Do you have a long-term strategy for data and tech?

Change is the only constant in life. Right now, change is coming thick and fast: automation, big data, and AI, not to mention the profound impact of the pandemic on the way we live, work, and pay taxes.

According to a recent article in the International Tax Review the time is ripe to have a full review of the tax (and broader finance) function. Futureproofing, managing skills shortages, coping with post-pandemic tax changes – they all need to be thrown into the mix.

The way forward is likely to involve more tech, greater flexibility and a shrewd approach to which functions are kept in-house and which are co-sourced externally. What will work for your firm, and what does this mean for recruitment?

Data and tech are a blind spot in corporate strategy.

In a recent study of large companies, two thirds (67%) said a lack of a long-term strategy for data and technology was the main barrier to achieving their vision of a more integrated tax and finance function.

Why is this? Well, tech functionality is changing everything. It used to be that companies thought of balancing tech and talent, allocating investment almost as if they were separate categories. Now the picture has changed: talent is scarce, tech is integral to everything.

Greater adoption of technology enables companies to be more flexible, with advanced analytics and reporting allowing rapid response to changes in tax rules. This allows risk, cost, and value to be addressed in a unified way, rather than being seen as separate elements to be balanced.

What greater use of tech means for in-house skills?

Adoption of new technology requires expertise, and this is in short supply. Businesses are upskilling existing staff to make up the shortfall, but professionals with the right combination of skills are a valuable and rare commodity. A team should ideally combine tax knowledge with tech insight as well as an entrepreneurial, problem-solving mindset.

Attracting skilled individuals – and keeping them – is a challenge. To build and retain a strong team you need to be able to offer rewarding work which in turn influences choices about which functions should be retained in-house and which can be co-sourced with external partners.

It’s time to review and plan for the future.

These are challenging, disruptive times. Companies need to identify, interpret, and act on legislative and regulatory change, while also facing pressure to cut costs. Post-pandemic, governments will/have increased taxes as well as requirements for filing and reporting, all of which require adaptation and adjustment.

Firms should be reviewing how their finance operations are structured, including tax, to ensure they can deal with these additional burdens. The focus should be on long-term value, not just the needs of today. That means that in addition to thinking about effectiveness and efficiency, firms need to have an eye on environmental, social and governance (ESG) metrics: accountability and responsibility.

For most companies, smart decision-making will mean that higher risk, higher value processes remain in-house and less critical functions will be conducted with external partners. It’s always going to be a matter of weighing costs against outcomes, but right now we shouldn’t let short-term disruptive challenges distract us from the bigger picture of a sector governed by analytics and big data where flexibility is all-important.

Is your function structured correct and in a way that will meet the demands of the continually evolving tax landscape? Contact Sal Partners for further insight and information on how best to approach.

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