Integrated corporate tax management system.

• Author: Brabazon, Steve

Background

Change is rarely easy. Increasingly, however, corporate tax departments have been asked to make changes in their pursuit of improved, streamlined and more cost-efficient operations. During the late 1980s, Citicorp realized that its tax function needed to change, both from a process and technology standpoint. Not only were Citicorp staff resources fully used and stretched thin, but an ever-increasing compliance burden, rapidly changing technology and management's demand for greater cost efficiency had all combined to make the situation worse, and prompted Citicorp to assemble a team of tax and systems experts to address then-current tax processes and tools. Consistent with the reengineering that corporations have initiated over the years, the corporate tax advisers needed to find a way to do things in a smarter and faster way.

The Citicorp evaluation team discovered that the first step toward improved and streamlined operations involved a complete redefinition of the corporate tax department. Like most other multinational companies at the time, Citicorp organized its tax function along very specialized lines. The different compliance groups--Federal, state and international, for example--required unique organization and information systems to gather the data needed for their respective tax calculations. One negative aspect of these unique needs was a redundancy of databases throughout the tax department. This fragmented approach had become inefficient and expensive as a more global method to minimizing corporate taxes became the norm.

Citicorp responded by moving from a task-oriented tax department to a process-oriented department--one poised to address the increasing demands of business in the twenty-first century. Just as importantly, all of Citicorp's full-service tax groups--domestic, state, international, fixed asset, audit, consolidation and financial tax accounting--were given access to improved technology, allowing them to get more done, faster and at increasingly lower cost.

New technology

After a year of evaluating all the corporate tax software on the market, Citicorp replaced its use of in-house mainframe systems with the Local Area Network (LAN) version of the Tax Management System (TMS), Price Waterhouse LLP's proprietary software for maximizing corporate tax department efficiency. By embracing new technology, the tax advisers at Citicorp were able to place increased focus on how things were done, allowing the...