In my previous post, I described the growing need for tax functions to take a cue from CIOs in order to effectively plan for a digital future. To use the research firm Gartner’s language, this approach requires addressing the “safe and steady” demands of system or record IT as well as operating in a “faster, more agile, nonlinear mode” for systems of differentiation. Other research on the IT function’s current evolution supports and builds upon the need for IT to enable a data-driven culture and strengthening its strategic contributions to the organization.
Although most of this research currently focuses on the IT function, my sense is that it could just as easily apply to tax functions. Cultivating a data-driven tax culture while enhancing the tax function’s strategic contributions sounds ambitious – and it should. It’s not possible in most companies, unless the tax function takes advantage of automation and outsourcing to free up time and talent to expand its strategic contributions.
Insights from The Wall Street Journal’s recent CIO Network conference examine CIOs’ top priorities in the coming year. Many of these objectives will help IT executives to further develop their functions to become faster and more agile. The following CIO priorities -- which appear in the Journal and describe specific recommendations members of the CIO Network identified -- are helpful to be aware of (and, perhaps, to adapt):
- Build a data-driven culture: Create data culture at all levels of the business. Create data strategy that can be driven back into business units. Have data that is easily accessible and consumable.
- Know your users deeply: Now more than ever, CIOs must have a deep understanding of their users and customers so they can help pinpoint, frame and prioritize the problems, propose the most relevant potential solutions, and foster dialogue across the organization.
- Facilitate innovation: Facilitate and lead business transformation through the use of disruptive technology to anticipate business needs and drive growth.
This special report makes clear that the growing reliance on data and cloud computing are transforming the IT function and organizations as a whole. IT and CIOs appear intent on treating this transformation as an opportunity: They want to spend less time on tactical data-collection and systems maintenance work so that they can invest more time in helping their organizations become more agile and strategic. Having your tax professionals’ work directly with IT also has the potential to balance the ongoing needs for efficiency and growth, while supporting more strategic work on the tax side.
Similar transformational opportunities exist on the not-too-distant horizon for tax executives, but a collaborative approach and a shared understanding between the tax and IT folks will be required to achieve a data-driven culture throughout the entire enterprise.
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.