multistate tax symposium · advice or services. this presentation is not a substitute for such...

The 2020 National Multistate Tax SymposiumMastering the Art (and Articulation) of State Tax—Distilling the Complex

January 29-31, 2020

Tax transformation: The path forward for multistate tax function Andy Gold, Deloitte Tax LLPBridget Foster, Deloitte Tax LLPTyler Juckem, Anthem, Inc.

January 29-31, 2020

3The National Multistate Tax Symposium: January 29-31, 2020Copyright © 2020 Deloitte Development LLC. All rights reserved.

• Introduction

• Tax Department Trends & Emerging Technologies

• Application of Emerging Technologies – Illustration/Discussion

• Change Management Considerations

• The Future of Tax

• Q&A

Agenda

The State of the State Tax Department


Global Regulatory changes

Move to the cloud

Quality and risk

Global transparency

Resource constraints

Add more value

Tax is Constantly Changing


Roles and Expectations of the Tax Department

Tax Department Trends & Emerging Technologies


• Big Data

• Disparate systems

• Need for speed

• Global integration

Robotic Process Automation (RPA)

Optical Character Recognition (OCR)

Extract Transform Load (“ETL”) solutionsRegulatory changes & scenario planning

Tax department trends Related emerging technologies

Cognitive computing

Analytics

Suite expectations

Tax trends & technology

Data management & process automation

Cloud ERP migration

9

State Tax Analytics


State tax analytics / dashboards


Activity Map and KPIs for

Sales, Property, and Payroll

Drill-Down into detail by

Entity, Account, State, and Location

Interactive

Search

&

Filtering

State apportionmentAnalytics dashboard


State tax analyticsIllustrated (indirect tax)


Analytics ExperiencesChallenges & Benefits

CHALLENGES

❑ Obtaining the data

❑ Access to technology platform(s)

❑ Leveraging experienced resources

❑ Understanding where to start

❑ Cost

BENEFITS

❑ Ability to leverage for insights

❑ Understanding errors / improve accuracy

❑ Effective communication tool

❑ Drives fact based action / outcomes

14

Automation / Data Wrangling


What is Data Wrangling?Data Wrangling is the process of retrieving raw data and making it useful for analysis and reporting

1

Staging and

Preparation

Analysis

Integration

Layer

Extraction

2

3

Provide seamlessworkflow across

modules to simplify user experience

Benefits of Data

Wrangling

Applicability of

Data Wrangling

• Automation

• Integration

• Data Accessibility

• Autonomy

• Data detail

• Data reconciliation

• Apportionment

• Compliance

• Provision

• Indirect Tax


Illustrative Workflow for State Apportionment

Data Wrangling

This workflow consolidates ERP data, reconciles against a trial balance, maps to tax software import templates, and creates required workpapers for documentation purposes.


Illustrative Workflow for State Apportionment (cont.)

Data Wrangling


RPA - Overview

What It Is What It Is Not

Computer coded software

Cheaper and faster way to automate processes

Cross-functional, cross-application macros

Physical hardware

A multi-year technology deployment

Artificial intelligence

What It Can Do

Pull data from the web

Obtain human input via email / workflow

Make calculations

Extract data from docs

Collect statistics

Follow “if/then” decision rulesRead / write to DB’s

Fill in forms

Copy / paste

Move files & folders

Log into web/enterprise apps

Open, read and create emails

Benefits

Lower labor costs / labor redeployed to higher value activities

Increased process throughput

Improved process quality

Greater delivery model flexibility

Better scalability

Better payback / ROI – relatively low cost to implement

Source: 2018 Deloitte RPA Survey


RPA Tax Examples

Indirect tax compliance – sub processes

E-filing

Use tax reconciliation

Pulling invoices

Tax provision – sub processes

Direct tax compliance – sub processes

And more….


Robotics Experiences Lessons Learned……so far

Sustaining the

automation

Building bots

Getting started


Getting Started

Review processes closely and build out flowcharts

Get into details – gaps in process; pain points

Partner with technology experts (IT/3rd parties)

Leverage broader finance/enterprise wide efforts

Dedicate sufficient & right resources

Consider ongoing maintenance costs/effort


The tool uses machine learning to develop artificial intelligence.

CognitiveTax Insight™ (CogTax)— An illustration of cognitive technology in action

Client Raw Data Import

Raw Data Taxability

Taxability Identification &

Validation

Data Cleansing

Consolidation and Data Mapping

Insights

Interactive & Predictive Insight

Generation

Potential

Opportunity

Potential Savings Opportunity

Identification / Prioritization

Structured Data GL, AP, EDI, and other structured

data

Non-Structured Data

Invoices, PO’s, contracts, etc.

Hypothesis Validation

User interacts with data and validates taxability decision

Tool gains artificial intelligence through taxability validation of the structured data and OCR-captured data to enable fasterand smarter insight generation

Machine Learning Process

Robust Insight Generation

23

Migration to the Cloud


Cloud ERP: potential impacts to tax

Migrating to Cloud ERP

is a life event for tax,

an opportunity to enhance

data for all tax processes

Cloud ERP implementations

are new implementations

not “lift and shift”

ERP preconfigured solutions

does not equal

pre-configured for tax

• Tax must align and design data requirements side-by-side with other functions

• Tax legislation is creating increased volume and frequency of data needed by the tax department

• Change in ERP = change in tax compliance and provision systems

• Native functionality in the ERP’s are being replaced with “bolt-on’s” to manage global indirect taxes

• Cloud applications may require integration of a tax engine to automate tax calculations

Change Management Considerations


Process

Technology

People

Transformation of the Tax DepartmentBuilding Blocks for Change

DATA & INFORMATION

CLEAR VISION & STRATEGY


Two Key Resources Facilitating Tax Department Transformation

• Need people who understand both tax and analytics

• Hard to find

• Perhaps easier to start with a quantitative person and teach them tax than vice-versa

• Tax planners may be a good starting point

• Need to harmonize and integrate tax data across the organization

• Spreadsheets may proliferate multiple versions of data and terminology

• Need to include tax data in enterprise data warehouse

Human Infrastructure

Data Infrastructure

Copyright © 2020 Deloitte Development LLC. All rights reserved.


Technology & Data AnalyticsA Tax Department Journey

The Case for

Change

Aligning with IT

Understanding the

Technology

Building a Roadmap

Focus on Impact



Future of Tax


Technology change is accelerating… Tax Departments are transforming…


Professional Skills Past Future

Business technical

Global project management

Data management

Technology application

Process optimization

People change management

Consultative business

Required Not Required

Today’s skilled workforce has more diverse skillsets, which are necessary to thrive in today’s technological environment

Changing Environment - Talent

32Copyright © 2020 Deloitte Development LLC. All rights reserved.

Work Worker

Workplace

Current work options

Future work options

Work, Worker, Workplace

Changing environment: talent

What work can be automated?

More tasks will be automated, including “smart” work

Who can do the work?

Technology enables new modelsfor interaction between companies,

employees, and customers

Where is the work done?

Rethinking combinations of talent, technology and workplace

33Copyright © 2020 Deloitte Development LLC. All rights reserved.

Eight strategic questions to consider

1. WHAT is your future digitalwork strategy?

2. WHAT work can bedone by smart machines and robots?

4. WHERE can the workbe done?

3. WHO can do the work?

5. HOW does the future of work change organization designand behavior?

6. HOW does the future of work change leadership?

7. HOW does the future of work change talent, career and learning?

8. HOW do you develop a workforce experiencefor the future workforce?

1. Work 2. Worker 3. Workplace


Traditional resourcing models are evolving due to outsourcing and automated solutions

Tax Operating Models are Transforming


`Identify “Pain Points”

Standardize processes

Assess the “Art of the Possible”

Develop automated data

solution

Apply data analytics

Data health check

Enhance use of existing technology

tools

Some ways to get started

Leveraging the power of data and technology


Contact information

Bridget Foster

Deloitte Tax LLP

[email protected]

Andy Gold

Deloitte Tax LLP

[email protected]

Tyler P. Juckem

Anthem, Inc.

[email protected]

mailto:[email protected]




This presentation and related panel discussions contain general information only and the respective speakers and their firms are not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. The respective speakers and their firms shall not be responsible for any loss sustained by any person who relies on this presentation.

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