COVID-19 has impacted all of us in our personal and professional lives, we decided at CBO Search to launch a series of interviews with the main influencers in Tax Technology and share with our readers how this crisis has affected their work, how they adapted to it and with the ease of the lockdown what the future will be.
It is with great pleasure that we welcome Stephen Francis. Stephen built from the ground up General Electric’s Tax Technology department and has led it for 18 years. Having built a globally diverse team, we asked Stephen to share his experience and views on doing so successfully.
For those who don’t know you, can you introduce yourself?
Sure! My name is Stephen Francis and I live in Princeton, New Jersey. I have been working in tax technology for over 30 years. I started my career at Price Waterhouse. I was also Director of Tax Systems at the General Electric Company between 1997 and 2015 building a team of over 50 tax technology professionals across the globe. The team was a key part of the transaction between PwC and General Electric in 2017. I am currently an Independent Tax Technology Consultant providing services to a several companies.
I know few professionals who have been able to accomplish what you did at General Electric, why did you choose to specialise in Tax automation?
My cynical answer is I got tired of writing long-winded memos on the tax treatment of transactions and then having to bill for it.
I have always been interested in using technology to solve problems. I was using a slide rule through my junior year at university. In the USAF I used a sextant to navigate aircraft around the world. On average it would take 10-15 minutes to do a pre-computation using nautical almanacs and sight reduction tables. I bought a calculator and a marine navigation module and was able to do the computation in a minute. The only problem was the battery was only good for a few hours.
Going back to my cynical answer, around 1985 I was the only professional in the office capable of using a computer (IBM XT) to do spreadsheet modelling. I enjoyed it since it was solving problems. Eventually the office partner, asked me if I wanted to be a tax accountant or a computer guy, as though they were binary choices.
A group within Price Waterhouse already existed to provide technology solutions to corporate clients. It was a leap of faith. I was offered a position based in New York but would have to spend about 6 months in Chicago. It turned out to be a fantastic move. I got far more real tax experience and I got to work with some fantastic professionals. The group was far more diverse than the typical, and I will say, boring tax office. I had great relationships with some of the most prestigious companies in the US.
This is a good story and it illustrates well the fact that to switch to a Tax Technology role involves a leap of faith, I think that is still the case for most tax professionals. What is the most challenging project you worked on?
This is a tough one. Challenging because of technology? People you need to work with? Risk of failure?
One project I remember was when I had only been at GE about 3 years. While we had made great progress in data management we were totally dependent upon our third party software provider. We had a consolidation that included 20,000 general ledger feeds across 1,500 legal entities. We had to prepare a return on a business basis so business tax teams could understand and see their numbers. For filing we had to prepare legal entity pro-formas We also had an accelerated due date of March 15 to have the first cut of consolidated taxable income. The third party system churned for 40 hours before breaking. After a very serious conference call with the vendor it was clear they would not have a fix that met our due date. I grabbed three professionals of what was then a small team. Mike Bakken, Sunil Lakhotia, Nitin Sood are incredible. I explained we needed our own consolidation system…within a week. We already had some robust processes and we used Oracle DB to its maximum potential. Mike addressed business logic, Nitin fine-tuned the Oracle environment and Sunil focused on integrating tax workpapers. I would deal with generating reports that we would have generated from the 3rd party software. What was amazing was the in-house solution took less than one hour to consolidate and was still being used when I retired in April of 2015.
It was not the most technically complex project and we did not have to address any change management roadblocks. It did give us the confidence to take on bigger initiatives and minimise our reliance on third party software.
Sounds like a great project with a strong team! How has diversity changed when it comes to hiring teams in tax technology?
I didn’t think much about it then as one would today and I don’t think I would be the poster child for being an affirmative diversity leader. I only had about 5 people when I joined GE. When measuring diversity across gender, race, ethnicity and religion, it was difficult to create diversity within a small team.
As the team grew my initial hiring focused on recruiting talent from what was then the Big 6 and approaching people I already knew. We also relied on contractors. Our contractor pool was more diverse because they were software engineers first and foremost. The hiring started to become more diverse when I started recruiting through the IMLP, GE’s Information Management Leadership Program. That was a great source. It was a two-year program of four six-month rotations. Usually, the IMLP professionals were supposed to rotate but once we got them into tax, they often stayed. I recruited Aicha Nianzou on the recommendation of Luigi Mascolo. Networking is a critical part of establishing diversity. If Luigi had not been happy with his rotation, he definitely would not have asked me to bring Aicha on a rotation. I think today, it is easier to achieve diversity since there is more talent with different diversity elements who are interested in tax technology.
Today there is a stronger focus on diversity however it is still hard to find candidates satisfying specific criteria, for instance there are more males than females in Tax Technology but I think a shift is beginning to happen. How is diversity applied when working with your team on projects?
Some teams were definitely more diverse than others. The team that focused on non-US reporting was the most diverse in part because they were based outside of the US. The geographical separation of some teams meant we used a lot of audio-conferencing. When we did get together for in-person meetings we took opportunities to enjoy one another differences. We had some interesting political debates. It was a lot of fun.
The pandemic has motivated us to reach out and see how each person is doing. It was great to have a Zoom social hour a few weeks ago. Until recently, I was at Deloitte and it was clear diversity was taking root there.
That is certainly one of the features of the enforced lockdown, despite not sharing an office, we have learnt to get to know each other better and to value diversity. In your opinion, what are the main trends in Tax Automation?
I joined GE in 1997 and left in 2015 and started working independently. My first impression when I met with some companies was that the same issues/complaints that companies had in 1997 are pretty much the same issues/complaints they have today. Excel was the dominant tool used in 1997 and it still is today. There are various digital band aid solutions that tax professionals can use to merge data, shape data, transform data. We talked about AI back in 1997. We are talking about it still. We talked about tax sensitising ERPs in 1997, we are still talking about it today. Most tax departments in 1997 had difficulty having the corporate IT group help them. Nothing has changed.
So if history is any guide for the future, I expect to see more of the same. What I would like to see is much more integration in ERPs. Some trends will also be driven by sovereign jurisdictions as more countries digitise their platforms for more than just e-filing. Indirect tax functions will lead the way.
One interesting observation and I can’t say if it is a trend or an outlier. I’ve seen companies recruit data scientists and software development engineers into the tax organisation.
Data science is a growing area and the last 2 years, we have been working on more roles in that discipline which makes sense given the requests from the authorities and the complexity of businesses. What would be your main advice for someone who wants to start working in Tax Technology?
Find a mentor. There are so many paths into tax technology and it still is a niche area. I think networking is critical. I still stay in contact with many people in the field, not because I have to but because I enjoy it and I miss working with them. If you are lucky you will work in a tax department where you are viewed as a co-leader, not just as an order taker.
One question I am often asked is do you take a tax person and make them a tax technologist or a technology person and turn them into a tax technologist. I always answer yes. The key is to be passionate about the area. It was a leap of faith for me.
The large tax accounting firms are a very good entry route, mostly because you will work with other like-minded people. There are downsides to that as we all know. Hours, travel, admin, time sheets, answering invasive questions about your financial relationships and so on. If you are in a corporate environment and you have been asked to take on a tax technology role you will have other challenges such as collaborating with the larger IT organisation which more often than not views technology resources in the tax function with suspicion.
It is important leadership at the highest level embraces tax technology as a critical role. That includes the CFO and CIO of the company. I could not have been successful without the support of tax leadership allowing me to recruit very talented and motivated professionals.
Many of our assignments start with this question: do we need a tax person or an IT one, the answer depends on the role itself and in some cases either background will work. How has your work and clients assignments changed under COVID-19?
It has not. I’ve just become more adept at using five different video conferencing services and remembering the shortcut for the mute and video switch.
How do you find working from home? Does it come with challenges? Any benefits?
You would have to ask my wife that question for a true answer. I let my son-in-law cut my hair so I probably won’t need a haircut for another 6 months! Since we are empty-nesters, we have plenty of space to spread out so it is not too confining.
I do not miss airline travel one bit.
Did you establish a routine?
Since I am only working part-time I do not need a strict routine. The clients dictate most of my work routine. From an amusing standpoint, I would set the alarm early to get to the grocery store for the senior hours opening only to find out you could not buy beer or wine until senior hours were over!
I am the one that does the shopping. I also let my daughter know I’m going shopping so I can pick up her stuff. You can’t believe how many bananas my grandkids go through! I’ve learned the layout of the grocery stores so I can get in and out pretty quick.
How funny, that would have frustrated me not to be able to buy beer or wine. We hear how important is to maintain a healthy lifestyle and life balance to strengthen the immune system, is this something you have time for?
One tries. I have a personal trainer who I would see twice a week. He is a great guy and works from his home. Covid had a big impact on him. After a few weeks we agreed to do Zoom training. It’s not quite the same but it’s better than nothing. I also have a Pilates trainer which starts up next week. Being at home and living 1/2 mile from my three grandchildren means my daughter can drop them off at our house after school, which she manages to wrap up by 12 noon. That alone keeps you active.
Thank you Stephen, it has been great to hear about your experience, views on diversity and trends. I could not help but notice what you said about excel being the dominant tool and same issues complaints that were present in 1997 remain today. Tax technology projects are about change and as the natural response to change is to resist, communication is a skill that is so important when it comes to implementing technologies and resourcing candidates for it.