A Big Step Forward for Digital Readiness in Tax

Congratulations, Giulia! – our latest certified taxologist!

Giulia was a great student and made every effort to ensure she grasped the principles covered. She went the extra mile during certification and tackled all available questions.

We asked Giulia a few questions about her experience with the program:

As a VAT manager, I was struggling mainly with two aspects:

1) interacting with IT and trying to find a common “language”  to solve issues and/or make improvements to the system, as I was convinced that they should be responsible for the technology and have all the answers; and 2) managing/supporting technology-related projects (e.g. system improvements; new tax engine implementation) as most of them would end up not meeting expectations. As a result, I felt frustrated and powerless most of the time.

“What made you want to work with us?

I came across the course because I was interested in learning more about tax technology and, more precisely, about how to make technology implementations successful and your course seemed to offer exactly what I was looking for. I heard positive reviews about the course and yourself and I decided to enroll.

“When you first came to us, what were your biggest hopes and desires?

My biggest hope was to get a better understanding of tax technologies; to acquire the right methodology/mindset to successfully deal with implementations; and to learn how to communicate with different departments to ensure tax requirements would be fully understood.

“And what have been the most valuable outcomes from our work together?

You have provided me first of all with a vision. And not only did you provide the answers I was seeking, I got much more than I expected besides.

 Although this is only the beginning of the journey and there are still so many new things I have and want to learn, I feel that I now have the right mindset and tools thanks to what I learned from the course material and our one-to-one sessions. You have provided me with valuable insights and recommendations and helped me become more open minded. I had to challenge my acquired knowledge a lot, unlearn and re-learn, and although I am conscious that the journey is still long, you put me on the right path.

“Thank you, Giulia. It was a pleasure working with you, and I look forward to working with you further as your journey unfolds.”

          Learn more.                      Connect with Giulia on LinkedIn.

 

 

Coming Soon: The New Tax Function

How far are you on your digital transformation journey? The scale below may offer some guidance.

Starting at the top, which is the last statement that accurately describes your tax function today (be honest)?

5% – the word “transformation” has entered the lexicon but plans are non-existent or lack coherence

7% – a tax or IT professional is put in charge of tax technology without any proper training

10% – the company is digitalizing and tax is tagging along, but transformation initiatives have little or no transformation in them

20% – a significant, corporate data initiative is in progress but not yet effective

30% – hiring of taxologists has begun, but the company is unsure what to do with them even if they can be identified and found

40% – a major mindset shift at the top, not just in tax; a true break with the past is acknowledged

50% – a reorg brings tax business and tax IT personnel under the same delivery structure

60% – a truly transformative vision is articulated, along with realistic mechanisms for fulfilment, governance, and control. For the most part after the reorg, everyone left now “gets it”

70% – momentum builds, successes mount up, a critical mass is reached. Fixed SOWs are pushed aside in favor of more agile co-sourcing, upskilling, “gig” consultants, collections, online communities, and tools

80% – tax professionals are genuinely becoming digitally aware, tech-savvy, and data literate. Patience with static, over-engineered, complex point solutions and tax applications is wearing thin. Continuous innovation is taking hold

90% – tax data is under holistic control and fully “trusted”. Tax are no longer just subject matter experts but full business partners to the rest of the business

100% – tax technology is a core competency of a new, fully digitally-enabled tax function.  Modern tax professionals define themselves by their prowess with enterprise data and the advanced tools they use.

Notice that automation does not appear anywhere in this list. That’s because business process automation is not digital transformation. They’re both relevant, but quite different. Automation brings efficiencies to your current tax function ecosystem, whereas transformation questions every part of that ecosystem, ransacks it, and then rebuilds it according to the new rules of digital tax. As a result, one rarely leads to the other.

Neither does hiring a big name consultancy appear in the list. While they have their place, commercial imperatives demand they play to your current mindset, not a transformed one outside your comfort zone. Real change must come from within.

Also, forget running RFPs to solve the problem. New technology itself will not cause transformation. In the digital world, “technology” needs re-orchestrated people, process and technology to bring anything more than incremental value at best.

So, think differently and explore first, if you want your tax function to truly perform and transform in the digital-era.

The Five Laws of Tax Data

Hundreds watched the insightful tax ‘data’ video from the last post and loved it, but thousands felt 13 minutes was too long and bypassed it. I sympathize – I would bypass it too if I’m busy, even for a snippet so central to the future of tax. So, here’s a short, sharp, incisive lead-in:

The Five Laws of Data for the Digitally-Enabled Tax Function:

Law #1: ‘Data’ is at the heart of digital-enablement

Strategy: Be clear that enterprise ‘data’ is the absolute cornerstone of digital capability.

Law #2: Digital ‘data’ changes the rules of the game

Strategy: Acknowledge that new ways of thinking and working are inherent to being data-driven.

Law #3: ‘Data’ is a strategic asset in its own right

Strategy: Recognise that ‘data’ has intrinsic value and requires a data first approach.

Law #4: ‘Data’ outranks automation

Strategy: Set automation strategies to first and foremost support the data model.

Law #5: ‘Data’ only exists in a transformed space

Strategy: Learn to navigate the transformation journey and transition to data-centric operations over time.

Narrative

‘Data’ thrives within the context of people, process & technology  where ‘technology’ is platform-based and ‘people’ are digitally-enabled, tech-savvy, and data literate. This is the opposite of business process automation with labour cost-arbitration as its yardstick. ‘Data’ requires upskilling and can only take centre-stage once it is fully “trusted”.

For a vital piece of information on how to make this happen using “real-world” tax data modelling, here is the video again https://vimeo.com/434443089. It is well worth the small time investment. Enjoy.

Tax Data – Secrets Revealed

‘Data’ is the key to digitally enabling your tax function, and this is well understood. But few know how to make this actually happen. What’s more, it’s easy to get off on the wrong foot.

So, how have some companies made tax data a true strategic asset? Watch this 13 min video to reveal their secret.

Taxology Stumbles and Evolves

The Evolution of Technology in Tax Studies

The nascent body of knowledge required by a taxologist is under fire, despite showing real value spearheading tax into the digital era.

I resent the pseudo-profession that claims to be taxology − it muddies the waters when my focus is meeting customer needs“, exclaims a seasoned consultant. We disagree, but then again, it’s easy to see why he thinks this way. Besides the commercial aspect, the vast majority of people that call themselves taxologists are in fact tax technologists − familiar with specific tax technology products rather than digital environments for tax as a whole − or have only painful experience as a teacher. Either way, it’s not enough.

Never-the-less, 2019 is experiencing a sea-change in this area. Several universities on both sides of the pond have added technology modules to their tax curriculum and students are writing post-graduate dissertations in it. In Amsterdam, IBFD are running a tax technology course this summer as are Yetter in Chicago, Illinois.

Conversely, others are holding back. The idea has taken hold that tax authorities will soon be telling taxpayers what they owe and therefore need only wait. This view is blinkered and, quite frankly, untrue. The authorities may take away a few last-link-in-the-chain computations, but their new business-meaning aware technology will squeeze taxpayers to death if their data is not right.

Others hesitate for different reasons. Maybe robotics (RPA) or artificial intelligence (AI) has magical powers, or finance will fix it with their transformation effort, or cloud, or some other technological fairy godmother. There’s certainly enough confused turbulence out there, never mind current workloads, skills shortages, cost constraints and market obscuration.

Unsurprisingly, universities focus their technology in tax efforts on the legal side. For example, one doctoral thesis explores how AI might sift through mountains of legislation and case law for rapid and new-world discernment of insights. Alternatively, they teach IT 101 to budding tax professionals. These are great developments, but do little to help existing tax solution owners at major companies facing today’s pressing challenges.

Taxology, on the other hand, is distinct and aimed squarely at the corporate tax arena where the majority of us battle on a daily basis. It needs to be quick, easy-to-understand, practical and relevant.

PawPaw Taxology is evolving and now focusing all its efforts on exactly this. That seasoned consultant is unaware of how the concepts, knowledge and vision offered both illuminate customers’ true needs in the digital era and accelerate the value of his own products and services in today’s environments.

Look at it this way − even if customers insist on applying industrial-age thinking to information-age problems (which they frequently do and, of course, must be delivered as requested), it’s still critical to have the difference in your back pocket when they finally get tired of the suboptimal status quo, or worse.

The self-study Smart Tax Technology certification program is that difference, so if nothing else, stock up your storm shelter now.