As tax and finance professionals the very nature of work as we know it is in the process of changing dramatically. By the end of the decade technology will transform the nature and value of the work we do, it will form the centerpiece of our relationship with revenue authorities, and it will reshape corporate relationships with the supporting ecosystem of advisory firms, auditors, and systems vendors.
The seminal 2013 McKinsey report “Disruptive technologies: Advances that will transform life, business, and the global economy” attempted to estimate the economic impact of a number of technologies on the global economy by 2025. The ‘Automation of Knowledge Work’ ranked second on the list with an estimated $5-7 trillion USD annual economic impact by 2025, second only to the ‘Mobile Internet’ and dwarfing media darlings such as ‘3D Printing’, ‘Autonomous Vehicles’ and ‘The Internet of Things’. The report went on to calculate that 80% of this positive economic impact would be generated among the developed economies that account for the majority of the worlds 230+ million knowledge workers.
The transformation of tax and finance from a function focused on ‘Hindsight’ has already begun in earnest, as businesses look to generate ‘Insight’ whilst also saving time, money, and effort by automating period end processes through the application of software as a Service ‘SaaS’ offerings. These ‘efficiency’ plays have been established for several years with well proven business cases supporting increasingly wide spread adoption. As good as it has been to us over many many years Microsoft Excel is no longer a sufficient catch all tool for the management of tax and financial data.
However it’s not all sunshine and lollypops as we skip hand in hand into a high value, low risk, automated future. In a 2014 report into “Modern Finance in the Digital Age” prepared by FERF and Oracle, David Pleasance, Senior Partner, Deloitte Consulting LLC says “We believe the shift to digitally-enabled business models is very much a CFO issue and opportunity”, but the same report suggests that many finance functions are the last to ‘digitise operations’ frequently waiting in line behind customer engagement, sales, and marketing when it comes to investment in critical technology.
Have Tax and Finance teams become the 21st century’s boardroom Luddites?
It’s hard to escape a leadership meeting these days without some discussion on ‘Real Time Analytics’ or ‘Big Data’ or ‘Insight Generation’, and yet there is still a palpable lack of clarity in many organisations as the role tax and finance plays in delivering these business critical capabilities.
One thing is for certain; the taxologists among us have seized the opportunity and are running with it toward a new paradigm… a journey we will chart more closely in blogs to come.