A number of the findings in KPMG’s latest Global Tech survey are worthy of tax leaders’ attention.
On the surface, it is not surprising that artificial intelligence (AI) tops the executive agenda when it comes to IT. Senior business leaders see it as the most important technology for achieving their short-term goals.
But there’s an important message here for tax leaders. In a cost-constrained climate, when budget for technology transformation is scarce, AI implementations are more likely to secure funding from the board.
That’s not to suggest you should invest in AI just because it’s the next big thing – though worrying numbers of organizations might be doing exactly that. Our survey found that almost half of execs (45%) are prioritising AI because it’s what the market leaders are doing.
However, as I highlighted in a previous blog, AI has strong use cases within the tax function. So as you make the business case for tech-driven tax transformation, you’ll need to figure out where AI fits into the picture.
Getting ready for AI
While executives are prioritising AI investments, only 15% have reached the stage where they’re actively delivering their AI strategies.
That’s less than last year – a reflection, in my view, of how ChatGPT has changed the game over the past twelve months. Generative AI tools like ChatGPT offer ground-breaking capabilities, which many companies haven’t yet worked out how to truly harness. As a result, business leaders feel less on the front foot than before.
The first step in integrating AI into your tax technology landscape is to structure your tax data appropriately.
Your data must be navigable by the AI solutions you deploy – which means making sure it’s curated in one place. Pointing an AI solution at different data sources, sitting in different places, risks producing faulty answers to the problems you want it to solve.
That said, structuring your data efficiently should already be on your list of priorities – in fact, it should be part of your tax technology strategy and roadmap. The emergence of gen AI just adds impetus to the imperative.
Making the most of partnerships
Executives’ experiences with the ‘as-a-service’ IT model are revealing, given where they’re at with AI and data.
Almost two thirds (63%) of our survey respondents said that using XaaS offerings to deliver technology has improved their performance or profitability. And when asked what they’re using XaaS for, their top two responses were:
- supporting the operation of new technologies such as AI (cited by 51%)
- connecting data sources to enable advanced analytics (44%)
These findings point to the importance of leveraging partnerships to help you achieve your technology strategy and roll out your roadmap.
Tax leaders are rarely technologists. Yet with tax increasingly going digital, the IT demands on them are expanding.
They’re having to respond to digital tax authority mandates, while delivering insights and making data-led decisions. That means getting to grips with data quality, governance and privacy issues.
At the same time, they’re expected to embrace emerging technologies, while adapting to changes in their organisation’s current tech landscape, driven by major systems upgrades.
Try to handle all that inhouse and you’re likely to fall short: partnering is the key to getting your tax technology right.
Barriers to transformation
We also asked executives about the hurdles that are slowing down their digital transformation efforts. Among the most common responses were:
- A risk-averse culture. Tax leaders must establish a culture of innovation, and foster an environment where people are comfortable experimenting. For example, by providing safe versions of ChatGPT, on which their teams can try out ideas without worrying about the risks.
- Legacy technology constraints. Regulatory developments like Country-by-Country reporting will demand significant investment in data management systems. In many cases, that will in turn require the modernisation of the firm’s legacy technology.
- A lack of digital skills. Without the necessary digital skills among their teams, tax leaders will struggle to drive technology transformation. But tax professionals are rarely technologists. Training will therefore be vital – as will partnering: working with vendors and consultants who can bring the technical skills you’re missing.
These issues struck a chord, as I see tax functions come up against them all the time. Our experienced team can help. We’ve advised many tax leaders facing such problems, and assisted them with all aspects of their tax technology strategy and implementation.
Please get in touch to find out more about the tax technology trends happening in your industry, and see how we can support your transformation.
