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What Are The Main Obstacles Affecting Tax Transformation?

It’s an unfortunate fact that change in any organisation is regarded with suspicion in some quarters and outright rebellion in others. Implementing new ideas and procedures is always a challenge, particularly in the case of something as forward-thinking as automation. But the need for change can’t be underestimated, with a new breed of businesses now competing in the marketplace. IDG’s 2018 Digital Business research discovered that 55% of start-ups had already adopted a digital strategy as opposed to only 38% of traditional businesses.


So, what can you do in your company to ensure that the business, as well as the tax department, will embrace change?


Lack of education on digital transformation

In a recent roundtable one of our tax experts, Finance Operations Manager, Zuheir Alghafeer had first-hand experience of the challenges involved in digital transformation. While acknowledging that some people have an innate resistance to change due to them wanting to maintain the status quo, he attributes the particular suspicion of automation to the incorrect belief that it will lead to job losses.


Education around this issue is a key component in achieving acceptance. Automation will lead to an evolution of people’s roles – rather than a reduction of the workforce.


Indeed, rather than someone’s role being that of a data processer, looking at endless swathes of information, the system can do that now. That person is, therefore, able to spend the time analysing the data to create better outcomes.


Every organisation has different challenges when it comes to implementing change, some find that creating consensus around digital transformation can be the biggest obstacle.


The structure of the company is also fundamental to the conversation. Take, for example, an organisation with a combination of big companies employing a series of legacy networks and systems at one end, and smaller organisations who didn’t see why an issue such as VAT, which takes up a small amount of their time, needed transformation to work well.


It’s vital that the benefits of transformation are clearly communicated to various stakeholders and that their operation wouldn’t be out of pocket during the transition.



Another understandable concern about transformation involves the issue of security, particularly in the world of finance.


“In our industry, a lot of banks are worried about the information security side of an account-based software provider. That’s something that’s been mentioned in my organisation quite a lot,” revealed Paula Mason, Head of VAT, during the discussion.


Clearly, the area of cybersecurity, particularly within a heavily regulated industry, is crucial. Each sector has its own requirements in terms of security procedures, however as one of our tax leaders mentioned, the concerns around the safekeeping of sensitive information in tax technology may be a little “overcooked”.


Cloud-based solutions, such as our very own for:sight platform, offer industry-leading and robust safeguards which are likely an enhancement over many organisations’ in-house setup.


One method to gain buy-in from senior stakeholders on digital technology would be to implement a solution on a very small scale. This would demonstrate how the approach employed could be extrapolated to any kind of IT project, such as tax transformation.


Slow and steady, wins the race

Zuheir Alghafeer mentioned an issue at the roundtable discussion that everyone had faced at some time in their career, he relayed a familiar tale of tax data spread over multiple spreadsheets. Add into the mix a heavy reliance on a small number of individuals who knew how the system worked, and he had a situation that was starting to cause considerable headaches in his company.


The first steps to a solution were remarkably low tech. He simply tackled the manual issues with the spreadsheets and created a more systematic approach to operations so that someone unfamiliar with the process should be able to work it out with relative ease.


With stakeholders experiencing the benefits of these small changes, he was in a much stronger position to suggest upgrading the company’s Enterprise Resource Planning (ERP) software to build on his early progress.


“Management could see the benefit of that addition to the ERP and slowly, over time, we managed to get the whole thing automated,” he said.


It was the advocacy of middle management who were enjoying the incremental benefits of his work overtime, that ensured support further up the corporate structure.


The key takeaway from the discussion was that a patient approach to any change, and an emphasis on demonstrating value to stakeholders, is the two-pronged path to success.


For more insights, watch the full tax leaders’ roundtable discussion over on our YouTube channel. Please comment, like and subscribe for more great content and if you’d like to know more about our tax technology, we are always happy for you to reach out.