By now, there can’t be many companies or corporate departments that haven’t investigated the benefits of cloud computing for at least part of their infrastructure needs. Cloud adoption rates continue to rise, for a variety of convincing reasons. In addition to reducing the total cost of ownership of IT resources, the cloud can help businesses scale their use of infrastructure as needed, accelerate development of new apps and services, and free up staffers from time-guzzling manual tasks so they can take on more creative work.
Tax departments are well positioned to realise most of those benefits, yet tax has been a relatively slow adopter of cloud technology. And that may not be a bad thing, as Jen Kurtz, Vertex chief technology officer, points out in a new white paper, Cloud for Everyone – Including the Tax Function: “Many tax departments are now ideally positioned to consider and apply several hard-earned cloud-adoption lessons that their counterparts in sales and marketing, finance and accounting and human resources have experienced in the past 18 to 24 months.”
The white paper unpacks some of those lessons. Jen focuses on the issues tax leaders should keep in mind as they work with their IT counterparts to select and manage software-as-a-service (SaaS) vendors, including:
- Data security: Cybersecurity is, of course, a paramount priority for tax data, as for any other sensitive or finance-related information. Vendors’ security standards and capabilities have improved and cloud users’ security concerns have decreased in recent years. Data security considerations “should not prevent organisations from considering a cloud-based solution, as strong security features have become table stakes for cloud and SaaS solutions,” Jen writes.
- Application integration: While the cloud streamlines delivery of IT resources, it doesn’t eliminate the need to integrate those resources with enterprise resource planning (ERP) and other legacy systems. Tax executives requesting cloud solutions should be aware of this need to ensure that data moves smoothly among a growing number of business applications.
- Governance issues: Measuring and managing the relationship with the SaaS provider are critical activities for determining ROI, but they’re commonly overlooked, Jen notes. That may be due to the “misconception that the technology’s performance does not need to be actively managed when it is located off-site.”
The key is to work closely with IT. Tax directors looking for ways to foster that collaboration will find more tips in this report.
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.