Transforming Isle of Man's National Insurance system

We are proud to be working with the Isle of Man Government on the development of a replacement for their National Insurance system - a critical system which collects over £279 million of revenue to fund pensions, benefits and the NHS every year. 

Here's an overview of the project which explains why a new system was needed, the replacement options evaluated by the Isle of Man Government, and how PDMS is collaborating with the National Insurance team within the Income Tax Division of Treasury Department to deliver the new system. 

Tackling the challenges of legacy systems in government 

The Isle of Man Government operates a system of compulsory payments by employees and employers known as 'National Insurance contributions' to provide state assistance for people who are sick, unemployed, or retired. National Insurance contributions support the National Insurance fund which is used to provide a wide range of benefits for Isle of Man citizens that qualify. 

The National Insurance team (part of the Isle of Man Income Tax Division of Treasury) rely on a National Insurance Administration system to manage the collections, and the various processes, procedures and legislation associated with National Insurance. 

This key business system was written back in 1986 and today, the division is facing some of the common challenges around legacy systems. The system still performs its core functions, but maintenance and updates were becoming an issue. This is in part due to the limited number of staff with an in-depth knowledge of the COBOL programming language and the underlying architecture of the system. In addition, the outdated programming language also means that integration with other systems is limited, which has resulted in numerous manual workarounds and complex business processes.

The business rules and by extension, the system is highly complex, and the data retention policies add another layer of difficulty. All National Insurance data must be stored for a significant amount of time. Since National Insurance collections were introduced, the rules around National Insurance have changed, however, the system needs to store data and perform calculations based on the regulations in place at any given time throughout the entire history of National Insurance as we know it today. The system also needs to be adaptable to future changes to National Insurance contributions and policy changes. 

Evaluating options to ensure the best outcomes and maximum value for money 

The Income Tax Division reviewed the different options available to them for a replacement system that would meet both their current and future needs. The existing system has been in operation for over thirty years and given the critical importance of National Insurance to the Island’s economy and residents, it was imperative that this investment delivered a flexible solution that supported changes to government policies in a timely and cost-effective manner.

A range of options were evaluated against a set of core criteria. Ultimately, the decision came down to custom development versus the implementation and customisation of a generic solution e.g. CRM, ERP etc. In general, the perceived benefits of opting for a generic solution are lower implementation costs and faster deployment. However, analysis showed that these would have been offset by significant additional customisation and cost required to either adapt an existing tax system or configure and add to an ERP or CRM platform. Furthermore, due to the complexity and uniqueness of the administration system, as well as its critical nature, a bespoke solution was deemed more suitable, eliminating the need for compromises.

The National Insurance team opted for a custom development that would align with their existing technology standards and architecture principles and would be designed and developed from the ground up to meet all of their functional and legislative requirements. PDMS was successful in winning a competitive tender to replace the existing National Insurance Mainframe system with a modern, future-proofed IT system that complied with the Government Technology Services (GTS)’s Technical Code of Practice. 

Why PDMS was the ideal partner for this project 

PDMS was selected for a number of key reasons. Firstly, based on our track record and the expertise of our team in designing and developing complex and critical government systems where data security is of utmost importance.  Secondly, we demonstrated how we would collaborate effectively with the existing project team in Treasury, working on agile delivery principles both in person and remotely. Finally, we showcased our ability to deliver process improvements by assessing the business needs rather than replicating the existing system and processes, to create a better end journey for internal users and external customers.

Team progress: on track, on budget and unified 

The project was split into two phases. The first was an initial discovery phase to help understand the project objectives, stakeholders’ vision, the existing technical architecture and integrations and existing processes and procedures. Given the scale and complexity of the system, the design, development and testing would then be delivered over a 30-month period.

With the Discovery phase successfully completed and signed off, we are now 18 months into this multi-year project and are collectively making great progress. Project performance is reviewed every month via a project dashboard and the project is on track in terms of both deliverables and budget.  

The project delivery team is made up of subject matter experts from the National Insurance Team, a project manager and an analyst from the Isle of Man Government’s Business Change Services, and a dedicated team of people from PDMS covering analysis, project management, UX, solution architecture, software development and testing. End User Acceptance testing is coordinated from within the Income Tax Division, ensuring stakeholder buy-in and familiarity with the new system ensuring a seamless transition upon go-live. 

We have created a strong and positive team dynamic, with an established cadence of sprints, and work together as one cohesive team - whenever issues arise, we are able to work through them together constructively. 

The team at PDMS are thoroughly enjoying playing a role in this exciting project which is of national importance to the Isle of Man and an incredibly beneficial investment in the Island’s infrastructure. 

To find out more about how we support local governments, visit our Sector page here