How to Unite Your IT and Tax Departments

Close collaboration between information technology (IT) and tax departments is an essential ingredient for organisational competitiveness and agility. As tax requirements increase in number and regularity, working together and taking advantage of innovative technologies can streamline operations, resulting in increased efficiency and compliance.

In this blog, Andrew Burman, Principal, Transformation and Automation, at Ryan, addresses common questions raised by our clients seeking to enhance collaboration between IT and tax.

How Can IT and Tax Departments Collaborate Effectively?

Bridging the gap between IT and tax functions is a significant challenge for many organisations, often leaving them unsure of where to begin. Having a skilled and unbiased mediator who can translate between the two disciplines is crucial.

This mediator, fluent in both IT and tax languages, plays a key role in facilitating two-way communication and understanding between the teams. They can help translate tax’s needs into terms that are understandable to IT and help translate how existing IT systems may be able to meet tax’s requirements in language that tax can understand. This enables an iterative discussion to find the “path of least resistance” for tax to achieve its aims using what the business already has, as far as possible, rather than one side setting out demands and the other limitations, which doesn’t enable such an open discussion to develop.

Flexibility from both sides is crucial as discussions evolve. It’s imperative for the tax team to communicate with a unified voice, ensuring clarity and consistency in their requests. Additionally, being open to successful alternative approaches fosters collaborative problem-solving. There are always multiple ways for tax to achieve its aims, so an open conversation is key to success.

Simply opening lines of communication, asking questions, and gaining insight into each other's perspectives, projects, and solutions lays the foundation for a strong and collaborative working relationship rather than a “them versus us” approach. While tax may require initial guidance, initiating dialogue remains the most effective way to cultivate a culture of collaboration and mutual understanding, which will benefit both teams and the entire organisation in the long term.

How Should Tax Begin Discussions With IT?

Understanding the array of systems that the company currently uses is an important starting point. This provides a basis of the “ecosystem” or “toybox” within which tax can play in the short term and ensures timely identification of upcoming changes, updates/upgrades, and new implementations that tax may need to consider as important data sources or opportunities to request “once-in-a-lifetime” step changes in the quality, consistency, and regularity of data it is able to access.

In addition, understanding IT’s operating model with other teams, notably tax, is vital. This includes how IT would need to work alongside any team seeking to use or introduce technologies, as well as post-automation and how the technologies (and anything built using them) will be maintained, updated, and managed. In cases where tax proposes integrating new software such as Alteryx or robotic process automation (RPA) tools, what gateposts and internal procedures are in place, does the organisation have any in-house resources, and what does the path through development, testing, and deployment look like?

Furthermore, recognising that larger enterprises often maintain in-house transformation teams overseeing operational changes across departments like finance and treasury (and others with whom tax interacts) is crucial. Moreover, shared service centres or centres of excellence (together with any outsourcing providers) may possess their own tax resources and have requirements that benefit, complement, or are dependent on tax. Consequently, initial discussions should engage a diverse array of stakeholders beyond IT alone, and it is not unusual for additional stakeholders to be unearthed as initial discussions progress. Involving these stakeholders in similarly open discussions allows tax to explore a spectrum of possibilities fully, ensuring that tax is complementing and playing an active part in wider business change. Leveraging existing business resources and practices enables tax to position itself advantageously, seizing opportunities and achieving goals effectively for the broader benefit of the organisation in the short term and building flexibility for the future.

Is It Necessary to Resolve Data Quality Issues Before Taking Further Action?

Many clients encounter challenges with incomplete, inconsistent, or labour-intensive data tasks, and their first thoughts are that these need to be “fixed” before any automation or transformation can be truly valuable. However, data issues such as these are prime candidates for automation, which streamlines processes, saves significant time (often at critical points in compliance and reporting cycles), reduces risks inherent in poor data, and provides a basis for a clear, consistent “ask” from tax when new systems or upgrades present an opportunity for change requests.

Previously laborious tasks, including those taking up to four weeks each quarter, have been proven to be delivered in fewer than five minutes once automated. This shift enables tax to move from historically annual processes to more frequent runs throughout the year, building a more proactive function and enabling tax to meet an increasing set of “real-time” and “near-time” requirements. This involves continuous data blending, testing, and cleaning, calculating and journalling back common adjustments into source systems, and revalidating reports, along with identification of new or unusual data (both master and transactional) across source systems, to create a “single version of the truth.” Embracing real-time approaches helps clients avoid traditional bottlenecks and empowers tax operations to function dynamically and proactively. This efficiency frees up valuable time during critical reporting and compliance cycles, allowing for (and enabling) deeper, intuitive data analysis, enhanced business partnerships, robust risk management, and value for the business.

Which Technology Should Be Used?

When deciding on technology solutions, there is no one-size-fits-all. Initiating open internal dialogues with the IT department and other stakeholders is an essential first step, and starting them in the right way is key. From this initial step, unravelling the technological landscape, identifying forthcoming changes, and exploiting the potential of existing licenses can, with careful guidance, result in the identification of a range of options and the selection of the optimal one for each business to the satisfaction of all stakeholders.

Common issues and opportunities often emerge, both across tax and between tax, IT, and other teams. This helps facilitate the identification of potential “quick wins” and potential longer-term opportunities. This can help tax define its own roadmap to success and ensure it is complementing other teams and priorities for the greater good (and sometimes achieving its aims via access to other existing budgets).

To help stimulate and evolve the discussion, drawing inspiration from success stories of others who have reaped significant benefits from automation is invaluable, as well as testing whether these might work in your organisation and, if so, how (or why not). Sharing ideas that have proven effective elsewhere fosters productive and open brainstorming sessions with IT. This culminates in better-informed decisions tailored to individual and business needs and in decisions that a broader range of stakeholders across the business can support, which leads to stronger cases, the potential for swifter implementations, and the opportunity for tax to be a “poster child” across the organisation for change.

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