Successful Tax Technology Business Cases Start with a Strategy

Learn how integrating these best practices can help businesses achieve their tax tech goals.

  • February 01, 2021

Whether or not a proposed tax technology investment receives funding hinges on the efficacy of the business case. As you would expect, thorough, well-supported proposals have higher odds of success. What may surprise some indirect tax teams, however, is that several key drivers of a successful tax technology business case are often present well before (and after) the need for new technology arises.

In our work helping a wide range of tax departments transform, improve processes and implement new technology, we’ve noticed that tax teams that develop compelling business cases tend to understand and/or perform the following: 

  1. The tax compliance environment changes – rapidly and continually: Leading tax groups keep tabs on rules and regulatory changes that affect their organizations as well as other external disruptions that affect their activities. Current tax compliance changes include the global rollout of new rules governing the gig workforce and the digital economy, the electronic exchange of taxpayer data and reporting information, and new rules and rates concerning e-commerce and marketplace transactions. Relevant technology disruptions include the rapid, ongoing harvesting of big data and the related use of advanced analytics and machine learning. Other forms of external volatility – including a trade war between the world’s two biggest economic powers and the global pandemic – also trigger challenges that ripple through tax departments. 
  2. Tax department trends: Regardless of where they are on their transformation journeys, high-performing tax functions monitor leading tax management – and tax data management practices. These include the growing use of tax engines within technology solutions, a heightened focus on certificate management, automation advances concerning use tax determination, data analytics enhancements, improved process reviews within audit and compliance, and enhancements after audit and overpayment reviews. 
  3. Developing and continually updating a tax technology strategy: High-performing tax teams almost always have a tax technology strategy in place. These plans identify how the department will leverage automation to reallocate resources from transactional tasks (e.g., gathering and manipulating data) to higher-value activities such as identifying tax-saving opportunities, generating additional revenue (e.g., via VAT recovery), designing efficiency improvements and more. “An effective playbook lays out the function’s tax technology vision (i.e., a prioritized rundown of the department’s IT needs), a plan and a budget for achieving this vision, and the challenges along the way that must be addressed,” noted Vertex Chief Tax Officer Michael Bernard notes in a Tax Executive article. 

Proactive communication of this vision and solicitation of buy-in from a variety of corporate stakeholders is essential from not only the executive team, but other beneficiaries such as accounting, IT, human resources and operations. Tax department needs are much more likely to be supported by best-in-class technology when these business case enablers are in place. Accordingly, integrating these practices as part of the daily administration of the indirect tax function will lead to the successful achievement of short-term and long-term tax technology goals. 


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.

Blog Author

Joni Johnson-Powe

Joni Johnson-Powe

Vice President, Tax Technology Consulting, DuCharme, McMillen & Associates, Inc.

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Joni Johnson-Powe is Vice President of DMA’s Tax Technology Consulting & Tax Process Optimization divisions. She leads DMA’s technology team of technical and function resources who are responsible for the delivery of indirect tax software and solution services.

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