SMARTER DATA
Software Developers Client Experience
Performance and Direction
December 2016
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How does this document help the Client Experience
Owner?
Document Overview
ATO Reinvention Program Blueprint 2015
This Software Developers Client Experience – Performance and
Direction document provides the Software Developers Client
Experience Owner with an overview of how the external environment
may impact the desired client experience and our current position to
react.
It will identify potential threats and opportunities to the Software
Developers Reinvention program of work and support agility in
decision-making relating to current and future strategy considerations
regarding the Software Developers Client Experience.
Software Developer Client Experience
The Reinvention Blueprint is underpinned by three risk indicators:
 Transparency
 Complexity
 Behaviour & Choices.
These three indicators are considered throughout this document as a
means to unite the intelligence, risk and strategy considerations that
will support the Software Developers Client Experience.
This report will be produced twice per year (February and July) to
support the annual planning process for future strategy and
investment decisions for the Software Developers Client Experience.
It will consider:
 Impacts of the economic environment on Software Developers
 Software Developers performance indicators
 Changes in Software Developers expectations
 Whether Software Developers expectations are being met by the
current work program
 The Software Developers risk landscape and investment picture
and the impact on the Software Developers Client experience.
Performance & Direction Analysis
Contents
Executive Summary
3
Software Developers: Economic Environment
4
Software Developers: A Complex Relationship
8
Software Developers: Emerging Trends
9
Software Developers: The ATO’s Program of Work
10
Software Developers: Building an Effective Partnership
12
Software Developers: Communication and Engagement
15
Software Developers: Performance Measures
18
Software Developers: Client Perceptions
20
Software Developers: Risk Landscape
22
Software Developers: Current Investment Picture
24
References
25
ATO’s Annual Planning Process for future
reinventing Change
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Executive Summary
Key Observations
Many of the ATO priorities over the coming years focus on
transforming our digital and online services to provide a
better service for taxpayers. The ATO can only implement
the Reinvention strategy, deliver on its commitments to
Government, work with other entities and implement new
measures by developing a strong partnership with
intermediaries like software developers. However, despite
recent efforts to improve the partnership, the ATO is still
struggling to build trust with software developers.
Compared to other taxpayers and partners, the ATO does
not have as detailed and reliable information about the
software developer intermediary population, which impacts
our effective engagement. This is because:

Software developers are a diverse group.

Not all developers interact with the ATO directly.

There is not a comprehensive register of software
organisations or products, or a fully operational
industry representative body.
The Software Developer Work Program and Key
Engagements provides an overview of the impact of ATO
programs so software developers can plan their workflow.
By providing developers with this information, the work
program should contribute to better quality products for
taxpayers and practitioners and reduce the risk of project
failure. Research is required to confirm if the work program
is effective at meeting this outcomes.
Inadequacies and inconsistencies with the ATO’s technical
specifications and software testing environments are an
ongoing concern for developers. The ATO has
acknowledged it needs to improve the quality and
consistency of these services and is currently developing
technical guidelines for specifications.
Communication between software developers and the ATO
is an area of concern. Developers rely on accurate and
timely information from the ATO to provide commercially
viable products for their clients, something they do not
always receive. Software developers have stated that they
have found communication with the ATO confusing,
inconsistent, irrelevant and repetitious. Software
developers are also critical of the ATO’s consultation
processes for being protracted, not meaningful or timely.
A number of projects already underway in the ATO (e.g.
Single Entry Point, Partner Relationship Model) aim to
improve communication and engagement with developers,
however the benefits may not be seen for some time.
Because the projects are being delivered by different areas
of the ATO, there is also a risk that they could exacerbate
some of the issues if they are not coordinated.
The ATO does not have comprehensive performance
metrics or targets for the software developer client.
experience. As a consequence, it is not possible to assess
the effectiveness of service provision and engagement.
The ATO’s current systems and governance framework do
not identify enterprise level risks pertaining to the software
developer client experience. Cyber and data security, the
inadequate testing of software and the effectiveness of
working relationship with software developers pose
significant risks to the ATO, and to the desired software
developer client experience.
It is not possible to accurately establish the ATO’s current
investment in the software developer client experience
because several business lines interact with and deliver
services to developers and the ATO finance and governance
systems do not provide investment by client experience.
Key Opportunities
To enable more effective and evidence based decision
making, the ATO should continue the Strategic Costing
Model, Risk Review and also consider other options to
develop better ways to identify, monitor and align
investment and risks for the software developer client
experience.
Cyber security poses a significant risk to the ATO and the
software developer client experience and should be
considered as an ongoing organisational-wide risk.
To improve the understanding of the software developer
population, the ATO could consider:
•
Undertaking specific research to better understand
relevant software developers that are not directly
engaged with the ATO, like developers of professional
products that interact through other developers APIs.
•
Strategies to increase the type and number of software
developers responding to ATO surveys.
The ATO could consider improvements to the work
program by: expanding the information included; regularly
updating the program; and researching the extent to which
it meets the needs of software developers with regard to
timing, content, consultation and communication channels.
All projects should have live test environments that are
accurate, timely, accessible and easy to use. Improvements
should be made to existing testing services for projects like
the Practitioner Lodgment Service (PLS), to ensure the
services meet the expectations of different developers.
Until key projects like the Single Entry Point are
implemented, the ATO should engage with software
developers to identify if there are any interim solutions that
might immediately address some of the pain points in the
relationship. For example, establishing and measuring
common service standards for all helpdesks would increase
the ATO’s understanding of service levels and assist to
provide a more consistent client experience for developers.
The ATO should develop a set of performance measures
and targets to assess the success of programs against the
outcomes identified for the desired client experience.
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Software Developers: Economic Environment
Key Points
 The broader software developer population is largely unknown. At June 2016, there were 160 software products
registered with the ATO, from around 110 companies. While these products cover the majority of transactions
with the ATO, there are likely to be software products performing tax relevant functions that are not on the
register. With a greater understanding of the software developer population and products, the ATO could better
assist software developers to design contemporary digital solutions for taxpayers.
 Software developers that engage with the ATO are a diverse group, with businesses of different sizes and service
offerings, ranging from those offering tax preparation products to enterprise systems with payroll and
superannuation support. This diversity drives complexities in the ATO’s engagement with software developers.
Population
The software developer client group consists of
intermediaries who design, build and implement solutions
for the tax and superannuation systems. These products
are used by other intermediaries, businesses and
individuals. The population is difficult to define due to the
diversity of products and complexity of underlying
transactions.
It is estimated that there were 1,500 software publishing
businesses in Australia in 2015-16, generating over $2.3
billion in revenue and employing close to 8,000 workers.
The market segments most relevant to the ATO,
accounting software and enterprise software developers,
are estimated to account for over 54% of the market
revenue, or $1.2 billion in 2015-16* (IBISWorld, Software
publishing industry in Australia, 2016).
Software products relevant to the ATO can be divided into
two broad categories, with distinct customer profiles and
development requirements:
 Enterprise products: software packages designed to
provide record keeping and ongoing support to a range
of basic business management functions, including:
•
Payroll
•
Superannuation
•
Finance
•
Business Accounting
•
Tax preparation
 Professional products: software packages focusing on
tax-time lodgments, designed for tax agents and other
professionals. Functionalities include pre-fill, batch
lodgment and services to manage multiple clients.
As of June 2016, the ATO’s register of business products
lists over 160 products, of which the vast majority are
finished products. Currently, over 50% of the products
have business accounting and payroll support, 30% have
superannuation related functionalities, 20% provide
finance support and 9% have tax preparation options**
(Electronic Lodgment Services (ELS) based professional
solutions).
The number of products on the register has increased by
around 20% since October 2015 (ATO, Software Developer
Demographics, 2015).
A wide range of software functions have implications for
taxpayer interactions with the ATO, however not all
require direct engagement with the ATO. A number of
large software developers also act as intermediaries to
facilitate transactions between smaller parties and the
ATO, reducing overall transparency of the sector. The
following analysis will focus on software developers that
have a direct relationship with the ATO.
According to the ATO’s latest figures, there are close to
2,400 private companies (unique email addresses and
company names) registered on the software developer
homepage to receive ATO updates and newsletters, of
which 352 companies are also enrolled to access restricted
information required for ELS developments (ATO, Software
developer homepage statistics, 2016). This shows that
there are a significant number of interested parties, but
active software developers remain a small proportion of
the population.
Not all software developers offer commercial products. A
substantial proportion of the software developer
population is likely to work within a larger organisation,
performing in-house development or customisation
functions. Deloitte estimated that, in 2015, over half of
Information and Communications Technology (ICT)
workers were working outside technology sectors. Public
administration, financial and professional services are the
leading sectors estimated to have substantial ICT
employment, suggesting potential in-house development
activities in these sectors (Deloitte, Australia’s Digital
Pulse, 2016).
In 2014-15, electronic transactions were utilised for over
20 types of lodgments for taxpayers, the majority of which
were Individual tax returns (62.5%), Business Activity
Statements (BAS) (14.1%), and Company tax returns (5.5%)
(Figure 1). There is likely to be a significant increase in the
volume and shifts in the composition of lodgments due to
the growing requirements for businesses to lodge
electronically, for example the development of Single
Touch Payroll and the rollout of SuperStream - both of
which are real time reporting obligations.
*data also include non-tax related software development such as general business management software
**numbers do not add to 100 as some products perform multiple functions
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Software Developers: Economic Environment
Figure 1: ELS lodgment types by volume, 2015
Source: ATO – Cognos TPALS_Sandpit_1, June 2015. ELS only.
Figure 2 demonstrates the increasingly important impact
of software products in the tax lodgment process over the
last decade. In 2014-15, more than 34 million lodgments
were made with the ATO electronically, or 78% of total
lodgments. Comparatively in 2005-06, there were only
23 million electronic transactions, or 59% of total
lodgments.
In 2013-14, income tax returns, Australian business
number applications had the highest proportion of
electronic lodgments (above 90% of total lodgments), with
tax file number declaration forms and payment summaries
still favouring paper (under 40% of total lodgments were
electronic) (ATO, Electronic vs. Paper Lodgments, 2015).
Government revenue bodies that can facilitate tax e-filing
capabilities and ensure adequate take-up are the
cornerstones of future tax-related software developments.
The OECD estimated that over 93% of all individual tax
returns and 88% of corporate tax returns in Australia in
2013-14 were through e-filing channels (by both
individuals and tax agents), higher than OECD average of
72% and 81% respectively (OECD, The use of online
services in Tax administration, 2015).
Figure 2: Number of lodgments, 2005-06 to 2013-14
Source: ATO, Electronic vs. Paper Lodgments, 2015
Economic contribution
Despite rapid growth over the past five years, the software
industry in Australia remains relatively small compared to
other parts of the Australian economy. Industry value
added was estimated at around $890 million in 2015-16
(or 0.05% of GDP) and will grow by an average of 9% p.a. to
over $1.1 billion by 2020 (IBISWorld, Software publishing
industry in Australia, 2015).
Despite its relatively small size, the software industry is
likely to have significant flow-on effects to the rest of the
economy. For example, it was estimated that the software
industry accounted for over 15% of labour productivity
growth in the U.S. from 2004 to 2012 (SIIA, The U.S.
Software Industry: An Engine for Economic Growth and
Employment, 2014). Software solutions are generally
considered as an enabling technology that has been
adopted by every industry to help streamline business
process and improve overall efficiency of operations.
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Software Developers: Economic Environment
Key Points
 The software industry is relatively small compared to other sectors in the Australian economy; however being an
enabling technology means it generates significant flow-on economic effects to other industries.
 The cloud take-up rate in Australian businesses is higher than comparable economies. Software developers are
rapidly shifting to cloud subscription business models, primarily targeting digital savvy small to medium Australian
businesses. The ATO is already working with software developers to develop secure, streamlined solutions for the
growing number of taxpayers using cloud software products.
Business model shifts
Market characteristics
In the past, tax-related software solutions were largely
desktop based, with users paying significant upfront
investment to acquire the software and smaller amounts for
maintenance over time. More recently, driven by the demand
for low cost and more agile software products, the industry
has allocated significant investments to develop cloud-based
solutions. Cloud platforms are standardised services that are
managed and maintained by a third party, delivered to users
over a network connected and paid for based on usage. For
businesses, cloud based software solutions can offer
substantial reductions in IT related cost burdens, including
data storage and maintenance of equipment. In addition,
cloud platforms that support multiple devices could also
provide substantial mobility and flexibility to business owners.
As of 2015, it is estimated that 46% of tax-related software
products were delivered through cloud platforms (Figure 3).
The rapid digitisation of small and medium enterprises
(SMEs) in Australia and proliferation of cloud technologies
have been the largest contributors to enterprise software
demand growth in recent years (IBISWorld, Software
publishing industry in Australia, 2015). As of June 2015,
there were over 2.1 million SMEs in Australia (ABS, Cat.
8165 Businesses by Main State by Industry by Employment
Size Ranges, 2016). The Australian Communications and
Media Authority (ACMA) estimated that in 2013, 44% of
SMEs, or approximately 900,000 businesses, were using
one or more cloud computing services, representing a
substantial potential market for enterprise solution
providers (ACMA, Cloud computing report, 2015).
Figure 3: Tax-related software platform breakdown by number of
software products, 2014-15
Source: ATO, Software developer demographics, 2015
Large developers, like MYOB and Xero, have started sharing
Application Programming Interfaces (APIs) for their products,
allowing other developers to build on their products and
create unique add-ons for clients. APIs are programming
instructions and standards for building software applications
which enable third parties easy access to their capabilities.
Wider access to professional software products via APIs has
the potential to expand networks between developers and,
for developers who charge for access to their APIs, provides
another source of revenue. Importantly, they also allow small
businesses with access to productivity-enhancing technology
that was previously only available to those who could afford
to pay a premium fee.
Software providers play an important role in encouraging
SMEs management and economic growth. For example, a
Deloitte Access Economics report (commissioned by
SalesForce) estimates that every additional 1% SMEs spend
on online services leads to a 2.9% increase in annual
revenue growth (Deloitte Access Economics, SMBs in the
digital race for the customer, 2016).
The Australian SME sector is also an attractive market for
international software developers. Comparison of the
cloud technology take-up rate shows that Australian SMEs
are well ahead of those in comparable economies, with
only around 37% of SMEs in the U.S. (Forbes, Roundup of
small medium business cloud computing forecasts, 2015)
and 24% of SMEs in the U.K. using cloud technologies
(Europa, Use of cloud computing services, 2014). The takeup of cloud technology by businesses in the Euro zone is
around 19%, with Finland leading the pack at over 50%
(Europa, Use of cloud computing services, 2014).
Software expenditure by SMEs is largely subject to
business type, fluctuations in the business cycle, and the
accessibility of domestic technology. In particular, SMEs
are susceptible to cyclical fluctuations in domestic demand
and, as a consequence, experience greater swings in
revenue than larger businesses and a higher business
failure rate (RBA, The economic trends, challenges and
behaviour of small businesses in Australia, 2015). For
example, the Australian Bureau of Statistics (ABS)
estimated that over half (54%) of ‘micro’ businesses
established in 2011-12 failed in the first three years of
operation - 42% and 35% of small and medium businesses,
respectively (Figure 4).
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Software Developers: Economic Environment
Key Points
 Software developers face substantial churn in their customer base which creates additional pressure to replace
customers to stay profitable. It is important that the ATO understands the commercial environment so that it can
tailor interactions to meet the changing needs of software developers.
 The growth of professional software products has resulted in productivity increases for tax practitioners by
streamlining and automating transactions and created opportunities to offer a wider range of services to business
and individuals. Tax practitioners are likely to remain the dominant providers of tax preparation services into the
future, however software products are increasingly being used to lodge standardised reporting obligations.
Figure 4: Australian SME survival curves, 2011-12 entries
Source: ABS CAT. 8165.0, Feb 2016
Note that ABS classification of SMEs is different to that of ATO. In this case, ABS classified micro businesses to be those that have less than 5 full-time
equivalent employees.
While business exits may reflect the sale or merger of an
entity or the retirement of an owner, many are the
consequence of business failure. These failures are likely to
translate to a substantial rate of customer churn for taxrelated software developers, and place significant pressure
on the industry to replace outgoing customers. Business
Insider estimated that leading SME providers in the
industry, MYOB and Xero, experienced on average 13% to
17% annual customer churn for their cloud services
(Business Insider, The cloud accounting supremacy war in
Australia, 2015). Professional services firms face similar
churn, with the ABS estimating that the annual turnover of
accounting businesses was around 10% in 2015 (ABS,
Counts of Australian businesses, 2016).
Changing industry dynamics
The relationship between software products and Tax and
BAS agents is complex. The development of professional
software products has allowed agents to reduce the cost of
doing business through automation and streamlining
transactions, reclaiming low margin work such as
bookkeeping. This has enabled agents to provide a wider
range of services, to deliver a more comprehensive client
experience and to continue to drive growth in the sector.
In addition, the complexity of Australia’s tax legislation,
ongoing policy changes and a range of behavioural factors
continue to drive lodgment of complex tax obligations
through agents. The number of active Tax and BAS agents
has steadily increased in the last few years, and in 2016
there are over 34,000 active Tax and BAS agents in
Australia (ATO, Tax Practitioner Landscape Report, 2016).
Tax practitioners service over 70% of individual and 90% of
company tax returns (ATO, Compliance in focus, 2013).
However, the proliferation of enterprise software products
among SMEs, particularly those with payroll and
superannuation functionalities, and the increasing
awareness of self-help technologies are likely to encourage
self-lodgment among SMEs. The ability to self-lodge could
shift the relationship between taxpayers and tax
practitioners over time, with business seeking more
complex and holistic services, rather than standardised
reporting obligations.
In 2014-15, just 45% of instalment notices for PAYG and
GST lodgments were undertaken by agents, compared
with 41% in 2012-13 (ATO, Tax Practitioner Landscape
Report, 2016). This data suggests that the impact of
software products on tax agent use is unclear at present.
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Software Developers: A Complex Relationship
Software developers partner with the ATO to play a significant role in designing, building and implementing third
party solutions for the tax and superannuation systems that can be adopted by other intermediaries, businesses and
individuals. Compared to traditional intermediaries like tax practitioners, the ATO’s relationship with software
developers is relatively underdeveloped. However with the rapid pace of digital transformation, software developers
have become an essential component in the delivery of ATO services.
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Software Developers: Emerging Trends
Key Points
 The ATO is aware of important emerging software industry trends and technologies, such as Blockchain, APIs,
DevOps and mobile technology. Staying up to date with software industry trends is important for the ATO to meet
and anticipate the needs of customers and partners.
 Whole of government initiatives, such as the Digital Transformation Office’s Digital Service Standard, should
improve the quality of Government services but will result in new digital compliance obligations for the ATO.
Emerging Trends
The Australian software industry is a leader in adopting
technological trends. This results in a dynamic industry.
The ATO’s partnership with the segment is benefitting
from the ATO being aware of, and responsive to, ongoing
change. The ATO is monitoring emerging trends influencing
software developer behaviour (ATO, Australian and global
software developments trends, 2016). These trends
include:
 Consumer demand for more flexible and scalable
solutions is driving an increase in subscription based
software distribution methods. Regular fees for
software provision result in less volatility in income
streams for software developers and tax receipts for
the ATO (ATO, Australian and global software
developments trends, 2016; ATO, Corporate Horizon
Scan -2015).
 DevOps - is a type of continuous and rapid IT service
delivery (similar to Agile) which focuses on
collaboration between different parts of software
development. The ATO may be able to align existing
Scaled Agile Framework (SAFe) practices with a DevOps
approach and in doing so, permit better and more
responsive digital collaboration, communication and
co-design between the ATO and software developers.
 One of the most anticipated trends in the fintech
sector, blockchain is the technology underpinning the
crypto-currency, bitcoin. While there still is uncertainty
about the potential for blockchain, it is sited as
potentially enabling many new technologies because it
can generate trust without a central authority (KPMG,
Tax 2025, 2016). For example, financial institutions are
investigating the viability of blockchain to verify
transactions on a network instantaneously, as an
alternative to the current process centred on clearing
houses. This method of automatic approval of financial
transactions would improve efficiency and reduce cost.
Blockchain is not just limited to financial services and It
may well be taken up by government and other
industries first (Gartner Hype Cycles 2016). While uses
beyond crypto-currencies have not been developed, it
is widely speculated that they will be in the future. The
ATO is aware of, and is preparing for, change as this
technology reaches maturity.
 Offshore software development continues to increase
globally, mainly due to the cost benefits. Language and
cultural barriers, data security, time-zone and testing
difficulties impact on the success of offshore
development. The ATO could benefit from exploring
the possibilities and challenges of engaging with
offshore software developers.
 With the changing digital environment, the cybercrime
threat has rapidly increased and will continue to evolve.
The ATO must balance community expectations for
contemporary digital services with controls to protect
the integrity of the tax and superannuation system (see
page 22 for further information). Specifically:
• The increase in cloud computing makes it more
difficult to investigate suspected fraud. The ATO
will need to negotiate access to these services for
investigators.
• The high and increasing use of mobile devices in
Australia is a consideration in the design of digital
services (KPMG, Tax 2025, 2016). The ATO is
already using voice authentication for some
services, and should continue to explore how
other biometric authentication can be used in
mobile applications to increase security and
convenience.
 Future partnerships between government departments
and third parties may result in greater outsourcing of
service provision. While partners such as tax
professionals and banks are regulated, new governance
processes may be necessary for other partners like
software developers.
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Software Developers: Current & Future Experience
The ATO’s Program of Work
Key Points
 The ATO publication of a program of work aims to enable software developers to plan their workflow, resulting in
better quality software products for taxpayers and tax practitioners and reducing the risk of project failure.
 Future research and development of the program of work could result in enhancements that would produce
better outcomes for software developers.
The ATO participates in an extensive program of IT
projects; both ATO specific and whole of government
projects. The program is determined on the basis of a
hierarchy where legislative changes take precedence. ATO
initiated projects are endorsed according to criticality, risk
and strategic value. Currently, 73% of projects in the
Software Industry Work Program and Key Engagements
(hereafter, work program) involve legislative change.
Successful delivery of project in the work program relies on
substantial input from software developers. The volume of
legislative change imposes significant demands on
software developers, severely restricting their capacity to
participate in other projects. Some software developers
have indicated that capacity constraints limit them to
implementing mandatory changes only (ATO, Client
Communication Preferencing Research Findings, 2016).
The ATO’s Software Industry Partnership Office (SIPO) will
manage all interaction with software developers through
the Operational Framework (ATO, Operational Framework
for Developers and Service Providers, 2016). The
framework incorporates registration, product certification
and monitoring capability and will ensure data security.
The ATO’s engagement with software developers will be
operationalised through the Partnership Framework (ATO,
Software Industry Partnership Framework, 2015) that
focusses on early engagement and ongoing
communication, collaboration and co-design with software
developers. The Partnership Framework seeks to address
industry criticisms that the ATO has historically approached
developers with proposed solutions rather than engaging
to jointly address problems.
The work program published by SIPO indicates the
extensive program of work that various segments of
software developers will be involved in until the end of
2017 (Figure 5).
Figure 5: Work Program by software segment, 2016 - 2017
Source: ATO, Software Industry Work Program and
Engagements, 2016
Note 1: The key is on page 26.
 To what extent software developers are aware of and
use the work program.
 If the work program is communicated through software
developers’ preferred communication channels.
 Whether the work program provides sufficient
information for software developers to gauge the
impact on their workload so that they can integrate it
into their forward planning.
The ATO should continue to publish the work program
covering a period of one to two years. Publication should
be on a rolling basis, perhaps updated every three to six
months, to ensure that software developers have advance
notice of all projects that may impact on their workload.
The work program could integrate more detailed
information on the intensity of work involved for
engagements and milestones. One possibility is that the
work program could be produced in a dynamic format that
utilises interactive or hover features to provide additional
information for each event.
Despite the high level of transparency delivered by the
development and distribution of the work program, there
is a possibility that it may omit projects that are being
developed by various business lines. Further work could be
undertaken to ensure that the work program is meeting
the needs of software developers. Research could be
conducted on the effectiveness of the publication and the
development processes, including:
The diversity of the software developer population means
that not all developers are in a position to take full
advantage (e.g. those with short time horizons). The
benefits accruing from transparency around the program
of work include:
 Consultation with software developers in the
development of the work program where possible. For
example, while legislated projects involve rigid
timetables, there may be some scope for flexibility with
regard to ATO initiated projects.
 Reducing the adverse impacts associated with risk of
project failure: the inability of clients to meet taxation
and superannuation obligations; and damage to the
reputations of both software developers and the
10ATO.
 Assisting software developers to develop appropriate
software for their clients, plan their workflow and
prepare their business for the future.
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Software Developers: Current & Future Experience
Building an Effective Partnership
Key Points
 The ATO is using the Software Industry Partnership Framework to guide the significant work aimed at resetting the
software developer partnership. The Framework addresses some of the common pain points identified by the
industry, such as ineffective consultation and insufficient project timeframes, by endorsing principles such as early
engagement, co-design and consistency.
 While the ATO generally works in partnership with software developers to design services for taxpayers, some of
the ATO’s own products compete with commercial software products, causing tension in the partnership. By
starting to make information available via APIs, the ATO is taking steps to create a level playing field and allow
developers to innovate and create new and different products for taxpayers.
Reinvention redefined the ideal relationship between the
ATO and software developers as a partnership. Historically,
the relationship has largely been an informative one-way
relationship; the ATO develops and implements projects
and tells the industry what changes are required to their
products. Software developers criticise the ATO for not
understanding or considering their or their clients’ needs,
or what they can contribute to the tax and superannuation
systems (ATO, Client Communication Preferencing
Research Findings, 2016).
This relationship has resulted in reduced stakeholder
support and trust in the ATO, and has impacted negatively
on the ATO’s reputation with software developers (Fjord,
ATO Partner Space Project Overview, 2016). The example
below about the SBR highlights why low levels of trust and
confidence within the industry are a concern for the ATO.
There is already substantial work occurring in the ATO to
build a trusted partnership with software developers.
 In early 2015, SIPO was redesigned in partnership with
the industry. SIPO is the single authority in the ATO on
the end-to-end partnership with the software industry.
 The ATO is providing resources to ABSIA to give the
industry a collective voice for their views to be heard by
government.
 The ATO co-designed a Software Industry Partnership
Framework with software developers. The Framework
endorses principles desired by the industry, such as
early engagement, co-design and consistency (ATO,
Software Industry Partnership Framework, 2015).
 Research into emerging software trends to gain a
better understanding of the industry.
 Progressing solutions to priority communication issues,
such as a Single Entry Point, in partnership with the
industry (see page 16-17).
Case example: SBR and the transition to the
Practitioner Lodgment Service (PLS)
Issues in the SBR rollout for PLS have resulted in late
changes and transition arrangements (ATO, Extended
transition period for the SBR-enabled PLS, 2015). If
developers do not have confidence in the ATO’s ability
to implement the project or understand the benefits,
there will be slower take up. The low number of
lodgments via the PLS in 2016 demonstrates the high
likelihood of slow adoption of SBR (ATO, PLS Fortnightly
Status Update 16 April, 2016). Comparatively, if SBR is
fit for purpose, reliable and well managed, it will
improve stakeholder trust in the ATO and should have
positive consequences for taxpayer compliance. The
ATO is engaging with software developers on a number
of different fronts to quickly identify and resolve their
issues with the PLS ahead of the March 2017 deadline:
 Regular meetings between Senior Executives from
the ATO and key software developer organisations.
 Operational level engagement between the
On-Boarding team and developers. Operational
reports are used to inform strategic discussions.
 Fortnightly PLS and ABSIA Roundtables led by SIPO.
 Making SBR digital services available and developing a
strategy for the future release of all digital services,
such as APIs (ATO, Operational Framework for
Developers and Service Providers, 2016).
Many of these initiatives have recently been implemented
or are in the early stages of development. To enable
informed decision making about future investment, these
initiatives need to be monitored and assessed to
understand what impact they have on the ATO’s
relationship with software developers. A concern is that it
is not always easy to understand the desired outcomes or
performance measures of the initiatives, or map the
outcomes to strategic objectives, making it difficult to
establish effectiveness. For example, the Software Industry
Partnership Framework promises software developers that
the ATO is working towards an engagement approach
where decisions are delegated to stakeholders and
stakeholders play a role in governance. However there is
no information about how or when this will be achieved, or
how it will be measured (ATO, Software Industry
Partnership Framework, 2015).
 The Future of the Tax Profession Forums which
includes software developers and tax
professionals.
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Software Developers: Current & Future Experience
Building an Effective Partnership
The Working with our Partners strategic program is
co-designing a Partner Relationship Model and Pilot for tax
practitioners in 2016-17, with the aim to roll it out to other
partners like software developers if it is successful (ATO,
Partner Relationship Model and Pilots Project Plan, 2016).
The ATO could consider how to include developers in the
early pilots so that they are early beneficiaries of the
program. By including software developers in the initial
pilots, it would demonstrate to the software industry the
high value that the ATO places on the relationship.
Engagement timeframes and co-design
Software developers have identified improving the
timeliness and quality of the ATO’s consultation as a
priority (ATO, Future Client Experience Workshop, 2015).
This is because software developers rely on the ATO to
provide accurate information in line with their
development lifecycle (often 6 to 12 months) so they can
produce commercially viable products for their own
clients. While not always within the ATO’s control, last
minute government initiatives or project changes, rapid
project rollouts and excessive consultation make it difficult
for software developers to incorporate changes into their
work schedules.
The ATO has regularly consulted with software developers
in the past, but consultation has often been informative
rather than exploratory or interactive, meaning project
solutions and design decisions have already been made. To
be real partners and properly co-design solutions, software
developers need to feel that the ATO’s consultation is
meaningful and to believe that their participation can
influence the project outcomes.
The ATO is trying to address these issues by committing to
early engagement and co-design, as evident in the
Software Industry Partnership Framework. While the
framework is new, improvements can already be seen. For
example, the ATO is co-designing the Single Entry Point
with developers and has recently completed a 12-week
engagement and scoping study involving a range of
activities with industry representatives. Software
developers that were not able to participate could monitor
the engagement online and provide feedback.
Excessive consultation is also an issue for software
developers. Not all software developers have the capacity
to engage in long term planning with government,
especially during times of peak demand, such as in the lead
up to tax time (Fjord, ATO Partner Space Software
Developer Summary, 2016). To address this problem, all
engagements with software developers are now
co-ordinated by SIPO. However, excessive consultation
during times of peak demand is still a concern and further
improvements are needed.
Testing services and project
specifications
Testing services provided by the ATO have quality and
adequacy issues. Poor quality specifications and testing
services can have serious cost, time and reputation
implications for software developers. For example, if a
Tier 1 developer deploys an inaccurate change to its live
environment because of poor quality ATO specifications,
this error will impact every business using the solution
until it is repaired. Given these serious consequences, it is
not surprising that testing and specification issues place
additional strain on the relationship between software
developers and the ATO.
Recent projects like the PLS transition demonstrate that
some testing environments regularly have errors, and are
not always a replica of the production environment (ATO,
System maintenance, outages and issues, 2016; ATO,
ABSIA-ATO PLS transition roundtable teleconference,
2016). Around one-third of respondents to a 2016 survey
indicated the ATO’s software specifications are not
sufficient, suggesting that there is room for improvement
(ATO, Software Developers Client Experience Survey,
2016). Suggestions to improve testing are discussed in the
Risk Landscape on page 22.
Wholesale first approach
Balancing the provision of direct and third party digital
services continues to challenge the relationship between
software developers and the ATO. By developing retail
products (direct to user), such as the myDeductions tool,
the ATO is competing directly with wholesale products
traditionally offered by developers and tax agents.
Software developers want access to ATO digital
information available through retail channels, and to be
able to choose what to use. The ATO has started to make
APIs available for new products (e.g. SBR) and should
continue to do this for all products where there is a
demand. By providing partners with the tools to develop
services and solve problems, we are creating a level
playing field and facilitating industry innovation. Ideally in
the future, the ATO will move to an enabler role rather
than directly providing services to the end user (ATO,
Corporate Horizon Scan – 2015).
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Software Developers: Current & Future Experience
Building an Effective Partnership
Software Developers and other
partners
As already identified, the ATO’s interactions with software
developers and tax professionals have not always been
timely and the messages have been inconsistent. This
resulted in a poor client experience and project outcomes.
To resolve these issues and to deliver on the Reinvention
program Working with our Partners in the Tax and Super
System, the ATO has developed a number of initiatives.
The Future of the Tax Profession Working Group brings
together tax professionals, professional associations,
software developers, the Tax Practitioners Board and the
ATO. It has been meeting since 2014 with the purpose of
driving collaboration in a changing environment and
supporting streamlined communications between all
parties.
The endorsement of the creation of an ATO Partnership
Framework, for all partners including software developers,
should further enhance the ATO’s ability to improve
relationships with partners.
Australian Business Software Industry
Association
The Australian Business Software Industry Association
(ABSIA) was founded in 2014 as a non profit association to
support and represent the software community. Part of
ABSIA’s mandate is to change the way Government and
software vendors relate, communicate and collaborate.
Since its inception, ABSIA’s vision and strategic focus has
expanded to the broader software developer industry
ecosystem and whole-of-Government services. ABSIA’s
constitution outlines its role representing the interests of
software developers by:
 Consulting with Government on new projects and
initiatives.
 Liaising with other associations and industries.
 Providing information and education to the software
industry and wider community.
 Building software industry co-operation to enhance the
compatibility of business systems, resulting in
productivity gains (ABSIA, Constitution).
ABSIA and the ATO regularly collaborate. For example, the
ATO often presents at ABSIA forums and conferences.
ABSIA has also established a number of special interest
groups to assist the ATO and software developers with
engagement (e.g. payroll and superannuation).
ABSIA is performing a function for the software industry
that was previously conducted by the ATO Software
Developers Consultation Group. The transfer of these
functions to an independent body reduces cost to the ATO
and should increase the industry’s trust in the objectivity
of their representative association. However, recent
engagement suggests that some developers remain
sceptical of ABSIA’s value (Fjord, The Future of Working
with Our Partners – Discover, 2016).
The ATO is supporting ABSIA with staffing while it matures
and has an interest in continuing to support ABSIA to full
independence.
The Digital Transformation Office
The Digital Transformation Office (DTO) was established in
July 2015 to lead the transformation of Government
services. The DTO should deliver a better experience for all
Australians through the provision of public systems that
are simpler, clearer and faster. The ATO has already
commenced adoption of the DTO objectives via initiatives
such as Digital by Default.
The DTO has promoted the use of APIs to facilitate
‘aggregation of information and services through websites
and applications from both government and third parties’
(ATO, Corporate Horizon Scan – 2015, p.9). By making APIs
public, all software developers can design products that
are powered by its service. The ATO should continue to
offer APIs to enable business to easily use natural systems
to integrate with the ATO and to reduce the compliance
costs.
In May 2016, the DTO published a Digital Service Standard
to measure the performance of Federal Government
agencies (DTO, Digital Service Standard, 2016). The results
of this measurement will be available on a publicly
accessible dashboard. To support the Digital Service
Standard, the Australian Government has established a
Moratorium on Service Investment to ‘limit the
fragmenting of users’ experience across the Australian
Government’ (DTO, Moratorium on Service Investment,
2016). The Moratorium prevents government agencies
implementing information and transactional services
unless they are following the Standard.
While the ATO is currently compliant with the Standard
and Moratorium, the DTO’s work provides further impetus
for the ATO to continue to streamline information and
transactional services. The DTO Service Standard and focus
on measuring uptake of digital services strengthens the
role of SIPO in ensuring the ATO designs services that meet
the needs of the consumers (i.e. through consultation and
co-design).
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Software Developers: Current & Future Experience
Communication and Engagement
Key Points
 The Single Entry Point and Partner Client Relationship Management tools have the potential to resolve many of
the communication, engagement and support problems experienced by software developers. However as the
projects are still being developed, software developers are unlikely to see the benefits for some time.
 The ATO should engage with software developers to establish if there are any interim solutions that might
alleviate some of the issues in the short term. For example, introducing a single service standard across the
multiple helpdesks could result in more consistent support for the software developer client experience.
Traditionally in the ATO business lines have managed their
own partner relationships in silos and there is not a
consistent communications strategy for software
developers. Since August 2015, SIPO has been the
authoritative gateway between the ATO and the software
developer industry. However SBR, Enterprise Systems and
Technology (EST) and other business areas continue to use
established relationships and systems to directly engage
with software developers.
How do we communicate, engage and
provide support to developers?
Communication channels
Figure 7 shows the multiple channels the ATO uses to
formally communicate with software developers. It
demonstrates there is not a single holistic view of formal,
outbound correspondence with the software developer
industry.
Business areas are supposed to engage with
Intermediaries Communications and SIPO prior to
communicating with the industry to ensure messaging is
consistent and strategic. It is not clear how often this
actually occurs.
Face-to-face and online engagement
The ATO engages with software developers through
strategic, technical and special purpose working groups,
workplace visits, industry forums, and webinars.
As previously discussed, all engagements with software
developers are co-ordinated and recorded by SIPO in an
engagement calendar and shared with internal ATO
stakeholders and the industry. Further research is required
to determine if engagement has improved since this
process was formalised in 2015 and if there has been any
impact on software developers perceptions of the
relationship or their behaviour.
Figure 7: Communication channels
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Source: RA&I from data provided by SIPO and on ATO websites
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Software Developers: Current & Future Experience
Communication and Engagement
Support services (helpdesks)
There are three main helpdesks for software developers:
SIPO, SBR and a technical helpdesk provided by EST. There
are also project specific support services such as for
SuperStream and AUSkey, and account managers, and
on-boarding teams (ATO, Helpdesks for software
developers developing tax and superannuation software,
2015).
The ATO does not have a central record of all issues raised
by software developers through helpdesks. The helpdesks
share information on an as needs basis but because they
operate on different systems, they do not have access to
each other’s databases or share information about query
trends or volumes. Because there is no central record of
issues, it is hard for developers to track their query,
especially if it has been passed between different
helpdesks. Furthermore, the helpdesks have different
areas of expertise, hours of operation, service
management systems, quality of support and response
times (ATO, Helpdesks for software developers developing
tax and superannuation software, 2015). The various
incompatible systems make it challenging for the ATO to
offer a consistent and efficient client experience and to
know if issues are being correctly prioritised.
Consequences of inconsistent communication,
engagement and support services
The ATO’s fragmented communication with software
developers has resulted in:
 Software developer confusion about where to find
support
 Inconsistent, contradictory or duplicated information
provided to industry
 Inconsistent software developer client experiences
 Incorrect prioritisation of issues within the ATO and
slower resolution times.
 Higher costs for the ATO to maintain multiple helpdesks
and websites.
ATO research undertaken in 2016 found that software
developers were generally satisfied with ATO
communications but that they thought there was room for
improvement (ATO, Software Developer Client Experience
Survey, 2016). Software developers wanted to control the
information they received from the ATO as they often felt
overloaded (ATO, Software Developers website integration
into ato.gov.au, 2016).
According to some developers, workarounds and informal
communication channels are used to counter the
misalignment of how systems or business areas connect
(Fjord, Staff Working with Partners Research, 2016).
Steps to more effective communication
with software developers
The ATO has recently developed a client experience level
communication strategy that aims to improve the
experience for software developers (ATO, Strategic
Communication Overview for Software Developers, 2016).
The following initiatives are some of the programs already
underway in the ATO that have the potential to improve
the inconsistent and fragmented communication with the
industry. As these initiatives are managed by different
areas of the ATO (e.g. SIPO, ATO Corporate) it is important
that they are coordinated and consistent. If they are not
integrated there is a risk of exacerbating the existing
communication problems.
As the projects are in the early stages and benefits are
unlikely to be seen for some time, there are opportunities
to discuss possible interim solutions with software
developers to immediately address some of the
communication concerns.
Single Entry Point
One of the priorities identified during the Software
Developer Client Experience Workshop was a single entry
point for software developers to receive communications,
provide support, access information and streamline
engagements (ATO, The Future Client Experience
Workshop, 2015).
While still in the concept stage, the Single Entry Point has
the potential to address many of the communication issues
experienced by software developers. SIPO is responsible
for the project, with Fjord contracted to do initial research
and engagement (Fjord, Single Entry Point, 2016). At this
stage, only this initial phase of the project has funding
confirmed. The preliminary research was completed in
August 2016 (Fjord, Single Entry Point Utopia, 2016).
Meaningful collaboration and co-design is critical to
ensuring that the Single Entry Point meets the needs of
both software developers and the ATO.
Some questions that are being considered as the project
progresses that will ensure the solution successfully
improves the client experience include:
 How will it integrate with different business areas’
varying service standards and client management
systems?
 How will it integrate with existing informal relationships
and ‘workarounds’?
 How will it integrate with individual projects, account
managers and on-boarding teams?
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Software Developers: Current & Future Experience
Communication and Engagement
 What indicators will be used to measure the Single
Entry Point’s effectiveness at improving the client
experience? What baseline data will be used?
 Will the Single Entry Point only be for software
developers working on ATO initiatives? What about
other partners or other government agencies?
Client Relationship Management System
A client relationship management (CRM) tool is an end to
end software management system. A CRM is supported by
a set of practices, strategies and other technologies and
used to collect, manage and analyse client interactions and
data throughout the client lifecycle and across multiple
channels.
There is not an enterprise level system for managing
partner relationships in the ATO. A comprehensive CRM
has the potential to provide a more consistent client
experience for software developers regardless of who they
interact with across the ATO. The CRM initiative,
co-sponsored by SIPO and Tax Practitioner, Lodgment
Strategy and Compliance Support, is in the early stages of
development but it is scheduled to be developed over
2016 and 2017 (ATO, Intermediary/partner relationship
management system Project Plan, 2015). It is important
that any solution complements and integrates with the
Single Entry Point.
Website Integration
The ATO Design and Innovation group is undertaking a
redesign to integrate the Software Developer Homepage
and Community into the Tax Professionals area of the ATO
website. This is expected to occur throughout 2016 but the
timeframe for implementation is yet to be confirmed (ATO,
Software Developers website integration into ato.gov.au,
2016).
The project aligns with the expectation of the DTO that
agencies rationalise and integrate website content.
This project has the potential to streamline and refocus the
content of the various websites, ensuring information is
consistent and easy to find. One issue is that the SBR
website is not included in this project, presumably because
it is a whole of government initiative. There is an
opportunity to consider how communication on whole of
government initiatives like SBR can be better integrated
with the ATO’s communications and processes to ensure a
streamlined client experience.
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Software Developers: Performance Measures
Key Points
 Interaction with software developers is complex and fragmented, involving multiple business lines and support
services. As a consequence, it is difficult to assemble accurate and comprehensive performance metrics.
 A comprehensive framework for measuring performance of the partnership with, and service delivery to, software
developers is required.
While the ATO has not established performance indicators
to measure the client experience for various client groups,
work has commenced to develop a framework. The
absence of performance indicators for software developers
precludes a comprehensive assessment of the
effectiveness of service provision and engagement. This
section examines existing measures that provide some
indication of performance and recommends development
of appropriate performance measures.
Existing performance measures
Engagement
Software developers interact with the ATO either in an
intermediary capacity or by working collaboratively as a
partner. Basic indicators of engagement include
registration with the Software Developers homepage and
subscription to daily updates and the weekly software
developers newsletter (ATO, 2016, Operational Framework
for Developers and Service Providers-communication and
engagement plan, February 2016):
SIPO data detailing 198 engagements with software
developers between July 2015 and April 2016 provides
evidence of a partnership relationship. (ATO, SWD
Engagements, 2016). Figure 8 shows that the segments
with the most engagements were Superannuation (41%)
and Industry (26%). Channels of engagement were split
fairly evenly between face to face (47%) and phone (46%)
(ATO, SWD Engagements, 2016). This data is inadequate as
a measure of service delivery to software developers since
it does not:
 Include engagements between software developers
and other areas of the ATO.
 Provide an indication of the quality of engagements.
Figure 8: Engagements with software developers by segment and channel, July 2015 to April 2016
Source: ATO, 2016, SWD Engagements
Helpdesk data
Aggregated helpdesk data would provide an indication of
software developers’ experience, both for the immediate
period and to measure changes over time. SIPO collects
statistics on issues lodged with the SIPO helpdesk and
provides reports to software developers when issues have
not been resolved within two weeks but does not report
on the time taken to resolve issues. There is a lack of
transparency around actual service levels since issues
lodged with other helpdesks, or direct contact with
account managers are not included in the SIPO data.
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Software Developers: Performance Measures
Client Perceptions
Surveys of software developers’ perceptions are an
obvious source of performance measures of client service.
The Software Developers Survey in 2015 had a response
rate of only 4% which preclude generalising the results to
the software developer population. The response rate
improved to 8% for the Client Experience – Software
Developers (Baseline Report) 2016. Results of this survey
indicated that participants were generally satisfied with
ATO systems, communication and information. However,
less than half agreed that deployment schedules were
timely or that the ATO was responsive to queries about
deployments.
Client experience surveys will be conducted on a sixmonthly basis to track software developers’ perceptions of
the quality of their interaction with the ATO. The ATO
could consider strategies to improve the response rate.
Developing better performance
measures
Assessing the ATO’s performance for software developers
is dependent upon the development of appropriate
performance measures. Development will include: defining
qualitative and quantitative information; constructing
output measures that demonstrate effectiveness;
collecting, analysing and reporting performance (Figure 9)
service currently provided to software developers. This
should include common service standards and processes
for notifying software developers of progress and
outcomes. Some of the measures against target levels of
service could include:
 The number and type of issues logged
 Resolution times for issues - maximum, minimum,
average
 Communication regarding progress and confirmation
when issues are resolved
 Service outage times.
Implementation of the Single Entry Point for software
developers may contribute to this objective and reduce
confusion for those software developers who currently
contact different helpdesks for assistance relating to
different issues.
Thirdly, SIPO will attempt to address gaps in performance
measures through the development of indicators for
‘Measuring the Partnership Health’ later in 2016. The
measures under consideration will provide evidence of the
effectiveness of SIPO as the coordinator and facilitator of
interactions between the ATO and software developers.
Measures under consideration relate to:
 Increased engagement with the right partners at the
right time and in the right way.
Comprehensive performance measures may encompass
existing and planned initiatives consisting of three principal
components. Firstly, future client experience surveys will
reveal the trajectory of software developers’ satisfaction
with their relationship with the ATO.
 Increased consistency of communications and
messages.
Secondly, there is an opportunity for the ATO to develop a
set of metrics incorporating all ATO helpdesks to
contribute to an enhanced understanding of the level of
Analysing and reporting performance against these
indicators may be a catalyst for future service
improvements.
 Greater understanding by the ATO and software
developers of each other’s operating environment.
Figure 9: Developing performance indicators
Source: Australian Government Department of Finance, Resource Management Guide No. 31, 2015
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Software Developers: Client perceptions
Key Points
 Software developers highlight issues with trust, driven by the effectiveness of ATO communication channels and
the quality and timeliness of ATO information, services and tailored engagement.
 The client perceptions data is inconsistent; this could be due to issues with the research or the inconsistent client
experience of software developers (or both). Better quality research with larger and more representative samples
would improve the usefulness of the client perception data.
Perceptions about trust
The preceding pages highlight the importance of trust in
ensuring a positive client experience for software
developers. This section examines perceptions about
various aspects of the relationship between software
developers and the ATO that drive levels of trust, including
the quality and timeliness of the ATO’s communication,
specification and testing services and tailored engagement.
Consistent, high quality service delivery, will be essential to
regain and build trust with software developers,
particularly those developers impacted by previous
negative experiences.
 Feedback from a October 2015 Future Client
Experience workshop was that software developers
appreciated the ATO’s engagement, but it did not
necessarily suit their timeframes.
As mentioned throughout this document, the ATO is
undertaking a comprehensive program designed to build
strong, trusted relationships with software developers
through initiatives designed to improve co-design,
strategic and consistent communication, and co-ordinated
implementation in partnership with software developers.
Recent research findings present a mixed picture about the
impact of these measures so far.
Specific evidence on software developers’ levels of trust
and satisfaction with their relationship with the ATO has
been collected from research between 2014 and 2016.
The ATO could also consider undertaking research to
identify software developers in the population with
strongly negative perceptions and target engagement
activities to them.
Levels of trust
Tailored engagement
As a result of unsatisfactory interactions in the past, not all
developers trust the ATO to fully consider their needs,
quickly address issues or to deliver on commitments.
Reinvention highlighted the importance of tailored
communication and engagement as a mechanism for
improving the client experience and building effective
partnerships. Software developers expect the ATO to not
only provide accurate information at the right time and
through the right channels, but also to allow them to
control what information they receive from the ATO.
 Participants at a February 2016 Partner Space
workshop stated the biggest issue in the relationship is
a loss of trust in the ATO. Software developers:
• Did not believe that the ATO considered their or
their clients’ needs when setting deadlines.
• Considered that their needs are very different to
other intermediaries.
• Thought that the ATO is not sourcing the right mix
of people to represent all developers.
 Comparatively, the May 2016 Client Experience Survey
found that when asked directly, the majority of
participants stated they trust the ATO.
 In the same survey, around half of respondents thought
the information and resources that the ATO provides
allowed them to prepare their business for the future,
with about one-third indecisive.
 Only about half of the respondents to a July 2015
Software Developer Survey stated the SIPO helpdesk
met their needs (see box on page 21 about reliability of
this survey).
Getting information through the preferred channel
The ATO’s use of multiple communication channels, which
can release duplicated or disparate messages, reduces the
effectiveness of the ATO’s messaging, is confusing and
reduces trust in ATO information sources. Research
findings confirm the negative consequences of this
situation:
 In the May 2016 Client Experience Survey, respondents
overwhelming stated they preferred to receive
information and updates online, but were split on
which format (e.g. emails, website alerts, online news)
they preferred.
 In a July 2015 ATO Software Developer Survey, the
Software Developer Homepage and email alert, the
SIPO email address and face-to-face engagement were
rated as the preferred communication methods. There
were low levels of usage and satisfaction for other
channels such as social media (Twitter, Facebook,
LinkedIn), the Tax Professionals Community website,
and YouTube.
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 Participants at a Website Integration workshop in
March 2016 struggled to differentiate between the
different websites (Software Developers Homepage
and Community, ato.gov.au and sbr.gov.au). Having
multiple websites and sometimes conflicting
information was confusing and it was difficult to find
the right information at the right time. Some software
developers stated they prefer other sources of
information over the ATO to gain certainty on project
status and changes.
The Single Entry Point, Client Relationship Management
and Website Integration projects may improve the
consistency of information in the longer term, by offering
more streamlined and tailored communication.
There are opportunities for the ATO to also consider
interim solutions such as developing an overarching
software developer client experience communication
strategy and plan. The ATO could consider measuring the
effectiveness of messages to software developers using
different communication channels .
Getting information tailored to individual needs
Research findings reveal room for improvement in tailoring
communication to the needs of software developers:
 In the May 2016 Client Experience Survey respondents
were generally satisfied with ATO communications; but
a medium level of uncommitted responses and mixed
usage across channels indicates communication could
be better targeted and more effective. The SBR
channels were not included in this research.
 Participants at a Website Integration workshop in
March 2016 felt overloaded by the information they
receive from that ATO and wanted to be able to better
manage their subscriptions. They stated that software
developers’ information needs varied according to their
role and the stage of the development life cycle.
 Participants at ABSIA-ATO roundtable events in 2016
raised concerns about the quality of the ATO’s testing
services and time taken to resolve issues (ATO, PLS
working group, 2016).
 Participants at a Website Integration session in March
2016 stated ATO information is not timely and lack the
detail required.
 Around half of the respondents to the May 2016 Client
Experience Survey thought the ATO was too slow to
provide deployment schedules and address
deployment issues. However, most thought ATO staff
were knowledgeable and the information provided was
sufficient and reliable, including specifications.
 Respondents to a July 2015 Software Developer Survey
rated their relationship and engagement with the ATO
moderately, but highlighted timeliness as an issue.
The ATO is developing principles and guidelines to improve
the quality of technical documentation (ATO, Technical
Principles and Guidelines for B2G Digital Interactions,
2016). These should be implemented as soon as possible
to improve software developers’ perceptions of the quality
of ATO technical specifications
Issues with client perception data
The quality of the client perceptions research limits the
conclusions that can be drawn and findings cannot always
be generalised to the entire software developer
population. Issues identified with the research are:
 Low survey response rates and small sample sizes for
some surveys for the client group. The Software
Developers Survey (July 2015) had a 63 responses
which was a response rate of 4%.
 Participants are not representative of the software
developer population.
 Participants at the July 2015 ATO Software Developer
Survey found the most respondents were satisfied with
the ATO’s email alerts but wanted communication
more tailored to the products they develop.
Consequently, care has been taken in this document to
only present trends and not specific data. No external data
has been found that is specific enough to support the
internal client experience research.
The ATO should consider offering better and more detailed
subscription preference options on email and website
alerts, possibly through the Website Integration project.
This would give software developers greater control over
what information they receive, making it easier for them to
do their job, and contributing to a more positive client
experience. It would also improve the ATO’s understanding
of the software developer population.
Improved quality and regularly updated client experience
data will improve the ATO’s understanding of the
population and provide measures of effectiveness for the
ATO’s efforts to improve the client experience. The ATO
could consider alternative approaches to increase
participation (shorter surveys, incentives, timing).
Getting access to accurate information and robust
services when they are needed
The timely provision of accurate information and reliable
services are reoccurring issues for software developers and
has undermined trust in the ATO. Issues raised by software
developers include:
The ATO is measuring client perceptions through the
Software Developer Client Experience Survey which will be
conducted every six months. The October 2016 survey will
enable comparisons with the data from the Software
Developer Client Experience (Baseline Report) (May 2016)
to ascertain changes in levels of trust, and satisfaction with
ATO service delivery.
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20
Software Developers: Risk Landscape
Key points
 Cyber security poses a significant risk to the ATO and the software developer client experience and should be
considered as an ongoing organisational-wide risk.
 The current risk assessment documentation does not overtly address which client experience is impacted by a risk.
The ATO should continue to develop better ways to identify and monitor risks to the software developer client
experience, such as through the current Corporate Risk Review.
The approach taken in this section differs from other Client
Experience Performance and Direction documents. Risks to
the software developer client experience are not clearly
visible in the ATO’s Risk Register because software
developers are not identified by a business service line,
enterprise risk or market segment category.
The significant increase by the ATO of digital service
delivery has resulted in a situation where ‘the ATO faces a
multifaceted cyber threat from malicious actors including
foreign states, criminal groups and issue motivated groups’
(Australian Cyber Security Centre, Risk Assessment, 2015,
cited in ATO IT Security Strategy 2015-2020, 2015, p. 8).
Cyber and Data Security
Two of the ATO’s major objectives in relation to digital
services are: secure ICT systems; and the provision of
services that are tailored to contemporary needs and
community expectations (ATO IT Security Strategy 20152020, 2015). The provision of tailored services, such as
enterprise applications, increases security risks for the
ATO.
The cyber security threat to Australian organisations is
‘undeniable, unrelenting and continues to grow’
(Australian Cyber Security Centre, Threat Report, 2015, p
2). The adoption of rapidly evolving technology - including
e-commerce, enterprise apps and cloud computing - by
government and business has facilitated the delivery of
advanced and sophisticated services. However, the
dynamic nature of technology presents enormous security
challenges to both systems and data.
In 2014, the national computer emergency response team
(CERT Australia) responded to 11,073 cyber security
incidents. As illustrated in Figure 10 below, between 2011
and 2014, there has been a 261% increase in cyber security
incidents specifically targeting government systems.
Figure 10: Cyber security incident responses by Australian Signals
Directorate
It is now more crucial than ever that the ATO acts to
protect its systems and data. The ATO is aware of the
threat and is attempting to address cyber and data security
concerns. The ATO has produced a detailed IT Security
Strategy, that acknowledges the need for controls to be
implemented and maintained across multiple layers of
security: physical, network, IT systems and applications
(ATO IT Security Strategy 2015-2020, 2015). The ATO is
also currently undertaking a review of cyber security risk in
relation to digital services which will be considered in
future Performance and Directions documents.
Historically, the ATO exercised a high level of control over
its data in that there was only a one-way flow of data into
the organisation. This situation has been transformed with
increasing access to ATO systems by other government
agencies and external organisations. New initiatives, such
as the PLS, have introduced two-way data flows. The
transfer of ATO data to external organisations increases
the vulnerability of data. There is also likely to be a
significant degree of variation in security provision by
external users of ATO data.
The ATO has longstanding and trusted relationships with
some software developers. However, digital changes are
increasing the number of software developers interacting
with the ATO. The increasing number of new developers
increases the potential risks around unauthorised access
and data security. IT security risks should be earlier when
developing products or services with partners due to the
increased complexity in the supply chain.
In response to the escalation in the risk environment, the
ATO has developed and is implementing the Operational
Framework for Developers and Service Providers.
Source: Australian Cyber Security Centre, Threat Report, 2015
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21
Software Developers: Risk Landscape
The framework addresses:
 Registration processes for software developers in
relation to software or applications that connect to ATO
systems.
 Guidelines and minimum standards for products and
environments providers must meet to achieve
certification.
 Detection and management of threats to ATO systems
or fraudulent activity (ATO, Operational Framework for
Developers and Service Providers, 2016).
The ATO should regularly review its processes and security
systems in order to ensure their effectiveness.
ATO / Software Developer Relationship
The ATO has acknowledged the importance of its
relationship with the software developer community and
that there is a need to change the dynamics of this
relationship to build trust. Failure to engage, and to
improve its relationship, with this client group could pose a
significant risk to the ATO, particularly in relation to the
success of its digital transformation programs.
Although there is an enterprise risk for Tax and BAS Agents
- ‘Failure to engage effectively with tax and BAS agents,
and develop effective relationships with their
representative bodies’ - there is no corresponding risk
relating to software developers.
There is an opportunity for the ATO to develop an
enterprise risk for software developers similar to the risk
for Tax and BAS Agents.
Testing environment
Inadequate testing poses a risk to the ATO and software
developers. Currently, the ATO provides software
developers with testing environments and test cases to
facilitate testing of new products prior to implementation.
Concerns expressed by software developers about the
adequacy of the testing environment include:
 Continuing environment instability; the testing
environment is unavailable more often than is
acceptable to software developers.
 Incident resolution in the testing environment is not
optimal.
 The error logs that arise during testing do not provide
enough detail for developers to correct issues (ATO,
ABSIA-ATO PLS transition roundtable teleconference,
2016).
Inadequate testing may result in the non-identification of
errors prior to implementation of the system, resulting in
the collection or exchange of inaccurate data (that can be
carried across several systems), multiple input attempts
and duplication of effort and/or data and system failure.
Rectifying the consequences of inadequate testing can be
an expensive and time consuming process. It may require
live environment shutdown, resulting in users losing
confidence in the system. There may also be reputational
and cost implications for the ATO and software developers.
Given the pace of digital transformation, the ATO should
evaluate its current testing environment and implement
improvements to provide a robust testing environment for
software developers.
This will assist software developers to produce high quality
products so that end users are able to meet their tax and
superannuation obligations. The ATO should ensure that:
 The testing environment is continuously available and
accurately reflects the operational environment.
 Test cases are of high quality.
 Error logs contain sufficient detail for software
developers to identify and correct problems.
The software developer population
There is a risk that the ATO may fail to engage with a
proportion of software developers because it is difficult to
identify the software developer population and available
data is not representative of the entire population.
Failure to engage with a broad range of software
developers about new compliance requirements,
legislative amendments or government level initiatives
may result in poorer project outcomes and software
developers not implementing the changes to their
applications in time, or at all. This will have flow on effects
for the ATO and its partners.
For example, if software developers do not deploy the
changes to transition their clients to the PLS by the
deadline, it may result in non-compliant data, causing
potential risks that may include:
 Penalties for the affected users of the software for
incorrect reporting or submission.
 A loss of business and/or substantial reputational risk
for the software developer.
 Resource implications for the ATO due to data clean up
costs, resubmissions of data and the application of
penalties for non-compliant businesses.
 The ATO testing environment does not always
accurately reflect the production environment.
The ATO could undertake or commission further research
on the software developer population to:
 Some test cases have been considered to be of poor or
inconsistent quality. In some instances, the ‘expected
test’ results provided by the ATO have been incorrect,
leading to corrupted results and system quality issues.
 Identify those not currently engaged with the ATO.
 Evaluate the possible costs and benefits to the ATO of
establishing connections with the wider software
22
development community.
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Software Developers: Current investment picture
Key point
 It is challenging to comprehensively identify the total investment in the software developer client experience
because investment is spread across a number of different work areas and client experiences, and the ATO
finance and governance systems do not provide investment by client experience.
 Client experience investment information will enable more effective and evidence based decision making in the
ATO. The Strategic Costing Framework currently underway should produce a more detailed cost model, but it is
not clear if it will provide client experience investment for software developers. An alternative approach may
need to be developed for this particular client experience.
Unlike other client experiences where the investment is
centred in the Client Engagement Group, investment in the
software developer client experience touches on different
areas, projects and client experiences, including:
agents and software developers and FTE has been split
50/50, making it difficult to analyse changes in investment
(ATO, Client Engagement Group Risk Review, 2015).
 Software Industry Partnership Office in the Design and
Change Management Group
Figure 12 identifies the ATO proposed investment in
projects in 2016-17 that will have a direct impact on
improving the experience of software developers.
 Working with our Partners Strategic Program and PLS in
the Client Engagement Group and
Figure 12: Direct investment ($M) in the software developer client
experience by initiative 2016-17.
 Enterprise Solutions and Technology Group.
Other ATO areas that have direct contact with software
developers include: eCommerce Service Delivery
Onboarding Team, Superannuation, Customer Service and
Solutions, Marketing and Communications, Digital Delivery
and Business Reporting and Registration.
It is not possible to accurately identify the current
investment in the software developer client experience in
these areas. Without robust client experience level
investment information, it is not possible to ascertain if the
ATO’s current investment in software developers aligns to
the identified risks. The issue of misaligned governance
mechanisms is recognised in the Client Engagement Group
Risk Review (ATO, Client Engagement Group Risk Review
DRAFT, 2016, p.4).
Figure 11 provides the direct investment for the software
developer client experience that was able to be identified
for 2016-17.
Figure 11: Direct investment (FTE) in the software developer
client experience by work area, 2016-17
ATO Work Area
Software Developer Partnership
Office1
Working with our Partners Strategic
Program, Client Engagement Group2
Investment
(FTE)
Proposed Initiatives 2016-17
Investment
($M)
Software Developer Experience Priorities
Single Entry Point
1.4
Engagement and Communication
Strategy for Software Developers
0.5
Partnership Model with ATO and
Software Developers
0.4
Source:
1. ATO, Reinventing the ATO 2016-17 plan, 2016.
There are other significant initiatives relevant to
transforming the software developer client experience in
2016-17, including:
 PLS
 Simpler BAS
 Streamlined Business Registration
 Single Touch Payroll Pilot
 Enterprise Client Profile
 Service Level Standards
10*
 Software Assurance
 Digital Business Account
5
 Relationship and Authorisation Manager
Sources:
1. Software Industry Partnership Office
2. ATO, Client Engagement Group Risk Review DRAFT, 2016
The investment in the Working with our Partners program
has increased from 2 FTE in 2015-16 to 11 FTE in 2016-17,
plus contractor staff. Note this program covers both tax
(ATO, Every Year Counts for Software Developers, 2016).
These proposed initiatives will impact multiple client
groups and it is not possible to separately identify the
software developer client experience investment.
23
*Estimate only
FOR OFFICIAL USE ONLY
References
External Documents
Internal Documents
1.
Australian Bureau of Statistics (ABS) (2016), Cat. 8165.
Businesses by Main State by Industry by Employment
Size Ranges.
1.
Australian Taxation Office [Corporate Research and
Intelligence] (2016), Australian and global software
developments trends.
2.
Australian Communications and Media Authority
(ACMA) (2015), Cloud computing report.
2.
Australian Taxation Office (2016), Client
Communication Preferencing Research Findings.
3.
Australian Cyber Security Centre (ACSC) (2015), Threat
Report.
3.
Australian Taxation Office (2016), Client Engagement
Group Risk Review - DRAFT, July 2016.
4.
Australian Government Department of Finance (2015),
Resource Management Guide No. 31, Developing
good performance information.
4.
Australian Taxation Office (2016), Client Experience –
Software Developers (Baseline Report), May 2016.
5.
5.
Deloitte (2016), Australia’s Digital Pulse.
Australian Taxation Office (2016), Every Year Counts
for Software Developers, 2016-17.
6.
Deloitte Access Economics (2016), SMBs in the race
for the customer.
6.
Australian Taxation Office (2016), Forward program of
Work.
7.
Fjord (2016), ATO Partner Space Project Overview,
February 2016.
7.
Australian Taxation Office (2016), Operational
Framework for Developers and Service Providers.
8.
Fjord (2016), ATO Partner Space Software Developer
Summary, February 2016.
8.
Australian Taxation Office (2016), Partner Relationship
Model and Pilots Project Plan, as at 23 May 2016.
9.
Fjord (2016), Single Entry Point, May 2016.
9.
Australian Taxation Office (2016), PLS Fortnightly
Status Update 16 April, 2016.
10. Fjord (2016), Single Entry Point Utopia.
11. Fjord (2016), Staff Working with Partners Research.
12. Fjord (2016), The Future of Working with our Partners
– Discover.
13. Gartner (2016), Hype Cycle for Emerging Technologies.
14. IBISWorld (2016), Software publishing industry in
Australia.
15. KPMG (2016), Tax 2025.
16. Organisation for Economic Co-operation and
Development (OECD) (2015), The use of online
services in tax administration.
17. Organisation for Economic Co-operation and
Development OECD (2015), Tax Administration 2015:
Comparative Information on OECD and Other
Advanced and Emerging Economies.
18. Reserve Bank of Australia (RBA) (2015), The Economic
Trends, Challenges and Behaviour of Small Business in
Australia.
19. SIIA (2014), The U.S. Software Industry: An Engine for
Economic Growth and Employment.
10. Australian Taxation Office (2016), Reinventing the ATO
2016-17 plan.
11. Australian Taxation Office (2016), Software developer
homepage statistics.
12. Australian Taxation Office (2016), Software Developers
website integration into ato.gov.au.
13. Australian Taxation Office (2016), Software Industry
Work Program and Key Engagements.
14. Australian Taxation Office [SIPO] (2016), SWD
Engagements.
15. Australian Taxation Office (2016), Strategic
Intelligence Assessment.
16. Australian Taxation Office (2016), Tax Practitioner
Landscape Report.
17. Australian Taxation Office (2016), Technical Principles
and Guidelines for B2G Digital Interactions.
18. Australian Taxation Office (2016), ABSIA-ATO PLS
transition roundtable teleconference, 4 July 2016.
19. Australian Taxation Office (2015), ATO IT Security
Strategy 2015-2020.
20. Australian Taxation Office (2015), Cognos TPALS,
Sandpit_1, June 2015.
21. Australian Taxation Office (2015), Electronic vs Paper
Lodgments.
22. Australian Taxation Office (2015), Extended transition
period for the SBR-enabled PLS.
24
FOR OFFICIAL USE ONLY
References
Internal Documents
4.
Business Insider (2015), The cloud accounting
supremacy war in Australia,
http://www.businessinsider.com.au/charts-the-battlefor-supremacy-in-australias-cloud-accounting-market2015-4.
5.
Digital Transformation Office (DTO) (2016), Digital
Service Standard, https://www.dto.gov.au/standard/.
6.
Digital Transformation Office (DTO) (2016),
Moratorium on Service Investment,
https://www.dto.gov.au/standard/moratorium/.
7.
Europa (2014), Use of cloud computing services, 2014
(% of enterprises),
http://ec.europa.eu/eurostat/statisticsexplained/index.php/File:V2_Use_of_cloud_computin
g_services,_2014_%28%25_of_enterprises%29.png
8.
Forbes (2015), Roundup of small medium business
cloud computing forecasts,
http://www.forbes.com/sites/louiscolumbus/2015/05
/04/roundup-of-small-medium-business-cloudcomputing-forecasts-and-market-estimates2015/#31c89fc01646.
23. Australian Taxation Office (2015), Helpdesks for
software developers developing tax and
superannuation software.
24. Australian Taxation Office (2015),
Intermediary/partner relationship management
system Project Plan, as at 10 December 2015.
25. Australian Taxation Office (2015), Single entry point
for software developers in tax and super, Concept
Brief.
26. Australian Taxation Office (2015), Software Developers
Survey July 2015.
27. Australian Taxation Office (2015), Software Industry
Partnership Framework.
28. Australian Taxation Office (2015), Tax software
developer demographics.
29. Australian Taxation Office (2015), The new PLS –
transitioning from ELS to an SBR-enabled platform,
Status Update.
30. Australian Taxation Office (2015), The Future Client
Experience Workshop, October 2015.
31. Australian Taxation Office (2015), Working with our
Partners in the tax and super systems: Outcome
Profiles 2015.
32. Australian Taxation Office (2015), Corporate Horizon
Scan – 2015.
33. Australian Taxation Office (2014), ATO Tax Stats 201314.
34. Australian Taxation Office (2013), Compliance in focus
2013-14.
Notes
1. Key for Figure 5: AIIR-Annual Income Investment Report;
CSA&A-Cloud Software Authentication & Authorisation;
DBL&RM-Digital Business Account & Relationship
Manager; FATCA-Foreign Account Tax Compliance Act;
MIT-Managed Investment Trusts; PLS-Practitioner
Lodgment Service; SBRP-Streamlined Business Registration
Project; STP-Single Touch Payroll; TGGP-Taxable
Government Grants and Payments
Digital Website References
1.
Australian Business Software Industry Association
(ABSIA), Constitution,
http://www.absia.asn.au/data/ABSIA_Final_Constituti
on.pdf
2.
Australian Taxation Office (2016), Consultation
Administrative,
https://www.ato.gov.au/General/Consultation/Whatwe-are-consulting-about/Matters-underconsultation/Administrative/.
3.
Australian Taxation Office (2016), Practitioner
Lodgment Service Working Group,
http://softwaredevelopers.ato.gov.au/PLSWG
25
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