TEI Roundtable No. 30: Tax and Tax Technology
Meeting customer needs—now and in the future

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If you’re a tax professional, you know the significance of tax technology. It’s just as important as tax regulations, tax transactions, or any other aspect of the field. That’s why the theme of this issue is tax technology, why we established Tax Technology Corner as a regular column in this magazine, why we chose tax technology for a roundtable discussion at the virtual midyear meeting, and why we’re providing an edited transcript of the roundtable discussion in this issue. That discussion included a slide presentation and polling of attendees on various tax technology issues. The session, moderated by Sandhya Edupuganty, tax compliance and technology director at Texas Instruments, included these tax technology experts: Michael Bernard, chief tax officer—transaction tax, at Vertex Inc; Brian Billett, senior director at CSC Corptax; and Chris Carlstead, head of strategic accounts and of partnerships and alliances at Thomson Reuters.

Sandhya Edupuganty: One thing I want to call out is with regard to what has happened over the last several months from a disruption perspective. COVID-19 is here, it appears it’s not going away anytime soon, so I think we need to understand and incorporate the perspective that it gives us. How has it disrupted our business? How has it affected our ability to do our jobs as tax professionals? Gentlemen, I invite each of you to give your perspectives at a high level, and I know we will, throughout the session, speak to “OK, this is a disruption, and this might be a major pandemic-type disruption, but we have faced disruption as tax professionals throughout our careers, and it usually comes from business or the government.” But let’s talk about what COVID-19 has done to us from a tax technology perspective. Mike, would you like to take the lead on that?

Michael Bernard: Sure. So, Sandhya, there’s probably two things I’d want to say. First of all, a lot of the professionals on the call have been working from home the past several months. Prior to the pandemic, only about four percent of the information workers in the US worked from home, and obviously that percentage is substantially higher today. Because tax professionals are “information workers,” a substantial portion will likely be working from home for the next several months. The question is, Is this the new norm? I think it will be. In talking to customers, a solid one-third of them say they are more productive working from home and like the fact they do not have to commute. Tax leaders will be making decisions as to how to structure their teams in the future around working in the office and working from home. Many leaders have a tax team around the world, so they are already skilled in managing a widely distributed team. Other leaders will need to gain that skill. I have managed a team that spans eight time zones, and communication is really the key to knowing what the team is working on and how to respond to the business’ needs. From a technology standpoint, many of our customers that were set up as digital offices prior to the pandemic have fared well. These offices already had digital repositories of data, which were well networked, and efficient tools enabled them to remain productive. For those companies that have yet to make the transition to a digital distributed network, certainly challenges lie ahead. I would suggest that gaining insights as to how to transform your office to digital can be achieved by contacting colleagues in TEI. One other key point, on the tax policy side, [is that] the measures that the governments have taken around the world have been very expensive—both in terms of fiscal and monetary efforts. In the EU, it’s been around nineteen percent of GDP which has been committed, and in the US about seventeen percent. That is a tremendous amount of spending, and there will have to be tax policy decisions made on a national, state, and local level to pay for all of this. This will create additional work for tax departments, because the tax base will likely be expanded and tax operations will need to expand, and, once you start asking companies to comply with new rules, that obviously touches their technology. So, the best thing I could advocate for is to be cognizant of these changes and keep IT and other finance leaders aware of how dynamic tax will continue to be moving forward—particularly these next several years.

Edupuganty: Thank you. Brian, what would you say?

Brian Billett: I guess there’s a couple quick things. If necessity is the mother of invention—or adversity, I guess, depending on how you look at the quote—I think tax people in my experience have always been very creative, and they find ways to do things and get things done. It’s never a good thing, but I think there will be good things that come out of this. I think having to be able to adapt to the situation will lead to improvements from an overall perspective in process and technology. I think the tax departments in companies that have faced more challenges are better positioned. For others, it’s probably an opportunity and time to look at your processes and technologies and where you can make improvements. I think business and operations will have changed forever. I mean, it will not be the same “normal” again, I think for the better in many ways, right? And I think that we need to look at that and how that extends to tax and how tax operations work throughout the entire organization, including with the businesses.

Edupuganty: Thank you. Chris, what are your thoughts?

Chris Carlstead: This is the downside to going last on a panel of seasoned folks. I would agree with what Brian and Mike have said. I guess I’d add maybe a personal side to it. There has probably never been an event—at least in my life or for a very long time—where we all are experiencing the same thing at the same time in very similar ways. Now, of course, depending on your family situation, your perspective on the matter may be different, but everyone having to stay at home, it’s a unifying factor that is quite unique. I think we’ll find in our professional lives that this will have a lasting impact. I think some of the elements that Brian and Mike brought up touch on that, and I think the way we work going forward will be different. Not that we’re looking for more compelling events in our industry, because governments seem to hand them to us all the time, but COVID is yet another event that government is reacting to. It’s going to lead to more regulation, it’s going to lead to more complexity, and, quite frankly, it’s going to accelerate the adoption and need for technology. So, I think that this discussion is as timely as it ever could have been. We are already seeing adaptation in supply chains and the way people look at how they manage their supply chains, where they’re located, who they’re working with, supplier reliability, know[ing] your customer, and elements of risk in those categories. In this environment, fraud is at the forefront of concerns for many companies and will be for the foreseeable future, especially, building on Mike’s point, with all of the stimulus that’s going into the global economy right now. So, I guess, hang on and stay safe. And hopefully we’ll all be back in our offices soon enough.

Edupuganty: Thank you, gentlemen. Those are all very perceptive points to bring up and think through. OK, let’s get to our first polling question: Did a tax or IT professional from your company attend the TEI tax and tax technology seminar either in February 2019 or February 2020? Your options are: “I or a team member attended the 2019 session”; option B is “I attended the 2020 session”; the third option is “I or a team member attended both years”; or, lastly, “No one from my company attended the TEI technology seminar.” So, while we give everybody a few seconds to respond to this question, I know that, gentlemen, your companies or you individually did attend one or both of these seminars. What are your thoughts on some of the talking points or concepts that came about from these seminars?

Bernard: I would say probably I think the most valuable thing that happened the last two years was that, if you think about TEI, it’s an organization that’s been around for seventy-five years. And one of its premier attributes is that you build a valuable network through TEI. This event, I think, is very unique, because it helps to build a network for tax technologists, for people within the tax department, and for people who are IT people as well. I want to compliment, obviously, Chris and Brian as well for being there and sponsoring it. Vertex will continue to sponsor this event as we did for the first two. The professional service community [has] really supported this. It’s a place where you can talk to experts from ERP systems to discrete technology tools. In my mind, besides the content that’s delivered and the ideas which are exchanged, the corporate tax/IT and service provider communities are getting to know one another just as the tax and service provider communities have exchanged ideas for seventy-five years at TEI.

Carlstead: I’ll just jump in and say that I think it’s long overdue. Quite frankly, I’m really pleased that TEI went in this direction. I think it provides an incredible forum to bring technology and tax together and really provide a path for education in a way that was previously missed—especially in recent years as newer technologies have taken on a larger footprint inside the tax department.

Edupuganty: In looking at these polling results, it’s interesting that seventy-five percent were not able to attend or did not attend. My feedback to that would be I think tax technology, as an educational opportunity in understanding what is out there and what we need, has to become part of our day-to-day thought process as much as our tax technical experience continues to be a required skill set. So, if we move on to—

Billett: Sandhya, this is Brian. Just one more plug real quick, because we’re going to touch on pieces of this later, so I don’t want to spend too much time on it. But I just want to restate my opinion as well, how important it is. And I want to mention that it was two days full of content. I mean, it was a full two-day conference, and it was very well attended. I was very impressed with the number of people and where different tax departments are. And I know one big piece of feedback we always get on our conferences—and I’m sure Eli [Dicker] gets the same—is that one of the biggest benefits is the networking with your colleagues and learning and understanding what they’re doing, what they’re doing in terms of technology and how they’re applying it and the benefits. The couple sessions that I was involved with, you could just see that happening. So, again, I’m just putting my own plug in, because I thought it was a great conference, and I really would encourage people to consider sending somebody to be engaged with what’s going on in the tax technology space.

Edupuganty: Brian, thank you for that. I totally agree with you, and as much as I continue to learn from experts in different fields, whether technical or technological, there is so much value with exchanging ideas and experiences with colleagues that cannot be matched. So yes, I agree. So, if we move to: What are some of the terms? And this is just at a high level, some terms. There’s obviously blockchain, which isn’t included here. There’s some other technologies that aren’t necessarily indicated here. This is just to indicate that for tax professionals, whether you’re the head of tax or the person with a couple of years’ experience coming into the tax department, it is important to understand what these technologies do and the interplay between them. With that, I would invite any additional thought processes from my panelists regarding how we look at technologies and understand them.

Bernard: Sandhya, one thing maybe I would just hover on is the very last item, which I think we’re going to talk quite a bit about today—where we talk about IT project management. Those of you who are well versed in technology understand what the “phase-gate approach” is; in other words, if you think about all the technology that is brought to the tax department, those projects are IT driven, with an IT process project management. You can have a tax outcome, but the way it gets implemented is first there’s an assessment of what the current state is. You scope to what you want the project to be; there has to be a commitment from both tax and IT, finance and business, and lastly you have to deliver a solution. I would say if there’s anything of these that I would say you probably want to focus on, just from my perspective, understand what those phase gates are and understand how IT operates and what measures are important to them, because that’s going to be a key component to your success.

Working Knowledge vs. Operational Knowledge

Edupuganty: Brian or Chris, would you like to add any commentary?

Carlstead: I’ll say something quickly. I think what’s important here, and also the takeaway, is, regardless of the size of company that you may represent, we all must continue to develop a working knowledge of technology as distinguished from operational knowledge. So, working knowledge—being able to know the terms, know what they mean, and know how they might fit into your work environment, whether that’s in a tax department or if you’re in a smaller business and you’re a keeper of many different tasks including tax. Being able to understand how these technologies fit into a growing ecosystem of technologies that are all around you and largely there to help you will bring you a long way in figuring out how best to leverage the ones that are most beneficial to you. As a profession, you all, I know, have taken great pride in digging into statutes and regulations, and this really is no different, and it requires your attention as well.

Edupuganty: Thank you, Chris. I totally agree. And, if anything, what I would say is the complexity—whether it’s TCJA [the Tax Cuts and Jobs Act] or all of the initiatives that are coming about because of what COVID-19 has done and is doing—requires additional eyes, additional staffing. And that’s something that we’re not going to get. So, then, it begs the question, How are we dealing with what we have on our plates and making it more transparent and easier to get through? Mike, what are your thoughts on where tax stands in its relationship with IT and the technology journey?

Bernard: I’m going to focus probably on the first two bullets on the slide, and then I’ll focus on the last bullet as well, and obviously invite Chris and Brian to weigh in also. A lot of things in the middle are things we’re actually going to touch on later on in the presentation. I guess the first thing I would say, as it relates to the first bullet, is I think one thing that you can do is you can benchmark within your industry and maybe other companies that you have good relationships with. I think a lot of what you’ll be benchmarking is probably your best practices in terms of how you implement something or how you upgrade your tools—or actually what tools are the most valuable for you. But, ultimately, you have to build a tax technology structure around your business, and that really kind of goes to the second bullet point. If you’re in the telecom or transportation industry or utilities, you need an environment that can handle literally millions of transactions and be able to report those out and use that data properly to meet your regulatory requirements. That is very different if you are a distributor. If you’re delivering things off of a truck and you have to change the order when you get to, say, a restaurant or grocery store and you need to take something off the order or add something, well, you need mobile devices and you need mobile technology to actually address that. If you want to build your own e-commerce website rather than put your products on a marketplace, you will need to build a solution around that. We see this with our customers all the time. I’m sure Chris and Brian do as well. The other point I want to point out is the very last one, where, if you look at those five groups that we’ve listed out there, we’ve talking about governance, SOX, attest, internal audit, and financial accounting. The one thing that kind of runs through all of those five groups is that they’re all in the regulatory space. In other words, they’re trying to look at your environment and determine whether you’re meeting your requirements as it relates to regulatory. What I’d like to focus in on, and Sandhya mentioned this earlier, is those three groups in the middle: SOX, attest, and internal audit. When I was in industry, I considered these three groups the key to my success, in addition to IT. The reason is because most of them are very tied to the business. They normally write very well-documented reports on certain functional areas. They have disciplines contained within them of IT, reporting, and business intelligence, and they really can help you analyze your IT environment and actually help you write compelling stories around areas where there are gaps in your IT and tax environment. So, I really would encourage TEI members to utilize those partnerships and expand them, and partner with them, to critically think about the IT environment which you’re trying to create.

Edupuganty: I totally agree. Brian or Chris, any feedback to add?

Carlstead: I’ll defer to you, Brian.

Getting the Most From Existing Applications

Billett: I would say the technologies that are available today are making their way into tax. I mean, there’s a lot of technologies out there to take advantage of, and I get the question all the time about the applicability. I guess the way I look at it is it’s not a question of if, but more a question of when. Many companies are more forward-looking in terms of how they can take advantage of the technology, and even their tax applications. However, I find that a lot of our clients aren’t taking advantage of the available functionality that’s even within their products. So, that’s one of the key things that we like to try to focus on, making sure that clients are getting the most out of their existing applications as well as the adoption of the new technologies that are available.

Edupuganty: I totally agree. And as a professional in industry, one thing I would strongly suggest is one of the best partners that tax can have in addition to IT, in addition to our finance colleagues, is internal audit. They have access to a wealth of information with regard to how controls are set up within the company and how information is flowing and the technologies that we are using. So I suggest that you sit down with your internal audit team and understand how the controls are set up and how information is flowing, because you don’t know what you don’t know. Until you sit down and understand what their knowledge base is and how they get the information, it can only be helpful for us as tax professionals. So, with that, we’re going to go to our next polling question. It relates to how you would describe your tax and IT environment today. Option A is “You’re executing on a tax technology road map”; B is “There is no formal tax technology road map. We mostly react to gaps”; C is “IT drives most of the finance technology objectives or solutions”; and D is “Unsure; not responsible for the technology environment.” As we give the participants a chance to respond to this question, gentlemen, what are your thoughts? What are some of the best practices that you’ve seen from various departments and companies—your clients—that we should know and understand at a high level? Chris?

Carlstead: I think what’s important here is the growing importance of the relationship between IT, finance and tax, and we’ve been through an interesting journey. It is somewhat ironic, given where we are with technology in the tax department, that some of the earliest adopters of what we now call “cloud” was the tax department, because they wanted to be able to have control over their data and be in a position where they could get, if you will, that one source of truth from a tax perspective. That worked for a long time, and we’ll talk a bit more on how technology has changed that, but we now find ourselves in a position where the interoperability of data between departments and the demand that governments are placing on corporations and businesses has gotten to such a level that we no longer can operate in those silos, and we have to connect with our colleagues outside of tax. I think a plan that recognizes this and works collaboratively with finance and IT is really a best practice. I just don’t see how else you could achieve success without this type of collaboration. And again, whether you’re a small business or a large business, it just changes the number of people that you might need to talk to.

Edupuganty: Mike or Brian, what are your thoughts on the polling results here? Or Chris? Any of you? One thought that I have with regard to mostly reacting to gaps—totally understand the position that a lot of companies find themselves in. COVID-19 is definitely hurting us further with regard to getting additional funding or discretionary spend, but we have to be careful, because if the gaps get large enough, they can definitely cause a world of hurt for us to be able to do our jobs effectively. Any additional thoughts?

Bernard: The polling results here seem—I think if you’d asked this question, say, ten years ago, I think what you would have seen is that the dominant answer would have been “no tax technology road map in the tax department.” So, I actually see progression in this poll result, because what it tells me is there’s been a big shift toward technology road maps, which I think were almost nonexistent ten years ago. Brian, I don’t know what your thoughts are around this.

Billett: I’m going to kind of jump ahead a little bit and key off of something that you said, Mike, which is the funding. Because I think there was already a question that came in about budget and funding, and I know we’re going to talk about that a little bit later. But I do want to highlight here because I think this goes kind of hand in hand; I think it’s very important to have a road map, and not just for a couple things. I think a lot of times when we try to fund things as an isolated project or to fill a gap, it’s harder. I think if it’s part of an overall plan and a story, in terms of what you’re doing, I think that’s how it kind of fits into the technology road map. The moral of the story is that actually having a technology road map or vision for several years helps in the funding process to be able to build the business case and be able to explain the story on why it’s needed.

Edupuganty: I totally agree. Chris, what are your thoughts on data and automation?

Carlstead: This is my favorite question of the day, and that’s why I jumped in line to lead it. This is probably the most opportunistic area of where we can really move the ball forward. I think of the tax challenge, in a relatively simple way, given how complex it actually is. I look at literally the transaction. So, your point of sale, your shopping cart, or whatever your business calls for a service or otherwise. Then you track that transaction’s journey through its life cycle. Along that journey, of course you start at the purchase, but before the purchase you may have to consider supplier risk. At the time of purchase you apply tax on that purchase. You then move into tracking that transaction for indirect compliance. You then may consider statutory reporting if you are global and tax provision followed closely by regulatory filings. Later in the year you need to address US income tax or global income tax where it applies. Intermingled along the way you have global trade, transfer pricing, and country-by-country considerations that all require your attention. If we consider this journey and think about technology, we can then start to layer in where technology can help us. Of course, budgets and funding and all those things are really important, but if you consider your own journey you will find areas of opportunity. This will help you focus and prioritize. I agree with Mike’s comment that the polling question we just went through is a fairly optimistic view, because I didn’t necessarily read “We react to gaps” as “We don’t react with technology.” We just may not be in a position to be proactive, but we’re still likely putting technology into those gaps as we need to. I don’t know if we’ll ever be able to get so far ahead that we’re proactively acting on every potential tax legislation or change that’s out there. So, I think that polling question was quite a positive [indicator] of where this particular audience is moving. Then, ultimately, if you think about that in the big [picture] and you now do that at scale, what’s becoming more and more challenging is master data. It’s always been a challenge, so I’m not trying to suggest that’s new. However, as real-time reporting is becoming more prevalent, and concepts like e-invoicing and clearinghouses are spreading—where we’re literally required to get government approval at the time of the transaction—understanding your data and the ability to aggregate and assemble and then disseminate data is as important as ever and as challenging as ever. I do think while that’s hard, similar to A Tale of Two Cities that may be the “worst of times” part of the book; but the best of times really is the fact that we are now in an environment where technology such as APIs [application programming interfaces] are becoming more prevalent and are able to help. For those of you familiar [with this], you likely understand where I’m going with that, and if you’re not, all that means is that applications, like [the ones] the folks on this panel sell to you, are becoming more open and allowing for better access, and then putting you, the customer, and your company in a better position to move that data freely to wherever you need it to go. And that gets into the concepts on this slide-around-like ecosystem and platform, where you’re literally inviting other developers into your platform to allow for a greater, richer ecosystem. The best way to describe how that might look in a tax department is no different than how we all currently enjoy applications we use on our phones and how easily we are able to sign up for new services. And that really is where we’re at—the beginning of a trend in a curve that I see [of] tax departments, and just corporations in general, finding their own journey to that same type of consumer experience. So, it’s exciting. I think the next five years will look so much different than the previous twenty-five that we’ve been through.

Importance of APIs

Edupuganty: Yes. I totally agree with you, Chris, with regard to everything that you’ve said, and especially with regard to the importance of APIs and what they can do for us. A lot of people who have been in the technology world are somewhat familiar with the terms “small automation” and “citizen-led automation,” and there are tools available that don’t cost hundreds of thousands of dollars and allow you to implement better controls around your processes. As you indicated, the major vendors understand this and acknowledge that this is where the world is going. So, how do you become part of the solution that your customers need and are looking for? What I would say is we need to educate our peers, our teams, our management as to the importance of this, because it cannot be understated. For everyone to be able to accomplish the initiatives that they have from a business perspective, tax needs to be right there partnering, but with tight controls around our processes. Let’s move on, just in the interest of time. Brian, what are your thoughts with regard to what we should see between finance and tax?

Billett: Chris gave a good high level in terms of the areas. One thing I would say—we all have APIs, so if people didn’t realize that, all of the vendors have APIs that you can take advantage of. I’m going to put this under the umbrella of data management. When we went through this, it’s the same concepts, but I want to try to make it a little bit more tactical. Like any good consultant, I’m going to talk about a matrix. And an approach for what Chris was laying out, this is kind of like a layer below from a tactical perspective. What I would suggest is to start by developing a tax data matrix to identify and analyze all the sources and uses of all the tax data. So, document all of your data flows from source systems and to common reports, your inputs and your outputs. And if you have that, that framework will let you assess the opportunities to improve both the quality and the movement of data. You can evaluate the inbound and outbound interfaces with all the systems once you’ve done that and evaluate what’s available, and then take kind of a holistic approach. Because, in going through that process, you identify not only financial systems, but also budgeting, consolidation, forecasting, reporting, other business units, and other systems within the organization. And then take it a level below that and identify, define, and document each significant data stream that’s flowing into your provision and compliance processes. And that could be everything from entity data for entity management, trial balances, adjustments, apportionment data—that gives you kind of a lay of the land of what the opportunities are, what the data flows are, and then that lays out a framework where you can evaluate what the interfaces are. When we went through this, I thought, let me make it tangible, and the one that’s kind of a classic example is automating adjustments. A lot of times that can be where the biggest bang for the buck is. I want to talk about that a little bit, because the segue for that is the interrelationship that we’re talking about. One of the biggest advantages is automating adjustments that could be related to book tax, E&P, stat gap, whatever it is, to efficiently move data and be able to map it as you do kind of a walk from one to the other. Automating that data is achievable whenever you have the detail in a source system, and in accounts, that allows you to write the rules to automate what those adjustments and reclasses are. Some other areas of opportunity—you have the typical ones that everybody thinks of around entity data and other areas where there’s kind of set rules on reversals and adjustments. Other areas of significant opportunity are look-throughs on intercompany payments for international calculations, disclosures related to intercompany transactions, and population of elimination entities. There’s a lot of areas to look at once you have that map down. Now, the key that I want to tie into this is working with your colleagues. Obviously, improving the accuracy and efficiency of the data is the key, but if you start with a plan around how you’re managing your tax data, working with your counterparts in finance and those responsible for the source systems, you can uncover significant opportunities to improve tax data management and simplify the task of building and leveraging a tax-sensitized chart of accounts. And even if you can’t get to that source data, they have the knowledge and experience to know what data is available. That framework facilitates the conversation, and you’d be surprised what gets uncovered. Even if it can’t be automated, getting better access to the data that’s needed may still be possible. So, there’s tangential benefits even from that perspective. And so, the moral of the story is to have a framework available, and then engage with finance and the other businesses and the owners of the data.

Edupuganty: I totally agree. Let’s move to our next polling question, and it’s with regard to how does tax obtain funding for its IT environment or its technology landscape. Option one is “Tax must compete in a pooled resource environment against other financed IT projects.” [Then] “IT controls the budget, so most of tax’s implemented solutions are prioritized by IT.” [The third option is] “In most cases, tax can obtain funding from business groups where larger projects are being deployed.” And the fourth option is “Not really sure. Seems like a mystery most of the time.” Gentlemen, what are your thoughts with regard to the best ways of obtaining funding for what we need? One of the comments/feedback that came in is “Because of COVID-19, discretionary spend is now at risk or has been cut.” If that’s the case, how do we go about ensuring we get what we need?

Bernard: I could add a few thoughts here. One thing that I’ve kind of always said, and that I experienced as well in corporate life, was if the conversation that I was having with someone about whether I was going to get funding for something is solely centered around a quantitative analysis about lower audits or saving money, then I knew I was in the wrong conversation, because obviously I didn’t have what I think is the more important, or equally important, conversation, and that’s the qualitative aspect of it. And one thing that we’ve tried to emphasize to our customers, and they have found this very helpful, is that you have to tie your tax IT environment to the overall corporate and finance governance goals. In other words, de-risking. I think Chris said it very well about automation, and Brian just got done saying it about tying it into finance. I think those are key components of the discussion. You really have to center on that governance model and the qualitative and the quantitative aspects of it as well, and hopefully write a very compelling business case that supports what you want to do. So, those would be some of my thoughts for some of the companies on the phone.

Carlstead: The only thing I’d add is how we define [how] tax risk has changed. In the past, tax always struggled with getting budget because of, depending on your perspective, a misaligned belief system or an underlying point of view that it didn’t really matter if you get tax right because you could always get a refund or pay the tax and a penalty at a later date. Often the tax, penalty, and interest didn’t really rise to the cost of what it might cost to actually address—and proactively address—the risk. And while that dynamic still exists, I think what’s changing is that governments, through their regulations, are getting far more aggressive in focusing on the business itself and preventing it from actually conducting business without compliance. Such as the Wayfair ruling around sales tax in the United States, the adoption of SAF-T/SII, or even real-time clearinghouses where you can’t even conduct business in a jurisdiction if you’re not able to comply with their taxing authorities’ regulations. So, with all that, I think that the time has shifted where it’s no longer just something you can make up on the back end, simply [because] if you don’t address these challenges on the front end, you are unable to conduct business in a growing number of jurisdictions.

Obtaining Funding

Edupuganty: I totally agree. So, having said that, Brian, how does one go about obtaining funding?

Billett: So, obviously recognizing the comment that already came in, Sandhya, that you just mentioned is the increasing challenge in the current environment with COVID with budgets and business and everything. I think here’s a tie-in from the road map that we talked about, so I just want to mention a couple things, because I know we have another topic to cover as well. I think Mike wanted to comment on this first bullet point, so I want to leave a minute there as well. One of the big ones we talked about is knowing what other projects are going on, tax being connected in the organization in terms of other IT projects and finance initiatives. This is a really big one, because to the extent that you can be involved in those and have a seat at the table, it’s an opportunity. Because a lot of times, those are larger-budget projects as well, and hopefully tax can participate in those. Obviously, the business benefits and the opportunities from a technology perspective would make that an extension of the tax road map. I also have a little bit of maybe a Pollyanna perspective; like [in] Field of Dreams, there’s a certain aspect that you have to be able to appreciate the benefit of technology and recognize the opportunity and then figure it out. Obviously it still has to make business sense. I find sometimes that doesn’t exist, and that’s a real uphill battle. That’s a challenge, but I think that also ties into demonstrated successes. So, I’m going to let Mike talk for a minute on that, because I know the successes part of it was a big thing that we talked about when we were working on this.

Bernard: Thanks, Brian. To the first bullet point on the hierarchy of funding, we’ve touched on it a bit, but I think if you think about all of these tax/IT projects, they are subject to three things—scope, time, and funding. In order to be successful, to get your first project going or multiple projects going after that, you absolutely have to deliver on those three attributes. And to the extent that you have a reputation for doing that with your partners and your professional service providers, then you really build street credibility within your organization. In terms of the hierarchy, the key thing is you’re going to have milestones and check-ins, because that is how IT projects are managed and delivered. Again, going back that there’s an IT phase to all these things, and as long as you’re hitting the scope right, you’re hitting the timing right, and the budgets are online and you deliver that, then that’s really how you’re going to be measured along the way. To the extent that that gets disoriented in any way, people ask for more scope, [and] sometimes you have to say no. You must be dogmatic on timing, and you must bring it in on budget. All those things are necessary because all these things are reviewed quarterly; it’s a disciplined IT approach. And whether your project is going green, red, or yellow is very important along the way.

Edupuganty: I totally agree, and, you know, really what I would say is a lot of times you should start small, because when you start small and you have a success, that adds fuel to the energy level of yourself and the team, and so you build on it. But then you have to be methodical about how you go about getting to the end result that you want, and that can take a couple of years. So, given that we have about five minutes left, I do want to get to at least one more of the polling questions to satisfy CPE requirements. What is the composition of your tax department personnel: “Tax must share technology resources with other finance groups”; “tax technology support is generally outsourced to a third party”; or “tax has its own technologists who reside in and report up through the tax department”? So, while we are waiting for the polling results to come in, Mike, I would ask that you skip forward in the interest of time and speak to some of the points of view that we have on how we address the need for personnel.

Bernard: Sure. I think maybe I’ll just start with the one question that I always get: “Do I take someone who’s a tax person and turn them into an IT person, or do I take an IT person and turn them into a knowledgeable tax person?” I think the most important thing that individual must possess is aptitude. I would say generally you want to find someone who is an IT person who has a great aptitude for finance, business, and tax. If they have that interest and aptitude, you can also teach them accounting, you can teach them tax, you can teach them legal structures. And the great thing about it is once they learn all those things, they can solution in a very global way. That would be my main point around talent, how I would look at it.

Edupuganty: What are your thoughts on these polling results, everyone? I would say that I’m impressed that twenty-six percent have technologists within the tax department. What I would add is, you know, when you have attrition, look at repurposing a position. There’s no need to fill the position in exactly the same way it was done before. I think the skill set that we see of people coming in is quite different, and we need to appreciate and acknowledge that, and also do what works for our company, but always have an open mind to change. Any other thoughts on the results? Or we’ll go to this next slide, and we can speak to it some more with regard to personnel.

Carlstead: In the interest of time, I’ll be brief on this one. I think we’ve got analogies all around ourselves in life and in business, and where we are now. Many years ago, when I was growing up and Excel was becoming our best friend in the tax department, we had no choice but to learn the tricks of the trade. Today is no different. We just need to bring in resources that know the new technologies to help bring along the tax department by sharing knowledge and making it more ubiquitous. We have been through this before; it’s just a different flavor of the same thing.

Edupuganty: Thank you, Chris. We are going to skip the last polling question, although I would suggest that the last response on the fifth polling question is quite interesting and where we should be right now, but having said that, I’m going to call each of you out, and in a couple of seconds, please share your thoughts on where we are at with regard to tax technology and where we need to be. Chris, would you like to go first?

Carlstead: Yeah, I’ll again be brief. First of all, thank you to everyone for paying attention and listening to us for the last hour. And I’d close with there’s no time like the present to engage in what’s going on in your company or your business with respect to technology, whether that’s in your IT department or otherwise, and find the best way to lean into that movement and that motion, because we as applications and vendors are making best efforts to get the data in your hands, and there’s a lot of power in today’s technology and by extension what is possible.

Billett: First, I’d like to thank TEI and Sandhya for moderating, and my colleagues on the panel. This was an enjoyable session. Chris kind of jumped over one there—he went straight to Excel and didn’t mention Lotus 1-2-3. [Laughter.] So, for some of us that was even a precursor. I guess my point there is in terms of the technology continually advancing. From my perspective, the key topic we talked about is the importance of the data and the data flow and data management is going to continue. The increasing needs around compliance and reporting, that’s not going to go away. Really, I was trying to think of how to put this: I’ve been around almost thirty years in the industry, and I’ve never seen tax simplification. So, I have no reason to believe that anything that happens in the near term is going to simplify tax, and I think the best way to combat it is improved processes and technology.

Edupuganty: Totally agree. Mike, what do you think?

Bernard: Again, thanks to everybody for being on the call today. One of the things that the professional service providers have done quite well over the past five years is [make] tremendous investments in technology. I want to draft off a little bit what Brian just said. Things won’t get simpler, but I think the good thing is, as Chris pointed out before, data is going to be in the middle of the tax department. A number of the solutions that are built today are componentized, or modularized, so they are much nimbler than the older legacy systems which were built just five or seven years ago. Younger professionals are very comfortable working in an “app environment,” and the direction is to build smaller tools that can access data and meet the tax department’s discrete needs. So, really, the best technology is yet to come, and we are just on the frontier of all of this great software and hardware computing power which is currently being and will be unlocked for many years to come. It’s the golden age of tax and technology.

Edupuganty: Thank you. As indicated here, each of our contact information is provided. So, please do feel free to reach out to us with other questions. We have been monitoring your questions but haven’t been able to address them specifically. For future virtual media sessions, you can check out the upcoming sessions link in the Resources widget or alternately you can go to the Events and Education tab at www.tei.org to learn about more events to come. I want to thank my panelists. This has been very enjoyable and very informative. So, thank you for taking the time to do this. A special thank-you to the Thomson Reuters team for hosting this—they’ve been very helpful and great. All I can say to my peers and friends out there: stay safe, stay healthy, and stay focused. The complexity and rapid change in tax law doesn’t allow for quick simplification and/or a steady state. Regardless, we should make change where possible and persevere. Thank you, everybody.

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