Transform to Perform
Tax Transformation:
What does it mean
to you?
Nathan Andrews, Partner
Carl Mallios, Partner
Allison Matthews, Senior Manager
Deloitte Tax LLP
May 1, 2015
Trends in tax
transformation
Trends in tax transformation
Why tax? Why now?
Growing business
complexity and
regulation
Accelerating
globalization
Tax considerations can be
pivotal in strategic business
decisions
‫‏‬
Tax risks are growing due to
changing tax laws in multiple
jurisdictions
‫‏‬
Evolution of the
finance function
CFOs expect tax executives to
do more with less
‫‏‬
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Evolution of
tax applications
Commercial tax applications
have come of age, enabling
wholesale process change
‫‏‬
Intensifying
competition
New competitors, markets, and
business models are driving
need to grow top line
‫‏‬
Increasing need
for diverse talent
Tax departments require
personnel with advanced
technology and business skills
‫‏‬
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Trends in tax transformation
Focused vs. integrated transformation
Tax
Accounting
C-Suite
Communications
Global Tax
Strategy
Development
and Execution
In-Country
Taxation
Finance/
Capital
Structures
(Treasury
Support)
Transfer
Pricing
Indirect
Tax
Tax Resource
Management
Risk and
Controversy
Management
Customs
Regulatory
Compliance
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Emerging expectations
The way forward
How can tax create value?
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Gain
efficiencies
Manage
risk
Boost
EPS
Tax departments
tend to be the
largest consumers
of financial data
Regulatory
complexity and
increased scrutiny
add pressure to
global compliance
and reporting
burdens
As a rule,
taxes represent
the single largest
expense on P&L
after cost of sales
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What is the transformation?
Expanding the role of the tax function
Traditional role
Enhancing the tax function for greater impact
Planning
Reporting
The
Emerging
company’s
additional
tax & finance
expectations
profile
Managing
Process, technology,
and data management
People
Sustainability
and efficiency
Strategic partnering across the organization
Collaboration
Clear
communication
Leading strategic
initiatives
Derived from Deloitte stakeholder interviews, including over 70 CFOs, in preparation for Deloitte Tax Executive Transition Labs™.
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Expanding the role of the tax function
Enhancing the tax function for greater impact
Process, technology, and data
Sustainability
and efficiency
• Consistently reduce
cost of global tax
function
• Deliver high quality at
low cost in mature
areas
• Align with statutory
accounting
• Increase Tax
partnership across
the enterprise
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Tax
function
• Establish global tax
processes
• Integrate technology
across business functions
• Access data for increased
efficiency and
effectiveness
• Maintain quality
of data used by Tax
People
• Meet heightened expectation of sustainability
and efficiency in traditional roles
• Determine appropriate sourcing mix: in-house,
outsource, offshore, shared service center
• Implement succession planning
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Expanding the role of the tax function
Strategic business partnering across the organization
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Collaboration
Clear
Communication
Expanded responsibilities
for Tax require close
collaboration with every
facet of the business in
order to understand and
gain alignment with the
overall business strategy
Articulating a confident,
concise, and compelling
value proposition for an
integrated and wellfunded Tax and risk
management function
to a non-tax audience
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Leading
Strategic
Initiatives
Leads projects across
functions that align with
the‫‏‬company’s‫‏‬vision,‫‏‬
while maintaining line
of sight throughout the
organization
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The way forward
Transformation enablers
Critical enablers to successful transformation
Data and
technology
• Fully leverage
existing technology
• Integrated systems
versus point
solutions
• Integrated data
requirements
• Embedded reporting
People and
organization
Risk
framework
• Operating models
• Tax Risk Intelligence
• Focus on cost
reduction
• Tax in the board
room
• Tax professionals
of the future
• Data analytics
• Demonstrating value
of the Tax
department
• Bolt-ons
Business
partnering
• Knowledge of the
business
• Collaboration with
the business
• Alignment with
business strategy
and priorities
• Communication
of risks
• Accommodating
Business Model
Optimization
structures
• Addressing time
consuming or
problem areas
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Opportunities to transform vs. react
Business Model Optimization
Operational Transfer Pricing
Integrated Tax Systems
Tax Technology Architecture
Organizational Design Sourcing
Tax Data Management
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Taking action to transform
Understand perspectives
1 Define your vision
Focus: A shared vision of key
characteristics that define
your department in 3-5 years.
2 and expectations
Focus: Gain insight into perspectives from
external stakeholders and your direct reports
to calibrate expectations and understand
opportunities for transformation and alignment
your
3 Assess
effectiveness
Prioritize: Validate the
competency model for your
department and assess your
effectiveness across four key
enabling areas. Identify
opportunities to improve your
performance or create more
value for the organization.
Transform
6
4
Confirm your
commitment
Mobilize: Identify areas of
confidence and concern relative
to executing against your
initiatives. Commit to specific
actions as individuals and a team
to move toward your vision.
Prioritize
opportunities
Prioritize: Consider your vision
for the future Tax department and
select a subset of priorities
(competencies and/or enablers)
to focus on based on the
potential value to the
organization.
initiatives
5 Develop
and mobilize
Mobilize: Dig into root causes and identify
potential approaches to address high priority
competency areas. Develop an action plan with
key milestones and owners.
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Building a business case
Alignment
and scope
• Establish
understanding of
tax alignment
process
• Agree on
approach and
scope of tax
business case
• Develop and
prioritize a list of
potential value
areas and pain
points
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Value
discovery
• Broad-based
review of
tax processes,
workpapers,
filings, and tax
planning
• Conduct
workshops
• Estimate value of
potential benefits
Tax Executives Institute – Charlotte Chapter
Analysis
Validation
• Develop solution
recommendations
and overall value
proposition
• Review, validate,
and finalize
business case
with stakeholders
• Refine business
case and benefit
estimates
• Present findings
to finance
executives and
project sponsors
• Prepare business
case presentation
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Questions and answers
About this presentation
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