For companies that host both financial and operational functions in the cloud, the bar has been raised regarding flexibility, scalability, and financial simplicity in provisioning IT. It’s now mainstream for businesses to house at least part – and often a large chunk – of their IT environment in the cloud. While the returns on these investments vary, companies that excel at cloud transformation see hefty gains across several dimensions, including improved decision-making, heightened productivity, and increased agility, according to PwC’s 2023 Cloud Business Survey.
At the same time, many companies remain hesitant to migrate some systems to the cloud, especially those supporting workloads that include sensitive financial and customer-related data. If your organization is unsure about migrating tax solutions to the cloud, you might want to check out the resource, Cloud for Everyone – Including the Tax Function.
Most tax departments have not been early adopters of Software-as-a-Service (SaaS), but they are well-positioned to be smart adopters of cloud-based tax technology, benefiting from the practical insights and experiences gained from earlier cloud projects.
The report examines several considerations that will likely be top-of-mind for tax leaders. These priorities include:
- Data security. Cyberattacks and data breaches have pushed security to the top of senior executives’ and board members’ priority lists. But offsetting these concerns is the ongoing progress in professional and industry standards (including standards related to vendors’ data security capabilities), regulatory requirements, and internal capabilities such as encryption. While security should be a priority for any technology investment, security concerns “should not prevent organizations from considering a cloud-based solution, as strong security features have become table stakes for cloud and SaaS solutions.”
- Application integration. Data must move smoothly between applications to realize the full benefits of the cloud. Integration of SaaS solutions with large platforms such as enterprise resource planning systems does require an investment of time, attention and expertise. However, integration needs arise with the deployment of almost any form of software, regardless of whether it’s cloud-based or on-premises. “While most forms of integration… are fairly straightforward to handle from an IT perspective, tax executives and other non-IT leaders requesting cloud solutions should be aware of this need.”
- Governance. The actions you take to codify, measure and manage the relationship with the SaaS provider are crucial for the success of your cloud initiative. Don’t overlook them simply because your IT assets are being managed offsite.
Tax leaders who haven’t yet investigated the cloud should do so, working closely with their IT partners to “make and manage these potentially transformational investments,” the report concludes. Tax leaders should also have a tax-technology roadmap in place – a plan that’s examined in more detail here.
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.