Transformation is a journey, not a destination …
Part I of this article examined what tax transformation (TX) is not! It concluded:
TaxTech + Automation ≠> TX
Written out, that reads, the continuous deployment of technology for business process automation does not lead to transformation – at least not in a meaningful or timely way.
Yet, on occasions, hopeful marketers are tempted to invoke the nirvana of transformation – that is, where all problems are seamlessly solved digitally – as an outcome of acquiring their software. TX does not say they’re wrong – it just says that’s not the whole story!
There’s no doubt technology is powerful and full of promise for tax. However, harnessing that power requires a specific context that is different and unconventional. Conversely, tax tech remains problematic, high risk, and puzzling without the proper context.
Recalibrating For the Taxes of Tomorrow
TX is essential to understanding that context switch and how to make it happen. It consists of two main parts and three critical components besides technology. The parts are:
- The Vision – a specialist understanding of how digitalization works and adds business value
- The Journey – a rearchitected approach to realizing that Vision over time and with purpose.
The additional components are:
- People – on the basis that if the people are not ‘right’, nothing works well enough with tech
- Data – that is, ‘get tax data right first time at source‘ as the answer to tax authority digitalization
- New ways of working – for better tech adoption against a backdrop of constant change.
In other words, “people, process, technology & ‘data'” where these four recalibrated components give managers control over technology-driven tax, ensure fully automated direct flows of accurate data to tax authorities, and put tax at the forefront of business transformation!
Again, in summary, this might look like (apologies to those who don’t like equations):
Vision + Strategy + Skills + ∑ (Innovation Efforts / Time) => TX
… or, Vision plus Strategy plus Skills plus the sum of Innovation Efforts over Time will lead to Tax Transformation. Of course, innovation usually involves technology, and the outcome – a transformed state – is not a destination but a way of being at the end of a journey!
These distinctions may look subtle, but they separate TX success from failure.
Until next time …