IT Trends are Reshaping Tax Automation Investment Plans

A communications and collaboration gap exists between tax and IT groups in some businesses. This divide is a bit surprising given that both groups are involved with many of the key financial activities that occur each day throughout the organization.

Nearly every transaction a company executes has tax implications, whether it be buying things, selling things, using things or moving things. Also, business developments such as geographic expansions, new product launches, supply chain adjustments, and other strategic initiatives bring tax ramifications with them that should be understood and planned for in advance. Furthermore, nearly every process a company executes relies on supporting technology systems and tools. As companies become more data-driven, the value of the analytical applications and artificial intelligence (AI) tools that IT deploys increases.

A recognition of this common ground marks a good starting point for better tax-IT collaborations. It’s also helpful for tax and IT leaders to understand where their counterparts are coming from today based on the pressures they operate under, the challenges they need to address, and the shifting priorities they manage.

On that count, the McKinsey Global Tech Agenda 2026, which analyzes current IT trends and priorities, is helpful. As tax leaders strive to communicate more effectively with their IT colleagues, regarding tax automation investments and other matters, they should keep the following IT developments in mind:

IT Development: More CIOs have a seat at the strategy-making table 
According to McKinsey’s survey research, based on responses from 632 global C-level executives and IT professionals across most industries, roughly two-thirds of CIOs in top-performing companies are highly involved in developing corporate strategy. “Top-performing” organizations are those that have posted an average growth rate of at least 10% in both revenue and earnings before interest and taxes (EBIT) during the past three years. 
Tax implication: Consider a broader tax technology business case 
As IT’s role continues to expand beyond core operations, more IT leaders are actively shaping business outcomes. This suggests that tax leaders would be well-served by creating tax-automation business cases that connect the investment to enterprise-wide outcomes, such as reduced compliance risk, more agile operations, enhanced cash-flow, and faster decision-making. Try framing tax automation as both a strategic capability and a competitive advantage that supports the broader data-driven organizations that CIOs are committed to building. 

IT development: AI is the top investment priority 
AI has surpassed cybersecurity and infrastructure modernization as the top technology investment priority for the next two years. This insight tracks with what Vertex sees occurring inside IT groups. To paraphrase my colleague, Chris Zangrilli, Vertex’s Vice President of Technology Strategy, IT leaders are focusing on establishing centralized governance for AI deployment, modernizing to support AI at scale, and defining measurable success metrics tied to operational impact, among other AI-related priorities.  
Tax implication: Call out the AI tools and features within tax automation solutions 
Vertex now incorporates intelligent automation and other AI capabilities into its tax automation platforms. Rather than simply asking IT to fund a new tax solution, tax leaders should consider discussing with IT how a tax technology investment would help extend the organization’s IT strategy to the tax group. 

IT development: Speed is emerging as the preferred IT success measure 
IT leaders are less focused on performance metrics related to efficiency and cost-reduction and more focused on measures of business velocity and agility because these indicators correlate with creating and sustaining competitive advantage.  
Tax implication: Highlight how tax automation supports organizational agility 
Cost savings remain an important component of tax technology business cases; however, tax leaders should also consider identifying how a new technology investment reduces the time required to respond to regulatory changes, satisfy tax compliance requirements in a new tax jurisdiction, or contribute to a faster, more effective post-merger integration process.  

The McKinsey report also describes a noteworthy change in how IT groups interact with the rest of the business. Rather than relying on traditional annual budgeting cycles, more IT teams develop and iterate technology investment strategies throughout the year, often in close coordination with business and functional groups. This opens the door for tax leaders to schedule regular check-ins with IT throughout the year to keep informed of the evolving technology strategy.