Writing a set of objectives is not that difficult. I have proven that in My Blog of February 18 about “Setting The Objectives Of The Indirect Tax Function“. It is only a paper exercise without any execution.
Why? At the moment that these objectives are validated, specific goals have to be set within these boundaries. The goals have to be specific, measurable, acceptable, realistic and timely (SMART goals).
You need to know where you want to go and set up a roadmap how to get there. Benchmark against trends in the market might be supportive in your aim. It provides an overview of the experiences of others and is useful for setting own priorities going forward. This is the first step, measuring ongoing performance the next.
The Indirect Tax Strategic Plan has various building blocks. The benchmark findings I gathered are categorized accordingly to make it more user-friendly. Have fun with the silent movie. Feedback is appreciated and can be provided below.
It is always interesting to get insight of what others have experienced for own validation purposes. However, it remains essential to determine the own current state. There are many ways but I like a self assessment. I have included a self assessment in this Blog. Check it out, share and/or use it. Let me know if you need any help.
Access the self assessment survey:
The One Minute Manager Solution
If you know 1) the current state, 2) where you want to go and 3) have set up a roadmap how to get there, it is important to have a clear view about what is needed to meet these goals.
Someone wrote in literature that the first step to improve indirect tax management is to put someone in charge. Is it that easy or is that an example of one minute managership?
Assume that the significant majority of the findings of the movie are applicable to your organization. Do you want to have end responsibility under these circumstances? Is delegating end responsibility to a new recruited global or regional leader going to contribute any positive change?
Having the responsibility without the tools is like being Michael Schumacher without a car. Not likely you are going to win a Formula One race. That means an unhappy Michael.
Making somebody (else) responsible is not the solution. Some defects of the movie are the cause effect of other defects. The root cause is likely the company’s organizational structure, overall business processes and/or maybe a wrong perception of the executive about tax (in general).
I mentioned in my Blog of February 18 that ‘Top down’ approach and a flavor of “Jack’s boundarylessness” are conditional for successfully implement change. In stead of making somebody in charge, the first step for improvement is probably to get the right message across to the executive in a language that they speak.
Managing The Environment
In my Blog Of February 18, I suggested that a Tax Function of a company should work under the same market principles as external tax advisers and that the clients are the executive, finance, procurement, IT, logistics, internal audit, HR, legal etc. I like to share my thoughts behind this.
Benchmark Of Negative And Positive Experiences
The position of an adviser becomes much easier at the moment the client has faced a negative experience such as a tax audit or logistics problems due to indirect tax formalities not being fulfilled. Sometimes not having (yet) the end responsibility might give more flexibility to maneuver in the matter, facilitate realizing short term goals and future positioning (e.g. end responsibility). If Finance & Accounting is accountable a negative experience might open possibilities to build strong relationships (e.g. Tax Function: business alignment, internal audit etc) without a shift of responsibilities. Negative experiences but also positive experiences (e.g. (the first and final) assessments, the amount of savings) would be something to register ongoing and communicate effectively within the organization. These are the benchmark findings of your own company and extremely useful for your strategy moving forward.
Understanding The Client Behind The Client
In other circumstances advisers like phased approaches. It has commercial reasons as it give possibilities to build long term relationships but also facilitates easier buy-in from the client. I favor this approach. It is a way to truly connect (e.g. Tax function: alignment with business, Head of Tax, internal audit, IT, procurement etc).
Either the adviser uses his practical experience or has access to benchmark material. Keep it manageable (e.g. scope) and alway take in considerations the priorities of the client. Know his game plan – challenge where necessary – but also try to get a good understanding of his own internal clients. Build together a business case, set the conditions for success and measure what can be saved (e.g. money saved or hours lost due to rework).
Why is the above important? If such an approach is successful between client and adviser, why can it not be used by clients themselves as an effective way of internal communication and collaboration. It might give the necessary insight about the client behind the client which could be “the executive”.
Next Blog Topic
As indirect tax resources are in practice scarce it is important that the available time is used in the most efficient and effective way. Next Blog will be about being efficient and effective at the same time and includes the executive and the company’s risk appetite.
Richard Cornelisse is CEO of the KEY Group and worked previously as Big4 Partner in the Tax Performance Advisory and Indirect Tax Practice and blogs on Tax Function Effectiveness and Tax Control Framework developments.