bulk of their salary , establishment costs in rupee while revenues in dollar domination) Most IT companies’, top line as well as bottom line (TCS, Infosys, Wipro, HCL, Satyam, etc) grew astronomically , by leaps and bounds , during early 2000 -2007 The top 5 achieved first milestone of “One billion dollar individual revenues” soon Now in 2021, two of the top IT companies have hit US$ 100 billion market capitalization ! All this added aura of greatness around these IT business However performance in stock market has little to do with the ability to deliver ground up IT systems
Its lonely at the top ! The junior. Middle level officers, in top IT companies suddenly found themselves catapulted to senior positions within the company The middle level executives , so vitally important in any company, was always brittle and new inductees were too callow to understand complexity of business and tehcnology challenges Thus majority of a project team has neither deep domain, knowledge of particular industry nor clear understanding of emerging technologies , system architecture , Agile technologies in vogue
Indian IT majors’ best kept secret : Inability to execute end to end, ground up IT projects ? The leading IT companies, (with notable exception of TCS and few other niche players) never had enough collective experience of doing execution of , ground up, “end to end projects” Because such challenging projects are possible , only in India TCS, which developed many of India’s prestigious, marquee IT projects like Stock exchange settlement system, Ports, Passport project, the Indian Railways’ IRCTC site and India Post’s digital project, is considered as an outlier among India’s IT majors can consciously use low margin Indian IT projects to develop its middle management muscle However most of the other top IT companies, quickly got addicted to high margins of foreign exchange revenues They consciously shunned Indian IT projects , during their growth phase, that offer paltry margins In addition, it is widely known that Indian clients have high expectations , do not pay (or never pay ) on time for efforts Indian IT projects come with added high risk of project failure, due lack of clarity by immature customers, while specifying system requirements No one complained about this as the investors, share holders, in these companies, reaped gold mines, saw their investments compounded many times IT companies remuneration is envy of all other industries , among the best in India However majority of the top IT companies avoid challenging work in India, due low operating margins
SimpliFly , is autobiography of Capt Gopinath, founder of India’s first LCC Capt Gopinath, rues that he gave IT contract of airlines’ internet based CRS(Central Reservation System) to one Indian IT company , driven by a naive belief on capability of Indian IT companies (m/s IGT ) Airline’s CRS is business critical IT application that enable bookings on airline Capt Gopinath lists this as one of main reasons why Air Deccan was acquired Vijay Mallya’s Kingfisher A leading management consultant , had derisively called Indian IT companies as , techno-coolies, for doing low end , repetitive , technology work for their rich clients from rich countries Such project failures in Indian IT companies, are usually pushed under carpet , into oblivion , than discussed openly to avoid its recurrence Such complete failures, in end to end systems, are not uncommon despite IT company’s winning best awards in quality like CMMI-Level V, ISO 9000, etc
Blame game has already started : From published reports, a ongoing, stable mission critical Income Tax IT portal , designed by TCS was junked in favour of new IT portal , with all new back end systems And this too , was to be designed by a completely new vendor , whose only claim was that they had offered L1, a lower price bid By how much % margin was their lower, is not in public domain
Clearly it was imprudent decision on part of Ministry of Finance , to junk a working portal and to seek completely new vendor for a business critical application like Tax portal This portal processes refunds of income tax With one sweep, all wisdom, knowledge, that were captured in old portal was lost With change of vendor, all the decade old, millions of man hours of system knowledge, complex domain of Income Tax rules, linkages built with other websites, SI with many internal modules, on foundation of their stable and sound system experience was swept away Just to grab headlines that new Income Tax portal crunches processing time for refund from 60 days to 1 day If contract could not be awarded to same vendor, then Shouldn’t the ministry of finance be upholding this domain knowledge, for transitioning to next IT vendor, thru government IT companies like C-DAC ?
The particular IT company , who bid for fixed price bid, has clearly underestimated effort required, (or mismanaged project or both ) is under fire from Ministry of Finance to deliver It will respond in a typical way; By throwing more people on the problematic project ! Only time will tell if this will prove successful
(9 x 1) is not same as (1 x 9) Here’s why That 9 x 1 = 1 x 9 , we know true, but only mathematically However practically, nine women hired simultaneously, to work 24 x 7 for one month,can never produce a human baby, delivered by one women sitting patiently in nine months ! Even dead brick and mortar construction projects , without adequate curing , setting time for cement, come crashing down soon after The government of India risks with another egg on its face , after GSTN portal issues
If present operator of Mumbai airport (like Adani/GVK )has first right of refusal in building new airport near 150 KM, at Panvel, Navi Mumbai, then why such common sense not used while revamping IT system for Tax portal? Is Tax payers money being spent unwisely ? Can CAG investigate on this before blaming the IT vendor ?
The entire onus of project failure , glitches , in Income Tax portal rests squarely with Ministry of Finance, for handling its most business critical IT application in such a casual manner
The success of any IT project rests in
- Setting clear system specifications for re-engieering
- Retaining internal SMEs, developers who worked with IT vendor of earlier website .
- Ensure knowledge transfer to new vendor thru internal mechanism
- Keeping old website running and give users a choice to migrate to new website as it slowly evolves, fixing bugs
- Choosing the right IT vendor who has previous experience in the technology specified, demonstrated in successful delivery of , end to end, ground up IT systems Ideally one who has already worked on old website , should get first right of refusal, for enhancements
- Time to time checks on milestones than be surprised at last stage
- Ambitious , headline grabbing agenda does not work in any filed , especially in IT portals
- Beta testing of new IT portal by domain experts like Chartered Accountants, by industry associations like ASSOCHEM, CII, etc, to remove bugs before Go Live
- Gradual roll out of pilot to few users against “Big bang , Go Live nationwide” approach
- Full involvement, hand holding , domain support of representatives from Ministry of Finance , during entire project roll out
- Readiness to accept total accountability for failure/success of project rather than passing the buck to vendor
Last Word about the naked emperor In the story, haughty, pretentious , egoistic emperor hired a designer who promised to use most intricately woven silken fabric (using tax payers money !) After huge wasteful expenditure, it needed a child’s innocence to call the bluff on naked emperor As the emperor was actually walking naked in a busy market street , vested interests refused to see naked truth The bureaucrats and ministers sitting in cosy Raisina Hill offices in New Delhi’s power corridor, and IT vendors are not very different Its the common folks of India, Income Tax payers, CAs who are real users of the portal, who have to call the bluff CAG may well go into how tax payers money, (over Rs 4000 crores) is being wasted on such grandiose projects with questionable benefit
Fact Check of Income Tax portals from published reports as below
Infosys was awarded the fixed price contract, reportedly worth Rs 165 Crs in 2019, by Ministry of Finance , to develop the new I-T portal, replacing the old one, in a bid to reduce the processing time from 63 days to one day |
New I-T e-filing portal runs into glitches right from the time it was launched on June 7, 2021. |
Infosys CEO summoned by the Finance Ministry on June 22. The company assured that it has augmented the team to address the glitches and the team is working to resolve them. |
Two months later, on August 23 the team met the Finance Minister again and was given the ultimatum of September 15 to resolve the issues.The company assured that it is working on this expeditiously and has as many as 750 people working on the project with COO is overseeing it |
No grievance mechanism or help desk Many functionalities simply not working , let alone crashing refund time |
We sincerely hope Income Tax portal of India , starts working, with all backend systems working from 15th Sept 2021. A lot is at stake for 3.1 millions of India’s Income tax payers, who make 12% of government revenue .