As I’ve written previously, CIOs and other IT leaders are making progress on their journey toward a scenario where IT plays a central role in driving business strategy. Time-to-value (TtV) is a concept that is of interest to tax professionals who are progressing on their own journey to advance the role that tax plays in their companies, and marks an important milestone on this evolutionary path.
TtV is a measure of the time it takes for the value of an investment to be realised. Within the realm of IT, TtV needs and expectations have changed dramatically in recent years. Not long ago, it was perfectly acceptable for an IT project, such as a software implementation, to take 12-18 months to deliver value. Today, 18 months doesn’t cut it for a couple of reasons.
First, most companies, in their effort to become more agile, are chomping at the bit to generate a return on investment (ROI) as quickly as possible. Second, marketplace conditions and companies themselves are changing quickly and more frequently than ever before. As a result, business technology needs also change more quickly. By the time an 18-month IT project concludes, that “new” technology is not so new... and it may no longer be as valuable in terms of the current business strategy.
Fortunately, technology is also progressing. And one of the most well-known recent technological advances – cloud services and related technology – can greatly reduce TtV.
At Vertex, we’ve enjoyed experiencing this benefit. By leveraging Software-as-a-Service (SaaS) and on-demand solutions, we’ve reduced our delivery time on the implementation of certain applications from 14 months to four months. This reduction occurred because these solutions allow us to leverage an external vendor’s infrastructure (which reduces installation and configuration time) while using our existing, tried-and-true implementation methodology.
I firmly believe that tax and IT can help each other transform in mutually beneficial ways that ultimately benefit the company and its stakeholders. One way to do so right now is by focusing on TtV and the benefits of cloud technology when considering new technology investments, including those that support tax.
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.