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 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, 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 fully digitally-enabled, modern tax professionals, who now 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, while transformation questions every part of that ecosystem, guts it, and then rebuilds it according to the new rules of digital tax. Normally, one does not lead to the other.. Normally, one does not lead to the other.

Neither does hiring a big name consultancy appear on the list. Commercial imperatives demand they play to your current mindset, not a transformed one that is outside your comfort zone.

Also, forget running RFPs hoping to solve the problem. New technology by itself will not solve your problems. In the new world, "technology" needs re-orchestrated people, process and technology to be anything more than of 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.