RPA, DLT, ML, and AI: The New Normal in the Tax Function.

• Author: Chen, Anli

The Expert: Anli Chen

As recently as five years ago, technologies such as robotic process automation (RPA), distributed ledger technology (DLT), machine learning (ML), and artificial intelligence (AI) were mere technology buzzwords for most tax professionals. Now, rarely do you see an organization that is not incorporating these technologies into its strategic plan for the new decade. This past fall, Gartner released its highly anticipated list of 2020 technology trends, which details what is really happening in this space as we enter a new year. (1)

Question: How are new technologies such as RPA, DLT, Ml, and AI changing the tax function?

Thanks to the fast maturity and commercialization of these technologies and wide-sweeping success stories in tax, these technologies are becoming the new norm for tax functions. Figure 1 spells out the tasks for which each of these technologies is typically used.

Strategic Decisions

There are a few instrumental considerations before tax departments embark on a journey of technology implementation:

Infrastructure. As a number one foundation, the organization will define a scalable tax technology environment that collaborates with solutions such as ETL (extract, transform, and load) applications, RPA, ML, and the IoT (internet of things). Whether it's a firm-wide strategy or a tax-centric initiative, we see the most successful programs starting when tax and information technology leaders proactively define technical infrastructure and its supporting models, including security, resilience, scalability, governance, and risk management.

Process. This is the task of creating the overall vision for tax processes and establishing enterprise process governance, control, and ownership. Before selecting particular tech vendors or creating any solution, it's crucial to spend time analyzing the repeatable, manual, and high-risk tax functions in order to create a shared vision of the end-to-end future state. This analysis phase is also the best time to establish process performance measurements as barometers of improvement and future success.

Data. Creating a modern data architecture that enables tax data accessibility and analytical insights is essential. This is fundamental to breaking tax function silos and implementing true tax process integration. Different parts of an organization often adopt different content management systems (CMS). Data accessibility, in this context, means the ability to integrate those...