In the era of digital tax, a hallmark of leading global tax functions is how they drive transformation and value from the use of specialised technology. The smart deployment of tax technology enables them to strengthen and accelerate compliance; carry out flexible scenario modelling; and perform advanced planning and forecasting.
That’s why technology and transformation were among the themes explored by KPMG’s latest Global Tax Function Benchmarking Survey.
We questioned 200 tax leaders at multinational organisations. Encouragingly, we found transformation and technology to be high on their agenda. More than 80% said that having a tax transformation strategy involving technology is an important priority.
The prime objective for their change strategies was the use of data to unlock insights (cited by 80% of survey respondents). But tax leaders highlighted many other benefits. These include faster, more efficient compliance; better data management; reduced risk; improved team culture; and more opportunities for value creation
The way forward
Responsibility for technology-led tax transformation inevitably lies with tax leaders – as confirmed by three quarters (74%) of our survey participants.
Yet our findings suggest that they may not be well placed to deliver it. Some 73 percent have no dedicated tax technology resource; while on average, tech accounts for just 5 percent of their department’s spend.
Given these constraints, how can tax leaders go about making transformation happen? I’d recommend following these five steps:
1. Design and document your tax technology roadmap
Identify your key milestones for the next three years, and the ideal go-live date for each one. Working back from there, set out what you need to do to achieve them.
You might want to begin by rolling out each initiative in one specific area or jurisdiction, before building it out across the business.
2. Understand your stakeholders’ needs
The success of your transformation initiatives will depend on everyone affected by it – in and beyond the tax function.
It’s therefore vital that you map out all of these stakeholders. Which functions will your new systems need data from? Who must you work with to implement them? What are their requirements and success criteria? And how can you meet them?
3. Rethink your tax operating model
Transformation is preparing for the future – so think about the evolution of your tax operating model. What will your function’s roles and responsibilities look like in five years’ time? What skills and experience will these demand, and what technology will your team require?
4. Make use of what’s already there
Find out what’s in the firm’s existing technology stack that can help you reach your transformation goals. And see what levers you can pull from any current transformation programmes – such as cloud migrations, ERP system upgrades, etc.
5. Prove the value of the tech you’re investing in
Running a proof of concept and/or pilot project is an essential early step, as it’s an effective and low-risk way to:
- check that what you’re planning to implement will be fit for purpose
- demonstrate the value of your initiative before it goes live
- build confidence among your stakeholders from the outset
Don’t go it alone
Technology transformation will take most tax leaders into new territory – especially as most don’t have a dedicated tax technology resource to lean on.
As such, you may need expert help to develop your roadmap, identify your stakeholders, evolve your operating model, and so on. Bring in external advisors with knowledge and experience of tax transformation and technology implementation.
KPMG’s tax technology team has a track record of supporting technology-driven change for global tax functions. Our proven approach will help you accelerate your transformation while reducing the risks.
Please get in touch to see how we can help you achieve your transformation goals, and deliver value fast.
