A successful digital strategy ensures processes and systems are streamlined, delivering greater efficiency and better compliance. Your goal, incidentally, should not be “automation at all costs”, but the development of a solution that fits the business.
Data plays an important part in this. Start the development of your strategy with the data that you have available, or that you can obtain at a realistic cost. Analyse the costs and benefits, which include e.g. staff, consultancy IT and licence costs. Other factors you need to take into account are the available resources, such as personnel and IT equipment, the organisational structure as well as the way your tax processes are designed and, if relevant, your tax control systems, especially those that work to reduce risks (Tax Compliance Management Systems).
Planned or current IT transformation projects play an important part, especially a potential transition to SAP S/4HANA, as do regulatory requirements both at home and abroad. After you have defined your digitalisation strategy, you need to review it regularly and adjust it as necessary.
Definition of your vision
Every strategy starts with a target. Define in as much detail as possible what you want to achieve with your digitalisation strategy. What role do you want your tax department and yourself to adopt within the company: this might be e.g. further reinforcing your role as a business partner? Does outsourcing maybe make sense, e.g. of compliance activities? What role could and should technology solutions be playing? The more clearly you can formulate your goals, the more focussed you can be in formulating your digitalisation strategy.
Quantifiable workload assessment
A reliable workload assessment is the foundation stone of a successful digital strategy, but is also the step that demands the most work. Based on facts that you can confirm, you define areas for taking action and potential opportunities for improvement. To do this, you first need to decide what information you need and how you can obtain it. It is also important to make the results you collect comparable, e.g. by applying uniform classifications. This enables you to identify and analyse items that create costs as well as oddities or inconsistencies.
Is a large proportion of the hours required for a particular type of tax caused by weaknesses in the processes, a series of manual steps or is there a problem with interfaces? What is the reason for the large amount of time spent on review activities for income tax returns or on value added tax compliance? Could this time be reduced e.g. by using automated validation routines with the same or maybe better quality results?
The answers to these questions can be found by targeted and quantifiable workload assessments. Not only this, but they also allow conclusions to be drawn, e.g. poor quality in one task may imply a lack of adequate focus. The workload assessment is not a simple task, but if it is planned well and carried out professionally, it delivers the quantifiable components that can be allocated for the creation of a suitable digital tax strategy.
Taking organisational and strategic factors into account
Other factors need to be considered when creating your digital strategy. For example, how is your tax department organised? What risks do you have? What current or planned projects could affect it?
Finalising your digital tax strategy
Once you have defined the areas in which you need to take action, then you need to identify suitable measures and solutions. The important part of this step is to define each benefit very clearly. Always look at solutions you have identified across the board. Silo solutions for partial aspects should become a thing of the past. After approving your digital tax strategy, create a structured project plan to implement your defined actions. Also plan suitable communication and change management measures for these, to get your staff on board from the start. An ongoing process to validate and, if necessary, adjust your digitalisation strategy is another essential part.
