Tax data analytics success requires a cultural shift

A woman in thought at her computer. She is reviewing a global business dashboard on her computer in front of her with various data metrics and blue graphs related to her organization. She is chewing on a pen, has her glasses on, and has her hair in a bun to illustrate her attentiveness.

Are organizational investments in tax and finance technologies yielding reliable returns? The answer is a resounding yes, according to a new report from EY.  

Among many other advantages, digital initiatives can help tax leaders expand their strategic role in the business, according to EY. “Tax and finance functions should do an even better job of being tied to business change overall. The transformation will better equip tax executives to be thought leaders and help apply their tax insights, including those derived using advanced analytical tools, to long-term business strategies and decisions. But they need to get in the room where those decisions are made.” 

To bring data-based insights to those discussions, tax leaders need to look beyond the technology dimensions and consider what’s needed to develop the right organizational culture – one in which data analytics can thrive. Deloitte offers some useful guidelines in this CFO Journal article, How to Create a Data-Driven Culture. Based on this guidance, it makes sense for tax leaders to ask the following questions:  

  • Can we address change resistance with a mission-centric approach? A clear understanding of your current organizational culture can help you identify potential roadblocks to becoming more data driven. Define and communicate the rationale for change and the consequences of not changing. Remove barriers to data access so that stakeholders can harvest it for better outcomes and insights. 
  • How can we build trust and rethink incentives? Since data-based insights can run counter to established beliefs, leaders should look for effective ways to explain how the technologies work and to communicate their value. Employee incentives can help leaders challenge organizational norms and reward innovative approaches to data and analytics. 
  • What actions will help make data literacy a priority? From classroom learning to self-paced online training, data literacy programs can help learners understand how analytics contribute to the organization’s mission. Leaders may want to explore ways to increase their own level of comfort in interpreting data and modeling behaviors for data-driven decision-making.  

Fostering a data culture “can be a considerable challenge,” the Deloitte article notes. But it’s essential for tax organizations that want to harness the full transformative power of analytics.

Blog Author

Michael J. Bernard, Chief Tax Officer – Transaction Tax at Vertex Inc. Vertex's Chief Tax Office (CTO) provides insight regarding the impact of tax regulations, policy, enforcement, and emerging technology trends on global tax department operations.

Michael J. Bernard

Vice President of Tax Content and Chief Tax Officer

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Michael Bernard is the Chief Tax Officer of Transaction Tax. In his role, he provides insight and thought leadership around tax department operations, U.S. indirect tax, tax risk management, and tax policy, as well as emerging tax trends. He is an executive-level tax attorney with a diverse portfolio of experience in corporate tax, administration, and finance, including a substantive knowledge of U.S. and international tax laws.

Prior to joining Vertex, Michael was in various tax leadership roles at Microsoft Corporation for 28 years, the most recent being Senior Director – Tax Counsel. Michael led teams in the following functional areas: direct and indirect tax controversy, sales and use, business license, property, tax IT, SOX, and telecommunications. He also co-led a corporate taxpayer advocacy group with the Washington Department of Revenue and was a Director on the Board of the Washington Research Council. Michael has also testified before administrative and lawmakers at both the federal and state level.

Michael earned both a J.D. and a Bachelor of Science in Business Administration from Creighton University. He is a part-time lecturer of Law in the LLM program at the University of Washington School of Law. Michael also served on the board of directors, executive committee, and chaired committees for The Tax Executives Institute (TEI) for nearly 25 years.

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