Tax 2.0’s Total Tax Transformation Toolset enables you to develop a customized, comprehensive plan for transforming your tax department’s operations, including a roadmap of sequenced activities moving toward an optimized state and a scorecard for measuring their progress and performance.
The toolset was developed through a unique collaboration of more than 300 corporate tax professionals on the topic of optimizing tax operations. It is comprised of three inter-related base components:
1. A comprehensive survey of opinions about tax transformation to be taken by members of the tax department and other stakeholders. The survey includes statements about the current state of operations, goals for transformation, barriers to, unintended consequences of, and assumptions about transforming tax operations.
2. An industry roadmap for tax transformation, with 53 unique activities to define an optimized tax operation. Each activity includes a brief description, purpose, and a set of deliverables.
3. An industry scorecard for measuring performance and progress toward an optimized state.
After your tax colleagues and invited others complete the survey, you receive a report on Total Tax Transformation at your company. This report includes an analysis of the range of responses, indicating where your collective views are aligned and where they require further exploration on some aspect of transformation. You also receive customized versions of the industry roadmap and industry scorecard for tax transformation, highlighting those areas that appear to be most relevant to your particular tax operations.
The report provides you with a blueprint for transformation using a framework that was defined by tax professionals based on their collective wisdom and experience. You can use this as a basis for discussions and planning within the tax department, or with colleagues in finance or IT, as well as with outside advisers.
How the Tools Work Together
The Total Tax Transformation tools – opinion survey, roadmap, and scorecard – were designed to work together in order to provide clear indicators of your need and degree of readiness to change specific areas of your tax department. For example, here are a few statements on the survey related to internal customers of the tax department:
· Our tax department needs to be more proactive with our business units or more responsive in supporting their needs. (Goal)
· How the tax department is perceived by other groups in the organization must be a key measure of effectiveness of tax operations. (Goal)
· Our other business functional areas need to have a greater appreciation for the tax impact of their business decisions. (Goal)
· Non-tax professionals in our organization need to become more “tax savvy” business people. (Goal)
· The influence and credibility of our tax department is not what it needs to be. (Goal)
· Our tax department personnel need to be more proactive and outgoing in their interactions with internal customers. (Goal)
· Our tax department should be involved solely in tax advisory services and should not be involved in tax compliance services. (Goal)
· Our tax personnel’s understanding of our company's business operations is not sufficient to operate in an optimized tax environment. (Barrier)
· Our tax department does not have comprehensive, tangible service level agreements with our internal business customers. (Barrier)
· There is no incentive for functions outside of our tax department to support our requirements for optimization. (Barrier)
· We need to optimize our tax operations because of the increasing complexity or our business operations. (Assumption)
· We need to optimize our tax operations because we need more time to support the tax needs of its internal customers. (Assumption)
· Too often, our tax department finds out about business decisions too late to effectively address their related tax issues. (Assumption)
· Our tax department is held in high regard by all business functions. (Assumption)
· All business leaders in our Company value the timely and accurate tax input we can provide for their business decisions. (Assumption)
These statements have implicit connections with certain activities on the Roadmap that address your department’s relationships with internal stakeholders. (In fact, there is a whole category of activity on the roadmap dedicated to Stakeholders.) For example, there is a roadmap activity called “Reputation Design.” Here is some additional information about the activity:
Purpose: To establish the characteristics by which the Tax Department will be known within the organization, so that effective human resource and relationship development programs can be designed.
Description: If you had three words to describe your tax department, what would they be? What if you asked the CFO, or the heads of business units – what would they say? What would you like them to say? What could you do, together with your colleagues, that would cause them to actually describe you that way?
Deliverables:
· Articulation of key descriptive attributes necessary for tax department to achieve its mission
· Identification of the current reputation and the sources of that reputation
· Gap analysis and planning to move the reputation to the desired state
· Determination of Reputation Design’s place on Scorecard
Other activities on the roadmap that deal directly with these internal Stakeholders include Staffing Assessment; Business Knowledge, Relationships, and Influence & Credibility. (Note: you may not need to undertake all of these activities, depending on previous work you may have done and the feedback you receive on the survey.)
Similarly, the Total Tax Transformation scorecard contains several items that allow you to measure your performance relative to these internal relationships, including:
· Business Unit Tax Research and Analysis Performance
· Tax Planning Opportunity Identification
· Influence and Credibility Development
· Tax Organization Proactivity
· Business Operations Understanding Performance
· Perceived Tax Operation Effectiveness
For each of these performance areas that you decide to include on your customized scorecard, you will identify specific measurements to track your progress, based on the input from the survey and through the work of the roadmap activities listed above.
Again, the examples above are offered as a means of explaining how the individual tools in the Total Tax Transformation toolset are connected to each other. For more information about putting the toolset to use within your tax department, see the Total Tax Transformation Toolset User Guide.
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