This is an example of a long-form case study. The client referred to them as “Client Success Stories”.

Department of Revenue implements
new tax compliance data warehouse

The Washington State Department of Revenue’s (DOR) mission is to fairly and efficiently collect revenues and administer programs to fund public services and advocate sound tax policy. DOR collected $15.4 billion General Fund revenues during fiscal year 2000. Other functions of the DOR include generating estimates of the fiscal impact of proposed legislation and providing other tax-related analyses, overseeing the work of county assessors and working with other agencies on economic development issues.

The Challenge

The DOR operating division’s staff had limited access to internal data. Tax administration data was downloaded from the Tandem mainframe environment on a quarterly basis, and limited data from the Employment Security Department and Internal Revenue Service was also available. Access to this data required intervention from the Information Services and Research Division.In 2002, DOR decided to investigate applying data warehousing technology to its large volume of operational taxation application data, with the goal of increasing tax revenues and increasing audit efficiency.

By employing a data warehousing approach to aggregate and analyze this data, along with data feeds from external sources such as local and federal government and private industry, they could improve their tax discovery and compliance processes by providing greater access to data and better analysis capabilities.

The Solution

The DOR defined a three-phase approach to the project:

Phase 1 involved defining the project scope and approach.

Phase 2 included defining detailed business and technical requirements, developing a Request for Proposal (RFP) for the solution and performing the procurement process.

Phase 3 included implementing the chosen solution.

Sierra Systems was selected to complete Phase 1 of the project, and subsequently was requested to perform Phase 2. For Phase 1, Sierra Systems defined the overall Project Charter, encompassing the agency’s objectives, goals and constraints.

The approach to project management for the remainder of the initiative was also defined at this time. A detailed plan for completing Phase 2 (requirements and RFP) was also developed, and a high-level plan for implementing the solution was identified, based on an iterative approach congruent with data warehouse industry best practices.

In Phase 2, Sierra Systems developed the detailed Business Requirements and Technical Requirements. Business Requirements included:

  • Identifying desired report outcomes by subject area
  • Detailed data analysis of all data sources
  • ETL processes definition
  • Data matching (e.g. “soft match”) requirements
  • General reporting application functional requirements including access, security and performance

Technical Requirements included:

  • Analysis of DOR’s current environment
  • A complete definition of the target solution architecture including infrastructure, data architecture and application architecture
  • After completing the requirements, Sierra Systems developed the extensive RFP for the data warehouse solution including hardware, software and integration services. Sierra Systems then assisted with the procurement process, developing and negotiating the contract for the vendor selected.

Benefits and ROI

The first two iterations of the DOR Tax Compliance Data Warehouse were implemented by June 2003. DOR expects the initiative to pay for itself almost immediately through:

A quantitative improvement in identifying non-reporting and under-reporting businesses, resulting in increased revenue through compliance activities and increased compliance through education/enforcement activities.

More data available with more frequent updates; access to that data will be easier to deploy while still meeting the strict security requirements of the agency and its data providers.

The data warehouse will be combined with powerful new business end-user tools such as complex query, analysis and reporting software to allow maximum and efficient use of all of the data that is available.

Staff in the operating divisions (end-users) will be able to access current and historical data, create customized reports and queries, analyze data and automate processes without intervention by Information Services or Research staff.

The solution is flexible and scalable to meet DOR’s immediate needs, while also forming the foundation for future expansion as additional data sources and applications are identified and incorporated over time.

Sierra Systems helped DOR to define the framework upon which this solution could be acquired and implemented. Sierra Systems’ work on this project was completed on time and on budget and helped DOR to acquire the best possible solution to meet their specific needs.