According to my colleague John Viglione, robotic process automation (RPA) is coming to tax departments near you. Although this development may conjure images of giant androids lumbering around your office, the reality is more ordinary, yet still pretty intriguing.
RPA is nothing to do with walking, talking bots or standalone appliances – it’s software, but software that can automate routine tasks. Remember when computers could only do basically one thing at a time? The development of the ability to emulate humans by “multi-tasking” was a very big deal, but computers’ ability to complete many tasks still depends largely on help from humans. For example, people must spend time extracting data from complex documents, copying and pasting text, filling in forms and uploading data from one app to another.
RPA enables IT systems to talk to each other directly, bypassing these manual processes. According to the Institute for Robotic Process and Artificial Intelligence, the technology enables users to “configure computer software or a ‘robot’ to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems.”
Not surprisingly, the technology is attracting interest from the business process outsourcing (BPO) industry. A 2016 Everest Group report looked at RPA in healthcare payer BPO firms and found it can drive cost reductions ranging from 15 percent for offshore operations to an impressive 47 percent for onshore operations.
Corporate shared services functions will likely be next. The Wall Street Journal recently reported a major business credit bureau is testing RPA for potential applications in the finance function. It’s not hard to see how RPA could benefit the tax function. A Deloitte article in the Wall Street Journal’s CFO Journal describes some benefits of RPA that could potentially apply to tax: “Once the infrastructure is in place it takes two to four weeks to automate a process, potentially offering short payback periods in comparison with other technology implementations. It can improve staff engagement by removing routine, boring work and, perhaps more crucially, it is a tool that global business services can implement and expand rather than having to rely on the IT function.”
Tax leaders should get ready to welcome the robots and put them to work on eliminating workarounds, automating routine processes and reducing errors. To learn more about RPA, read John’s article, “Harnessing the Strategic Potential of Tax Data with Machine Learning” in FEI.
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.