Why Low-Code is the secret to Enterprise Tax Transformation
Article on Forbes.com by
What do you think of when you think about the information technology (IT) at today’s leading retailers? Point of sale systems. Ecommerce sites. Supply chain logistics. Real-time data collection and analysis. All of these areas are ripe for transformation, as retailers struggle to survive in an Amazoned world. However, if you you look across all of the operations of any global retailer, one of its most complex functions is hidden from view.
Retailers’ tax function is so complex because it is so multifaceted: from sales and VAT tax calculations at the point of sale to tax reporting for shareholders to integrating tax functions of acquired companies to calculating income, property, and other taxes, tax challenges are inherently diverse and dynamic.
I spoke with the Director Global Technology of Tax Transformation at a brand-name global retailer. His communications department withheld permission to name him or his employer, so I’ll call him John Smith. Smith has been at the retailer for less than a year after spending 18 of his 20 years at a large consulting firm as Director of Tax Technology and Analytics.
According to Smith, the retailer’s tax transformation initiative is a strategic initiative. “We’re revamping the entire tax function with an emphasis on digital and doing more with less,” Smith explained.
Smith has his work cut out for him. “We were looking at three areas: people, structure, and technology,” Smith said. “Within technology, it was automation, analytics, and tax calculation. All three are interconnected.”
Some parts of the tax challenge touch customers directly. “Tax touches all parts of the company, like it or not,” Smith said, “right down to the receipt. For example, we need to know the diameter of a tire in order to calculate its sales tax properly.”
In other cases, the retailer’s tax challenges are global. “For example, the effective tax rate that goes in the shareholder report,” Smith adds. “It’s a combined number, calculated for the whole company globally. It’s the number shareholders look at.”
Calculating such a number is no mean feat, as it requires both analytics and workflow automation. “You also have to know you’ve collected the right data,” Smith said. “We want to consolidate data stores to make the company more data-centric.”
Low-Code: The Key to the Retailer’s Tax Transformation
Based upon Smith’s experience with low-code platforms at his previous employer, he quickly realized the technology would be a vast improvement over what the retailer’s tax department had in place. “For example, we had a monster application the IT department built on IBM ” Smith said. “Building it took over a year.”
He evaluated several low-code platforms and selected AgilePoint. “I interviewed the usual suspects, but I wasn’t satisfied. That led me to AgilePoint,” he said. “The IBM BPM application had only a slice of the functionality of the application developers built on AgilePoint in four days.”
The four-day app, however, was essentially a proof-of-concept. “It wasn’t a production ready app,” Smith added. “That would take another month.”
AgilePoint isn’t as well-known as other low-code platforms – a fact that Smith is quite aware of. “They were looking into Pegasystems, and document management on Abbyy,” he said. “With Pega you get glossy marketing and a hard-wired system. For what I want to do, Pega wouldn’t work. It’s too hard to customize.”
His team had also compared AgilePoint to Appian, a leading low-code vendor. “One difference between AgilePoint and other usual suspects like Appian is that it supports our focus on consolidating data sources, for example from SAP , Hyperion, and Teradata” Smith explained. “We can reuse data across every branch of tax without having to do the work again.”
Replacing Robotic Process Automation with Low-Code
If you’ve read my recent article on the limitations of Robotic Process Automation (RPA), you won’t be surprised that this retailer had issues with the technology as well.
They had been using RPA to automate invoice processing (among other processes), in concert with a variety of document management systems. “For example, with invoice processing: invoices come into the tax department. We automate separating them from emails, reviewing them, and then providing them to upstream systems,” Smith said. “It takes two bots to consume and review the data, and document management like Kofax, Abbyy, or OpenText .”
However, the brittleness of the RPA approach that I wrote about in my RPA article presented challenges to this retailer as well. “Traditionally, we had to configure the two bots and the document management,” Smith said. “Then we started it all and hoped for the best, but somebody had to manage each bit.”
AgilePoint addressed these issues. “With AgilePoint, I can link all the pieces together. I don’t need the second bot, because I can do the reviewing directly in AgilePoint,” he said. “The document scanner is plugged into AgilePoint and the rest happens in AgilePoint. AgilePoint will execute, control, and monitor bots. We won’t have to use native BluePrism [RPA] tools.”
Low-Code Beyond Tax
The retailer has traditionally depended on hand-coding, but the economics of such traditional development are now working against the company’s priorities. “The complexity of the traditional development approach is too high and we just don’t have the time,” Smith said. “Historically, we said, ‘we are unique, so let’s build not buy.’ I disagree with that, where technology is today.”
Low-code platforms like AgilePoint, Appian, and the others center on empowering and streamlining the work of professional developers, enabling them to customize applications quickly. “The apps are very customizable. To the end-user it’ll look like [one of our apps],” Smith explained. “From the accountant to the senior executive – you’ll be in AgilePoint every day and you won’t even know it.”
Business pressures also continue to drive the retailer’s IT transformation. Its continuing acquisition strategy, for example, emphasizes this fact. “Think about all the acquisitions over the last few years,” Smith added. “If I have an acquisition next year, there’s no way to integrate their tax the traditional way. And it’s only going to get more crazy.”
Smith is now pushing to expand the low-code approach beyond the tax department, in spite of predictable resistance. “Today, we have a next-tech team trying to automate all business functions, not just tax,” he said. “They’re telling me, ‘[John], you’re way ahead of us.’”
Resistance to change or no, Smith is sanguine about the retailer’s transformation prospects. “Everybody is looking for their happy story,” he concluded. They will get their happy story by looking at what we’re doing in tax – but it might take a couple of years.”
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