Three hacks that help long-haul tax transformation

During recent Vertex user group sessions, it’s been fascinating to see an increase newly hired, or newly promoted, tax professionals who previously worked in other business functions and groups. While these tax group “rookies” have steep learning curves, they bring with them valuable skills and extremely tax-relevant knowledge about the organization and their previous domains (e.g., finance and accounting, sales and marketing, internal audit and so on). 

Fresh ideas from sources beyond the tax profession can also help tax leaders and managers look at tax transformation in a new light. That’s certainly the case with a recent McKinsey podcast that examines how organizations make enterprise-wide digital transformations “stick” over the long haul. The conversation features insights from Roman Regelman, former senior EVP and global head of securities services and digital at BNY Mellon (here’s the transcript).  

The discussion contains plenty of interesting ideas that tax leaders can take and run with. Here are three insights related to long-term transformation success that really jumped out at me: 

1. Forget the finish line: Transformation is an ongoing and evolving journey. Embracing innovation and new methods of working eventually becomes second nature within organizations and business groups that embrace this perspective. Tax leaders, operating as they do in a world where specific endpoints are just not available, will be sympathetic to this perspective. Tax compliance obligations are constantly shifting and expanding. The pace of change in the business is always accelerating, generating expectations for greater speed and efficiency in tax processing and audits, as well as operational challenges in navigating new markets and enabling the growth of e-commerce. 
2. Digital is the oxygen of transformation. Digital strategy is key to the success of transformation, which typically includes objectives related to “revenue, cost, better client experience, better employee experience, less risk, fewer manual processes, less opportunity for error” and more, Regelman points out. Tax leaders may want to consider how they can contribute to holistic transformation by integrating and simplifying systems, especially ERP solutions, and automating processes that are often still performed manually. A tax engine that integrates fully with ERP delivers on the transformational goals of minimizing liability and ensuring compliance while providing ease of use to end users. 
3. Winning hearts and minds is essential: A bold, aspirational transformation can inspire people with a feeling of ownership and decision-making authority as well as financial recognition for their contributions. It’s wise to aim for small early wins and use those results to pull the rest of the organization along. 

Tax transformation is difficult work. It’s not easy to navigate new markets and their tax requirements while keeping up with sales and use taxes. That said, there’s no reason why transformation shouldn’t also be engaging and even enjoyable at times, according to Regelman: “I believe in metrics and that employee satisfaction needs to be measurable, just like cost and revenue and customer satisfaction. But it also needs to be something that brings people to work and which people can rally around.”