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A brave new (digital) world

What the future holds for the tax department

Next-generation technology, talent, and operating models are having far-reaching implications on the tax profession, and this only looks set to continue as the digital age advances. Explore how these developments are unfolding and what tax leaders can do to prepare for the future.

Digital advances could mean big changes for the tax profession

In this International Tax Review article, Deloitte Tax LLP Managing Partner Kathy Scherer discusses the powerful forces shaping the future of work for tax professionals.

In 2015, the World Economic Forum asked over 800 business leaders when they thought governments would begin collecting taxes via blockchain.1 Seventy-three percent of respondents said they expected this to happen by 2023. Further, it is predicted that by 2025 self-service finance will be the norm. Accountants using spreadsheets will be replaced by technology that does 90 percent of the work without human intervention.2

Blockchain, artificial intelligence (AI), robotic process automation (RPA), cloud computing, the Internet of Things (IoT)—in this brave new world, smart, connected technology is challenging organizations and leaders to rethink the very dimensions of work. For tax professionals, this process begins with a basic question: What does the future of work look like?

Where tax has been

The tax profession has seen major shifts in recent years, including moves from paper to electronic tax filing, calculators to spreadsheets, and emails to shared drives. Now, technology is poised to build on each of these enhancements.

Beyond standard electronic tax filing, many tax authorities around the world are setting their sights on technology to enable digital collection and analysis of tax. Spreadsheets are being replaced with web-based platforms, which in turn are being outfitted with machine learning software and AI to significantly reduce manual data entry, transform data, and speed up review processes. Shared drives are being retired to make way for more collaborative platforms that include functionality beyond document management.

Each shift offers more efficient, effective ways to complete existing tax tasks.

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Where tax is going

Companies need to prepare themselves for the digital age ahead. One approach to this is through the work, workforce, and workplace framework:

Work: The type of work tax departments will be doing in the future

  • As data is increasingly aligned and integrated across an organization, more financial transactions are becoming seamless, and automated. Thanks to tools such as RPA and machine learning, tax professionals can now focus on risk management and strategic planning, and less on "data wrangling."
  • Being relieved of the time-consuming efforts of having to collect, clean, and format data, tax professionals can focus on providing faster, more accurate forecasts, predictive models, and increasing overall value to the organization.

Workforce: The workforce composition, skills, and capabilities required

  • The tax organization of the future will have people working side-by-side with machines in new and diverse talent operating models. Its tax professionals will be expected to demonstrate business acumen and new skills such as technology and data management. And its models will draw on a portfolio of labor that is full-time, contingent, or even crowdsourced.
  • Technology will pick up rules-based work. As routine tasks become automated and machines learn to interpret data, humans will need to redirect themselves to business partnering, planning, forecasting, and management reporting.
  • Eventually, soft skills and advanced problem-solving will move to the fore as tax professionals collaborate with other functions to explore opportunities for business impact. The tax professional of the future will also need creativity and analytical skills to tell an impactful, visual story about the insights they uncover.
  • These developments are likely to change the trajectory of the tax career. New skills and attributes will be required, an openness to learning and development opportunities will be essential, and tax leaders may need to redefine their team’s roles and responsibilities.

Workplace: The structures, tools, and environments that enable the workforce to create value in the future

  • The tax workplace of the future will be custom built to reflect digital culture, tools, and approaches. The old construct may be replaced with core tax teams that are smaller, flatter, and augmented with alternative resourcing models and machines.
  • Technology will enable collaboration, integration, and line of sight among geographically dispersed teams. In turn, tax leaders will identify the places, tools, structure, and practices for people to come together to create value.
  • As labor becomes more diverse, autonomous, and virtual, innovation and leadership may grow more democratic. Collaboration and agility will increasingly define top-performing organizations.
  • As for tax leaders, they can act as network architects and role models for the new ways of working. Fundamental to this will be an ability to facilitate the flow and exchange of ideas and providing greater autonomy at the team and individual levels.

Through this work, workforce, workplace lens, tax leaders can build a vision of the future that has the potential to reshape the world of tax–today.

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Is your organization up for the challenge?

The digital wave disrupting whole industries is now making its way to the corporate tax department.

The future of tax will see technology picking up the bulk of manual and repetitive work. The human workforce will represent a diverse cross-section of skills focused mainly on tax planning for the organization. The workplace will be more networked, devolved, mobile, team, and project-based, collaborative, real-time, and fluid than ever before.

In this future, tax professionals face new demands. Critical reasoning and thinking skills, the ability to connect the dots across multiple areas, and a deep understanding of the business will become as essential as the technical tax experience they worked so hard to acquire. Done well, however, this future has the potential to be the most engaging and fulfilling in the history of a much-respected profession.

Connecting the dots
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