Finance professionals have a reputation for perhaps being reluctant to adopt new technologies; only three years ago, 60% of tax departments expressed a clear preference for desktop tax applications over cloud-based solutions. Fast forward to today and it’s a very different story with organisations looking to transform their tax functions and take advantage of new cloud-powered capabilities, argues Russell Gammon, Chief Solutions Officer at Tax Systems.
What’s driving this transformation?
Today, there is a wider choice than ever when it comes to selecting a versatile and effective cloud-based Software-as-a-Service (SaaS) tax tool. That’s because the overall momentum of the cloud computing industry has had a notable effect and more professionals are happy to invest in a convenient subscription model where they only pay for what they use with minimal upfront investment.
Cloud solutions also deliver superior performance, service levels, and security compared to traditional software and hardware infrastructure. The benefits are numerous, and the case for cloud and SaaS has become so compelling that it has pushed the global software market to nearly $250 billion in revenue this year.
When you combine this momentum with industry changes, such as the government’s newly announced “Digital Transformation Roadmap”, it’s easy to see why tax departments and professionals are looking more closely at cloud-based solutions.
In this environment, modern cloud-based solutions have become a major asset for the tax function, primarily by giving professionals real-time access to essential information, along with the tools needed to optimise efficiency and output. Without these dynamic, feature-rich cloud tools that foster closer collaboration, teams are more likely to work in isolation, relying on repetitive and time-consuming processes that hinder productivity.
The simplicity of the cloud
When tax software remained in-house, it usually entailed a big investment in management or an outsourcing agreement. Additionally, with on-premise software, there is an internal IT burden for corporates, with teams required to deploy and test solutions before using them in production.
The use of cloud technology makes everything more cost-effective. Think of how time-consuming and costly it used to be deploying traditional desktop solutions across an enterprise. Now, with SaaS new services and updates can be rolled out at the touch of a button while transitioning IT expense from CapEx to OpEx.
The cloud is also empowering tax professionals to leverage cutting-edge technology to enhance everything from accuracy to efficiency. Notably, cloud-based AI and automation tools are already transforming the way tax departments operate. In the coming years, these technologies will undoubtedly drive innovation, as organisations use them to improve analysis, provide deeper insights, and automate routine, repetitive tasks.
Security and sustainability
As with other finance functions, data protection and cybersecurity are of critical importance for the tax team. That’s why most established cloud platforms provide high levels of security, data protection and backup services as part of their offering, most of which meet industry standards, such as ISO 27001. This helps ensure compliance needs are met and that your company’s wider security posture is not at risk.
At the same time, cloud-based services can help organisations meet sustainability requirements. By removing the need for physical servers, companies can meet environmental objectives more quickly: a study showed that the Microsoft Azure cloud platform was 93 percent more energy efficient and 98 percent more carbon efficient than on-premises solutions.
Managing the migration
Investing in cloud-based services is not just switching from one technology delivery model to another, it also relies on senior management support and wider user education. Most cloud-based tools are intuitive and easy to use, with training resources baked in – which can be supplemented with additional guidance and support available if required. All of this helps users understand how new services integrate with existing processes, giving them confidence.
Finding the right partner is such an important part of the wider process; they can ensure a frictionless migration that minimises the impact of such a significant change in technology infrastructure. They can also help protect data integrity during the migration with safeguards in place to ensure consistency across platforms. Without such defences, there is the risk that valuable data could be damaged, leaked or lost forever, with all the compliance implications that goes with such an error.
As the landscape continues to evolve in the coming years, technology-driven innovation will become increasingly important to tax industry workers. Companies that have already welcomed the potential of the cloud will be best placed to embrace the efficiency, automation and productivity opportunities provided by new tax solutions.