Deloitte’s CFO Insights series regularly highlights useful ideas for CFOs and finance functions; some of these insights can help tax leaders and their teams as well. I was intrigued by the title of a November article: “Are you ready to make the switch to Lights Out Finance?” (You can download a copy here.)
Deloitte defines Lights Out Finance as the autonomous delivery of finance services with little or no human intervention, using end-to-end technologies such as artificial intelligence, robotic process automation (RPA) and advanced analytics. In this fully digital scenario, the CFO, whose role is often described as one of keeping the lights on, “now assumes responsibility for building a strategy for flipping the lights off – then figuratively walking away to focus on more forward-looking issues.”
This conceptual shift from automation to autonomy is one that tax leaders might want to give some thought to, especially given their partnership with the CFO. It may also shed new light on strategies for improving the tax department’s approach to investing and optimizing tax automation.
The enabling technologies that Deloitte highlights are familiar to tax professionals, though perhaps we may have underestimated their potential for game-changing advances beyond traditional automation. For example, systems that automate invoice processing end-to-end may produce cost and time savings but they can’t think for themselves. That’s because they depend on rules, templates and databases. AI, in contrast, has the ability to make decisions and act without human supervision. What’s more, the data storage solutions needed for these technologies are becoming increasingly affordable, enabling companies to make better predictions at a lower cost.
This CFO Insights report lists the questions that Deloitte used for its poll. These queries also provide food for thought for tax leaders:
- What steps, if any, has your organization taken in the last year to alter, reduce, or streamline operations? Just over one quarter of Deloitte’s respondents said they’ve improved or standardized processes, and one-fifth have fully implemented RPA/automation.
- What is the #1 benefit you hope to achieve by going Lights Out? The top choices here were: freeing up talent to focus on more strategic activities (25%) and improved analytics and access to data (19%).
- What aspects of your Lights Out journey would you prioritize today? Standardizing and automating processes was the top pick, chosen by one-third of the sample.
- What do you believe your largest challenge is to “going Lights Out?” Nearly one-fifth of respondents cited a “complex and siloed technology landscape.”
Tax leaders can help advance the tax transformation journey by asking – and answering -- similar questions regarding their own effort’s benefits, priorities and challenges.
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. The views and opinions expressed in Tax Matters are those of the authors and do not necessarily reflect the official policy, position, or opinion of Vertex Inc.