Lately, we’ve been hearing a lot about cloud computing and technology transformation. A recent SAP conference I attended gave me the sense that genuine transformation is beginning to impact at the very core of companies. These changes will also have significant implications on tax functions.
This impact was evident at SAP’s “Financials 2014” conference in Orlando. The event focused on SAP’s technology and, more specifically, the migration of the company’s solutions to SAP’s new HANA platform and the cloud. However, a larger theme regarding technology transformation also was apparent in many of the presentations and offline discussions. There is a clear sense that we’re entering into a new era of information technology (IT) in which cloud platforms and applications will permeate the core operations of the enterprise.
Cloud-based systems are no longer relegated to the sales and marketing functions. Software giants like SAP are driving major changes to the central IT architectures that run ERP systems. These changes will affect the tax function, in part by driving it toward greater transformational opportunities of its own.
Technology transformation, by itself, is neither good nor bad; its value depends on what companies use the technology changes to accomplish. For tax functions, the potential value resides in leveraging new forms of tax technology to perform more analysis that ultimately helps a company from a strategic perspective.
The CIO and CFO are at the forefront of the transformation occurring at the core of the company’s technology environment. Progressive CIOs are looking at the cloud as a way to enable faster responses to rapidly changing business needs. These IT executives view cloud technology as a way to stretch IT resources and increase overall organizational agility. I know that many tax executives have a similar desire to stretch their own resources while enhancing the tax function’s role in helping the company become more agile.
Based on the discussions at the SAP conference, it is clear that technology transformation is coming to every part of the enterprise. Tax executives who want access to harness this transformation in their own domains will want to work closely with their CIOs and CFOs.
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.