Embracing technology as a key component of Tax function transformation has introduced the need for Tax professionals to adopt an expanded skill set.
The Taxologist function (also called Tax Technologist) came from an increasing need to bridge the gap between Tax, Finance & IT. This role is relatively new and companies are still in the process of understanding how to make it successful. There is no obvious training for it. LinkedIn has a top 25 for Taxologists, at the top of the chart is Geoff Peck, Chief Taxologist at PawPaw Taxology.
Geoff has been successfully involved with Tax Technology solutions for 15+ years, which is the culmination of a 25+ year IT, ERP and business systems consulting career. He founded a leading Tax solution implementation consulting firm and is now focused on the strategic and effective incorporation of Tax Technology. In this interview, Geoff shares his views on the Taxologist function.
Can you define what is a Taxologist?
Geoff Peck (GP) – This is a good question and there is a no single definition out there. Perhaps this is as it should be, as each organization is different. However, any foundational definition must include causing an efficient and effective adoption of Information Technology as a core capability and facilitator for the Tax function. Inseparable from this is the resulting organizational and behavioural change, which must also be seen within the context of current pressures, both internal and external, for the Tax function to expand and transform its role within the organization.
It is also worth mentioning what a Taxologist is not. For me an implementer of Tax technology products under the guise of Tax Automation is not a Taxologist. Executing an SDLC (systems development life cycle) or an installation is a straightforward IT role. Generally, a project like this results in the automation of an existing tax business process, lacks the necessary closeness to the Tax function and in my eyes is insufficiently transformational in intention to be called Taxology. That is not to say that taking on a major Tax Technology product does not change things because it does – it is just that the nature of that change needs to be better understood, controlled and deliberate.
Where is the Taxologist function coming from?
GP – A web search will reveal the word Taxologist has been around for a long time in a small way. Then, a few years ago, Thomson Reuters instigated the Taxologist as an up-to-date notion, but there is no independent body for Taxology, at least not by this definition.
However, there is another reason for the emergence of the Taxologist as a function, and this relates to the experiences from early adopters of new generation Tax Technology products, especially when applied at a global level. Tax Automation in isolation often proved difficult, distant, and missed delivery expectations. Tax professionals were asked to divulge requirements followed later by user acceptance results before go live, and this was in addition to their regular day jobs. When this started to overwhelm Tax staff, companies began setting up Tax project management offices, or centres of excellence to assist. This was an improvement but again these groups often focussed on individual IT projects or the technology itself and missed the holistic, business-centric view that would really make a difference. Hence, the emergence of the Taxologist.
How often do you hear about this role?
GP – Not as frequently as I would like. Despite the growing clamour for answers, many are still trying to ask the right questions. I have seen job specifications for Taxologists that included no technology component at all. As an industry we need to clarify this role, provide methodologies and create a body of knowledge and experience in this space. I know many companies have falteringly started down this path but to date there is little in the public domain.
Why is the Taxologist job becoming more popular?
GP – Going back even a few years, many Tax departments insisted they were advisory or strategic only, and that in general operations belonged to someone else. At its exaggerated extreme, Tax could be seen as detached and opaque, a staff function populated by clever boffins who spent their time deep in legal minutiae.
Even if only partly true, this no longer washes in the Tax function of today and tomorrow. It must be more cross-functional, process orientated, and needs to support business at more levels within the context of rapidly evolving jurisdictional and operational environments. In addition, they are being asked to eke out more from available resources. Technology is the answer, and this requires the skill set of a Taxologist.
What are the required and desirable skills of a Taxologist?
GP – Another good question and maybe one for which there is no simple answer. The range of possible skills is immense; Tax legal, direct and indirect, transfer pricing, supply chain, finance and accounting, strategic planning, project and application governance, business process mapping, solution architecture, data modelling, team leadership, specific product knowledge, design/configuration, implementation, IT, ERP, organizational adoption, change management, skills matrices and RACI, technical writing, content management, justification, analytical, plus a range of soft skills around relationship management and communication.
However, a great Taxologist, while perhaps not possessing all these skills, will know how to leverage the capabilities of others to scope and realise a vision where a Tax function fully integrated into the organization (now both a line and staff function), has information technology in its DNA without abandoning existing capabilities. For many this will be a long process.
Some say that it is easier to start with a Tax person and teach them IT, but I’ve heard the other way around also. Either is possible, plus of course the Taxologist role can also be fulfilled by a team with a good leader. In fact, the most successful I have seen to date was a team of 3 that included skills from across the spectrum.
What do you see as the main trends for the Indirect Tax function?
GP – We have covered a lot of this already but a key point must be that the Indirect Tax function must be prepared for more change in the future. Everything from OECD (BEPS), e-commerce, big data, jurisdictional IT adoption and beyond can and will have an effect. Indirect Tax must be flexible, in control, and try to stay ahead of the game. The only way to achieve this is to understand, in a formal, documented, and surfaced manner, the organization’s indirect tax footprint, relevant flows, and how they are represented in the systems, data repositories and business processes. This is the starting point, and there are useful tools and methodologies designed to assist, but now we are heading into a whole new topic …