The McCue Interview: John Yard, director of business services, Inland Revenue

It's rare for a government IT executive to get much publicity, even among the trade press, but John Yard has become something of a household name over the last decade after guiding the Inland Revenue through some of the biggest and most controversial outsourcing contracts ever seen in the UK, culminating in the surprise dumping of incumbent IT partner EDS in favour of Cap Gemini for the £3bn Aspire contract at the end of last year.

Yard is director of business services at the Revenue, although he reveals to silicon.com during the interview that he will be stepping down in July to set up his own outsourcing consultancy.

"I am setting up a consultancy focused on outsourcing and relationship management to help all sorts of organisations around outsourcing. You name it, I've done it and I'm looking to use that expertise on a much wider front than just government," he says.

Yard appears fairly unassuming for someone who has handled bigger contracts than most of his private sector CIO counterparts. He greets by his desk in the open plan directorate's floor at the Revenue's Bush House in London. As is to be expected by the layers of bureaucracy in the civil service he is flanked during the meeting by his deputy and a press officer – but the atmosphere is cordial and there's even a tin of biscuits to go around.

On first appearances it may seem more local council than a dynamic business environment but when it comes to Yard's achievements the facts speak for themselves. After starting out as a tax inspector he worked his way up to project management 20 years ago. And when the department decided to outsource its IT Yard oversaw the handover in 1994 to EDS and the transfer of 2,000 IT staff, and looked after the relationship for the next 10 years.

The re-tendering process for that contract began back in 2002 as Aspire. Although EDS had come in for some criticism over its performance from bodies such as the National Audit Office and Parliamentary Accounts Committee there was scepticism in the industry that the Revenue would be able to encourage other IT suppliers to commit valuable resources into bidding against such a deeply entrenched incumbent.

Yard says the key to encouraging bids from the likes of Cap Gemini and BT was to be honest with the market about a commitment to change supplier if the bid was good enough.

"The IT industry took a view that the incumbent was doing a pretty good job so why would we change," he says. "You have got to put some effort into explaining to the market and listen to concerns about taking part and be clear about the circumstances in which you would change supplier. You can't pretend in this game. You have to put a huge amount of effort into the sales pitch to the market. The market didn't expect us to come out so aggressively."

He also claims that because the Revenue owned all the data centres and buildings that it was not as "locked in" to the EDS deal as some observers claimed.

The tax office also made a contribution towards bidding costs to encourage competition but Yard says suppliers weren't just handed a big cheque.

"We made a contribution towards costs but we did it around a design and implementation study – they had to build something which had some value and we paid against completion of that. So we got something for our money."

That said, it still came as a surprise to most people that the Revenue took the leap and ditched EDS for Cap Gemini, which hasn't taken on a contract of this size before but Yard says that was one of the issues that was rigorously tested during the competition process.

"We wanted to make sure they did have the ability to do this. We tested the way they would go about it, including working with a series of co-partners," he explains. "It is very important for client organisations to check the bidder understands what they are bidding for. Sometimes bidders are keen to bid but when they win they're not sure what they bid for."

The handover of control of the Revenue's IT systems and some 80,000 desktops to Cap Gemini is two-thirds done and will be completed by 30 June and Yard says the process is going smoothly.

"I'm very pleased with the fact that EDS has played a very straight bat. They obviously want to demonstrate they can exit from these big deals with the flag held high."

One of the key factors to the success of the handover will be the retention of key managers from the EDS contract.

"It depends whether we get the people currently employed by EDS under TUPE to move across to Cap Gemini. The indications are that the majority will. Where that's not the case we are working with Cap Gemini and EDS for the shadowing of individuals so there is a transfer of knowledge," he says.

That process has already also begun for handover arrangements for Accenture's national insurance system contract, which is due to end next year.

The other major project the Revenue is engaged in is the merger of the department with Customs & Excise following the O' Donnell review last year. Although planning is still in its early stages, Yard is already in discussions with his counterpart in Customs.

"There are a set of workstreams around the merger, one of which is IT. The integration of IT is going to be key to this and we are working through looking at what options might be."

Yard says that the Aspire contract has also been built with flexibility to change the way the department operates following any merger.

Other projects on the table include a move to standardising systems and a review of the Revenue's desktop environment – currently Windows NT - is underway.

Yard's departure coincides with a general trend in government towards appointing CIOs to oversee the delivery of IT modernisation. An advert for the role of CIO for the merged Revenue and Customs has just been placed. Yard welcomes the move and doesn't see that the pressures of the role are any different to the private sector.

"I suspect the pressures are not that different," he says. "Everyone wants it to work and they are not interested unless it goes wrong and if it is not working they want it fixed. These pressures from business users are the same as outside. How different is that to shareholder pressure or board pressure in a bank."

As Yard looks forward to his new consultancy role you can't help feeling it marks the end of an era for both him and the Revenue, and his replacement will have a tough job to follow.