H&R Block delivers scalable, multichannel tax preparation services with Microsoft SQL Server 2017

800 million tax returns and counting

The tax industry has changed a lot over the last decade or so. For H&R Block—a US tax services provider that’s delivered expert guidance, online filing services, and audit support for more than 800 million tax returns since 1955—this has brought new opportunities. 

“The current pace of technology innovation challenged us to look at our entire service offering in a very different way,” says Sameer Agarwal, Manager-Enterprise Data Analytics at H&R Block. “We set out to reimagine the services we deliver to customers.”                                

H&R Block is working to offer seamless client experiences, whether online using its virtual or do-it-yourself product or in person, getting expert preparation from a tax professional. To deliver this kind of holistic experience, the company needs to simplify data collection, access, and analysis, so H&R Block is uniting a set of disparate data stores spread across multiple legacy database technologies. The company also needed scalability to cope with the seasonal nature of its business and a robust set of tools to safeguard customer data and comply with privacy regulations. So in 2018, H&R Block moved the data warehousing workloads in its customer-facing services to Microsoft SQL Server 2017. 

“We were using legacy data warehouse platforms that were approaching their end of life. We wanted an environment that could meet our growing business needs and cope better with surges in demand when many people file their tax returns,” Agarwal says. “We recognized that SQL Server 2017 was a good fit for us—now we can easily meet our scaling requirements for peaks in demand in our operational data store and warehouse. And platform modernization in Microsoft Azure has helped us to further standardize and simplify our database development.”

A challenging migration

When H&R Block moved its data from legacy platforms to SQL Server 2017, it used a mix of data migration tools, including Attunity software, SQL Server Integration Services, and text files, depending on the legacy platform compatibility with SQL Server. “Data migration was challenging due to the table sizes and data type compatibility between legacy platforms and SQL Server, but once the team started doing it, they learned the tricks pretty fast,” says Agarwal. Switching extract, transform, and load (ETL) processes from the legacy platform to SQL Server was another challenging task. H&R Block kept new environments running in parallel for a few weeks before doing the final cutover to scale-test the newly configured SQL Server.

The company then moved its customer-facing systems—including a DIY online tax-filing app and an appointment application used by 10,000 offices—to SQL Server on Azure Virtual Machines. H&R Block used SQL Server 2017 availability groups, with a cluster running across Azure and the company’s on-premises environment. Active-passive nodes in Azure performed synchronous replication, and a third instance running as an on-premises cluster performed asynchronous replication.

As part of the next phase of its modernization, H&R Block is migrating the data tier of all its applications to Azure data services, including Azure SQL Database managed instance. “SQL Database managed instance gives us a smooth migration path for moving existing workloads to Azure with minimal technical reengineering,” says Agarwal. “All the applications have a target architecture in Azure SQL Database so they can take advantage of zone awareness and scale up or down to meet changing demands in a cost-optimized way for our seasonal business.”

The company uses Azure to quickly build intelligent apps for employees and customers alike. H&R Block now has the scalability and flexibility it needs to meet tax-season peaks in demand, and its users are happy with the performance and reliability of the applications. Spurred on by the internal and external satisfaction with its newly unified data architecture, the company continues working on several new initiatives using advanced digital technologies.

“We have now been through one entire tax season with SQL Server 2017 for our operational data store and data warehouse, and migration worked with minimal issues,” says Agarwal. “Also, Azure makes it easier to continue our work using AI, machine learning, and other ways to serve our customers better.” 

An innovative future

Large-scale IT transformation is never easy, but the H&R Block team recognizes the risk associated with not continuing to innovate. And Agarwal highlights innovation as one of the many things that is a core focus as the company continues its transformation journey to disrupt the tax preparation industry. With the ability to analyze data more quickly and roll out solutions to its customers faster, along with the security and compliance features built into SQL Server and Azure data services, H&R Block is positioning itself to tackle future challenges head on—and provide the exceptional multichannel experiences that keep customers coming back.

Part of H&R Block’s digital transformation has been changing how the company builds and delivers its systems in the cloud, including adopting DevOps practices. H&R Block is now able to build and design systems faster with Azure DevOps. “We’re able to deliver product functionality faster through automated testing and Application Insights,” says Kristina Wilson, IT Manager, Client Applications at H&R Block.

Adds Agarwal, “We no longer have separate data platform silos for relational data, and we can quickly spin up new solutions in Azure for reporting and analytics and bring the data together,” says Agarwal. “All of our data experts are now working in SQL Server and Azure, so they can work together in a common domain and reduce the roadblocks to delivering smart, powerful solutions.”

As H&R Block’s Azure presence continues to grow, the company is able to give its teams better access to data and new ways to use and analyze that data to design and deliver better experiences to clients. A new data science environment in Azure helps with this goal. Native integration of Azure Databricks reduces operational complexity and gives H&R Block dynamic Apache Spark capabilities for its analytics workload. Now, H&R Block can use more intelligent models to present clients with the tax tips and offerings that are most relevant to them.

“Investing in Azure data services and data platforms has set up an amazing foundation for us to accelerate delivery of new products and services to our clients,” says Aditya Thadani, Vice President Architecture and Information Management at H&R Block.

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