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Customer Engagement

In the Era of Digital Transformation, Even the IRS Cares About Customer Experience

IRS leaders are on the march toward digital transformation with an ambitious $2.7B IT modernization plan that puts CX at the forefront

Customer experience stands as such a central driver of digital transformation that even the Internal Revenue Service (IRS) points to it as a fundamental pillar of its technological future. The bureaucrats at the IRS may not be best known for making the lives of taxpayers easier, but that’s exactly what they say is pushing them to embark on a six-year IT modernization initiative that will upgrade IRS operations and technology infrastructure.

The IRS states that it hopes to develop capabilities through this $2.7 billion digital transformation effort that will enable it to “deliver a customer experience comparable to the best financial institutions in the world,” according to a comprehensive strategic plan the organization released yesterday.

“Modernized systems are the key component to delivering quality service to taxpayers, providing efficient and robust enforcement activities and keeping taxpayer data secure,” explained IRS Commissioner Chuck Rettig.

Created with the help of experts from McKinsey & Co and MITRE Corporation, the strategy unveiled this week rests on four major pillars: taxpayer experience, core taxpayer services and enforcement, modernized IRS operations, and cybersecurity and data protection. The first pillar is obviously tantamount with customer experience, but all four have a tie-in back to serving taxpayers and those in the tax community with the services and data capabilities of a modern organization.

The strategy includes provisions for standardizing customer workflows and expanding taxpayer access to information, reducing call wait times and case resolution time through customer callback technology and better live online support, simplifying identity verification while bolstering its security, and generally increasing systems availability through IT infrastructure improvements.

A big part of the modernization effort will be to work on technical debt that’s been piling up at an accelerated rate since the passing of new changes to federal tax law.

“Faced with complex tax laws and time constraints, the IRS has had to continuously add systems to its IT environment,” agency officials explained in a fact sheet on the proposed modernization initiative. “The result is a highly complex technical ecosystem; the cost of which is growing on an unsustainable trajectory.”

As a result, much of the plan revolves around reducing system complexity and increasing standardization in underlying IRS IT architecture.

In the process, the IRS expects to weave in emerging technologies like robotic process automation (RPA), artificial intelligence (AI), and data analytics to drive more technology enhanced services. Like so many organizations undergoing digital transformation today, the IRS plans to fully embrace DevOps methodologies and more fully shift to the cloud in order to meet these technology and business goals.

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