June’s TP Minds International saw 300+ delegates join the industry’s largest gathering of Transfer Pricing experts for four days of presentations, regulatory updates and workshops.
ARKK hosted a panel discussion focusing on ‘Tax Transformation and Technology’ – looking at how tax teams are using tech to manage the overwhelming volume of data which has become a day-to-day part of working life. If you didn’t make it on the day, below are 5 key takeaways to consider if you feel, as many of our audience did, that technology could be better used to support Transfer Pricing.
Transformation – what do you really want to achieve?
It might sound obvious to ask this question, but with ‘transformation’ entering buzz-word territory it’s all too easy to approach this as a tick-the-box project, and not focus on your organisations’ specific goals.
Instead of viewing transformation as a large concept to overcome, start simply by asking yourself and your team ‘what are we trying to achieve?’ to give direction to your project. This will likely affect wider areas of tax outside of Transfer Pricing. Identify what the problem is, what information you need better access to and most importantly of all, what a successful outcome looks like.
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Data analytics or decision making – how are you spending your time?
With the regulatory and internal reporting landscape increasing year on year, many tax professionals aren’t doing the Transfer Pricing work they trained for. There is a gap emerging about where TP experts spend their time and where they want to spend their time, divided between the intellectual challenge of affecting pricing change and the operational implementation of policy.
Whilst almost any role in finance will require ‘business as usual’ data management, tax professionals have not trained to work with very large complex data systems, or to construct the environment to manage data in. When the balance of their work falls on extracting data and forcing it through Excel, their wealth of experience and drive to impact business-wide improvements are not reaching their full potential.
If you want to strike a more suitable balance between the time spent on strategic analysis and decision making vs implementation of data management, you may benefit from a tech transformation project; taking advantage of modern technology to ease the data-burden and spending more time on the part of your role that you trained for.
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Stakeholder buy-in is essential
Our attendees had an option of four streams and chose to spend the last 45 minutes of TPMinds before the bar opened with us in ‘Tax Transformation and Technology’. Their interest and drive to gaining valuable time back using technology was clear from their attendance, but what about those not in the room?
Consider who are the wider stakeholders and benefits from such a project; who would also welcome automation to take on reoccurring data work, and how you can get them on board. Establishing an internal campaign and a PMO team may seem slow at the start, but this early buy-in is essential for success. Once key stakeholders are on board, your questions around process and data will be answered faster, and the wider team could bring ideas to the table that you have not considered.
With Transfer Pricing at the heart of most large businesses, you may even find there’s more interest and enthusiasm for getting involved than you realise. After all, if Transfer Pricing experts have been skilling up in data analytics for years, perhaps your IT team would be excited by the prospect of helping you put your models into place! Formalising a working group with clear goals on where you are now and where you want to be ensures that tax transformation will happen efficiently, and many areas of the business will immediately benefit from this approach.
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"Don’t wait for the future, imagine it now"
When some in the room started their careers, a spreadsheet was a double width piece of ledger paper; within ten years, it’ll be inconceivable to the next generation of tax accountants to do calculations in Excel. Times change. At TP Minds International the convenience of technology was clear; few physical business cards were exchanged with delegates preferring to scan each other’s LinkedIn QR codes – how would this compare to five years ago when getting business cards was an essential part of preparing for any external conference or business meeting? And what percentage of the work force will use them at all in 2027?
The use of technology in our day-to-day lives has always been slower to take hold in B2B, but it is not sustainable or practical to have the gap widen further. To get stakeholder buy in, ensure they know the tech change is coming for all, not just some, firms. When you start your technology transformation journey is up to you but it will happen, and the sooner you start, the sooner you’ll see the benefits.
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Haven’t started your transformation journey? You’re not alone
We asked our audience how they would describe the level of technology/automation in their Transfer Pricing function. With a few votes for some level of automation, 74% said that this was minimal, and most of the process is manual involving spreadsheets.
The desire for change in the room was clear when we asked the delegates to sum up their OTP process with a single word. General sentiments described this as 'hard', 'slow', 'manual' and in one case 'tortoise-like'. If this is the case today, these clunky, laborious processes will become even harder to manage. Understanding how innovative technology can ease the data burden will allow TP experts like our panelists and audience to get back to tax.
If you’d like to speak further about starting your own automated operational transfer pricing project or discuss the panel in more detail, get in touch with ARKK today.