Tax groups + advanced technologies = higher-value contributions

An over-the-shoulder image of a woman sat at a warm wooden table, looking over code on a laptop.

While Generative AI (GenAI) applications top many technology investment priority lists, tax leaders and their teams should consider a broader collection of advanced technologies – and how those tools can enhance the tax group’s higher-value contributions to the organization.

GenAI certainly warrants IT dollars. That said, it’s helpful to consider how a larger group of interrelated emerging technologies – including artificial intelligence (AI), robotic process automation (RPA), machine learning (ML), optical character recognition (OCR) and data analytics – can help indirect tax teams. Here’s a brief rundown of these technologies:

  • AI: an umbrella term for technologies and tools that mimic human learning and thinking – variations include RPA, machine learning and OCR.
  • RPA: tools that replicate human actions by automating repetitive, role-based processes.
  • Advanced data analytics: applications that harness raw data, including big data, to produce new insights.
  • ML: tools that leverage algorithms to “learn” and produce higher-quality, more accurate outputs.
  • OCR: the conversion of printed characters into digital text.

Technology vendors are leveraging these advancements to introduce new capabilities to ERP solutions and the applications (e.g., tax engines) that integrate with, and operate in, ERP ecosystems. For example, AI Foundation on SAP Business Technology Platform serves as an all-in-one toolkit. It equips developers with AI that is ready-to-use, customizable, grounded in business data and supported by leading GenAI foundation models. This offering consists of out of the box AI services, including tools (and runtimes) for application development, data analytics and integrations (which enable connections between SAP and non-SAP systems).

For their part, tax groups can leverage AI, RPA, analytic, ML and OCR functionalities and applications to expand and improve:

  • Tax planning, policy and management activities;
  • Subjective decision-making that requires human insight and intelligence;
  • Active governance of AI-generated results; and
  • Decisions and tasks involving ethical judgments

Those activities give tax groups a valuable opportunity to elevate their strategic contributions. Of course, harnessing advanced technologies requires new skills and a risk- management mindset. Tech-savvy tax groups understand that optimizing their investments in cutting-edge tools requires:

  • Clean, tax-relevant, appropriately formatted data;
  • The identification and remediation of AI risks;
  • New skills and upskilling programs; and
  • Strong AI governance guardrails and human oversight

Two final points: first, these technologies are still evolving; and second, no one-size-fits-all solution addresses all tax challenges. As such, it’s important to continue to learn new ways to use and implement these advanced tools.

This white paper provides a deeper look at emerging technologies and how they’re driving tax optimization in the SAP ecosystem.

Copyright © 2024 Vertex, Inc. All rights reserved. The information contained herein is intended for information purposes only, may change at any time in the future, and should not be relied upon in making purchasing, legal, or tax decisions.

Blog Author

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Justin Barnes

Vice President, DMA

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Justin Barnes is Vice President at DMA, responsible for providing strategic oversight and thought leadership to the Tax Technology practice. He works closely with clients to provide analysis of current state indirect tax processes and challenges, provide recommended solutions based on industry best practices, and provide oversight to solution delivery teams. He holds a Bachelor of Science (B.S.) focused in Information Technology from Excelsior College.

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