I'm not trying to cause a big sensation I'm just talkin 'bout my generation --The Who, "My Generation" The Who's 1965 anthem furiously announced the arrival of a new generation whose values differed markedly from those of its predecessors. If current tax function leaders tune in to the thirty- and forty-somethings in their ranks, they'll hear about similarly dramatic changes regarding the technology tools the function will soon need to survive and thrive. Like The Who, they have a blunt message: What earned current tax executives their spot atop the function won't necessarily cut it for future tax leaders.
Future tax executives and their departments will need to attract a new breed of technically skilled talent and implement a new breed of tax data management tools. These needs are being driven by a daunting combination of new compliance requirements, growing compliance risks, a widespread move toward real-time tax reporting, technology transformations and related organizational changes, and heightened audit committee expectations, among other factors.
Current and future tax executives striving to ensure their functions can flourish should understand this new model for success, the drivers behind it, and how they can best address changing talent and technology needs.
A New Leadership Model
If you are a tax leader in your fifties or older, your knowledge of tax technology probably influenced little, if any, of your career ascent. Instead, you likely earned your way to the top because (like me) you demonstrated a capacity to:
* keep the company's effective tax rate low relative to industry competitors;
* work well with your CFO and the audit committee;
* effectively manage your team of professionals, budget, and tax risk; and
* bring strategic value through thoughtful tax-planning ideas.
Although this set of specifications remains necessary, it is no longer complete. The incoming generation of tax vice presidents and leaders will need to be much more technologically savvy than we are, and they will need to seed their function with more technology skills and advanced tools.
When past generations of tax leaders needed a report to be generated from data stored in an accounting system, they simply called up the information technology (IT) people and asked them to produce it. For a variety of reasons, those days will soon be gone.
No Turning Back
Fortunately, tax-technology talent and tools are becoming more readily available. Accounting, law, and specialty financial firms are hiring new graduates who possess the requisite accounting/legal/finance major along with IT minors or significant IT...