Eight ways tax leaders can integrate AI in their departments
The Future of Professional Report highlights that Generative AI will have a significant impact on business strategies. 94% of C-suite executives believe it will significantly alter their plans. To succeed in a rapidly changing digital landscape, corporate tax leaders must embrace GenAI and integrate it. Effective integration requires planning and preparation. Tax organizations need the right knowledge, tools, and strategies to leverage this technology effectively. Corporate tax leaders can gain a competitive edge in the digital age by following these eight actionable tips, derived from The Future of Professionals Report. Conduct a comprehensive assessment of your team’s skills and capabilities. The Thomson Reuters Corporate Tax Department Technology Report 2024 revealed that many tax departments lacked sufficient technology expertise. This hindered their ability to adopt GenAI and other new technologies. To overcome this challenge, identify the key technology skills needed for integration into the tax function. These include data analytics, cloud computing, artificial intelligence, and programming. Assess your team members’ current proficiency in these skills through various methods and create a skills matrix outlining required competencies for various roles within the tax department.
Use this matrix to identify skill gaps and develop targeted training plans. Make informed hiring decisions for individuals with the skills needed to lead tax integration project. Regularly update your skills assessment process to stay current with emerging technologies and maintain your tax department’s position at the forefront of transformation.
2. Foster a culture that encourages continuous learning.
According to the Thomson Reuters Corporate Tax Department Technology Report, tax professionals may not receive technology training at the frequency they desire. To close this gap, organizations need to prioritize customized and continuous training programs which equip employees with skills necessary to thrive in the era of GenAI. For successful integration, develop customized training programs focusing on critical thinking, problem-solving, and communication skills.
Create a dynamic environment that fosters innovation and improvement. Recognize and reward employees for their commitment to ongoing learning and encourage knowledge sharing and collaboration among team members.
Technology can strengthen your corporate tax team. By investing in the development of their workforce, tax departments will remain flexible, adaptable and well-equipped to navigate an ever-changing tax landscape.
3. Establish clear principles to ensure responsible AI use. To maximize its benefits and minimize risks, establish guidelines and principles for responsible AI usage in tax functions. To keep up with the evolving technology and regulatory requirements, you should regularly review and update AI Principles. Define the purpose and intended outcomes of GenAI integration in tax functions and integrate robust security measures to safeguard data and protect against potential vulnerabilities.
Establish data governance and privacy protocols to ensure compliance with relevant regulations, and test and validate GenAI systems for accuracy, reliability, and bias. Businesses can create a culture that encourages responsible AI usage by setting and adhering clear guidelines. This will drive innovation while minimizing potential risks. Integrate pilot projects
Despite low current adoption rates of AI in tax departments, there’s significant interest in exploring its potential (source: 2024 Corporate Tax Department Technology Report). Identify GenAI use cases to begin the tax transformation journey. Examples include automating routine tasks, improving data analysis, and generating insights from unstructured information. Set clear goals and success metric for each pilot project. Collaborate with tech partners who are knowledgeable in AI and tax. Involve stakeholders from across the organization, including tax professionals, IT, and business leaders.
Starting with small-scale pilot projects allows businesses to experiment, identify challenges, and refine their approach before embarking on larger initiatives.
5. Create a task force
Effective GenAI integration within the tax department requires a collaborative and coordinated approach.
The Thomson Reuters Corporate Tax Department Technology Report found that only half of the respondents had a designated point person for technology strategy, highlighting the need to centralize GenAI-related efforts. Define the task force’s mandate, scope and goals to ensure its success. Identify key stakeholders and members with diverse expertise from various departments and allocate sufficient resources and support to enable the task force’s work.
Establish regular meetings and communication channels to facilitate collaboration and monitor progress and evaluate the effectiveness of the task force’s initiatives. A dedicated task force can foster innovation, drive GenAI integration and adoption, and ensure a coordinated approach to leveraging this transformative technology.
6. Develop a strategic planning plan.
To ensure that GenAI is successfully integrated and adopted within the tax department develop a comprehensive strategy plan. Define a vision that is aligned with the organization’s goals and set SMART goals (Specific Measurable Achievable Relevant Time-bound). Budget, technology and skilled personnel are all resources that must be allocated. Develop a detailed timeline with milestones to track progress and ensure accountability.
Regularly review and adapt the plan based on feedback and changing circumstances. A well-crafted strategy plan will help tax departments navigate the rapidly changing digital transformation landscape, and maximize the potential of GenAI. Establishing metrics to measure success
Establishing metrics to measure the long-term impact of AI in corporate tax departments is critical, especially given that the
2024 Thomson Corporate Tax Department Technology Report revealed that 73% of departments don’t track technology success metrics. Tax departments should develop performance metrics that are tailored to their AI integrations in order to close this gap. These could include quantifiable measures such as time saved on routine tasks, accuracy improvements in tax calculations, or cost reductions.
Integrating a system of continuous assessment is equally important, allowing departments to regularly evaluate the effectiveness of their AI tools and make necessary adjustments. This continuous monitoring helps identify areas of improvement and ensures AI solutions are aligned with changing business needs and regulations. Furthermore, insights gained from this rigorous tracking can inform future planning, enabling tax departments to make data-driven decisions about AI strategies and investments.
8. Communicate the value of AI
Effectively communicating the value of AI to stakeholders within an organization is essential for successful digital integration. Explain the benefits of AI, and how it could impact the tax function and the overall business. Showcase successful use cases and pilot projects within the organization, and regularly communicate progress, successes, and challenges related to AI initiatives.
Highlight AI’s ability to enhance efficiency, accuracy, and productivity, and emphasize how it can provide valuable insights and predictions by analyzing large volumes of data. By demonstrating AI’s positive impact, corporate tax leaders can foster a culture of innovation and drive successful AI integration and adoption within their organizations.
Prepare for the impact of new technologies
Cultivating a culture of innovation in a corporate tax department can bring numerous benefits. It can help attract and retain top talent, improve problem-solving skills, and develop more effective strategies. This approach improves employee satisfaction and engagement while boosting the department’s reputation and credibility both internally and externally.
Furthermore, a culture of innovation can lead to cost savings and increased profitability through process improvements and new revenue streams. By fostering a culture of innovation and integrating new technologies, tax departments can improve their efficiency, accuracy and productivity, as well as their overall success. This will ultimately contribute to the company’s growth in the digital age.
