Tax teams get agile
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Tax teams get agile

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Agile development methodology concept on virtual screen. Technology concept.

Tax and finance teams are adopting a working methodology pioneered by the tech world, says Peter Boerhof of Vertex

‘Agile’ is a term we are hearing more and more in the world of work today, particularly in the tech space. Increasingly, this way of working and project management is being employed by other businesses and departments too, outside IT.

Since 2001, software developers have been using agile to describe their approach to work, giving rise to what is known today as the ‘agile methodology’. Agile is an iterative style of project management that, first and foremost, puts team collaboration on centre stage. As digital transformation takes hold across industries, the methodology is now influencing, and in some cases reshaping, the way other departments work. And tax and finance teams are no different.

Introducing agile

Usually working in a series of small manageable projects, the agile methodology was created by the developers of the early 2000s to allow for a more effective and customer-centric approach to their work. Rooted in what is known as the ‘agile manifesto’ principles, a strong emphasis is placed on team communication, listening to customers, responding to feedback, and adapting planning as you go.

Additionally, the methodology uses ‘scrums’ to organise work into time-boxed iterations called ‘sprints’. Within each scrum – a name taken from rugby, to reflect the collaboration and teamwork required to reach a collective goal – there are specific roles assigned to each team member, including scrum master, product owner, and developer. Scrums also comprise ‘ceremonies’, including daily stand-up meetings and reviews. The aim of a successful sprint is to ensure that projects are manageable, achievable, and reflected upon at the end, which can then inform the planning for the next one.

Agile for tax and finance teams

Fast forward to today and agile is making its way into other industries. The reasons for this are twofold. First, the impact and influence of IT departments has grown exponentially in the past decade within every business division and department. This is especially true for tax and finance functions, where digitalisation and the role of technology have become increasingly important, especially where tax engines are being implemented. Secondly, tax teams and other business departments are implementing agile, autonomously of IT departments, simply because the methodology works and has far-reaching benefits. These include:

  • Improved risk management – the ability to continuously monitor and adapt to changing circumstances can help to identify and mitigate financial risk more effectively;

  • Enhanced customer satisfaction – agile methodologies prioritise customer needs and lead to improved finance and tax products and services that will ultimately meet clients’ expectations; and

  • Faster decision making – agile’s iterative approach enables informed decisions to be made quickly, helping businesses to respond to market changes promptly.

Yet despite these seemingly immediate advantages, agile should not be considered short term only. For businesses implementing SAP S/4HANA, for example, the lengthy processes involved, often spanning several years, lend themselves to an agile way of working because the implementation process is so rarely straightforward. Adaptive planning and being responsive to change is a necessary part of this process. Yet for tax specialists who will be instrumental in these implementations, agile is a new way of working that may feel uncomfortable. Culturally, shifting from a traditional, hierarchical approach to an agile mindset requires significant change in the business.

Challenges

Tax and finance functions have had to adapt considerably in the past decade, as technology implementations have increased. These technological changes have seen great efficiencies and improvements in the way people work, but they have also meant that the skills of the tax specialist have needed to change, along with the ways in which projects are managed and coordinated, such as through the implementation of agile. A recent Vertex global survey of 580 tax specialists found that 36% of respondents see having the relevant skills in place as the biggest barrier to indirect tax compliance. And this skills gap looks set to increase as the connection between tax and tech teams grows.

Agile is not a silver bullet for all departments, and tax teams can struggle to work successfully with the methodology. One issue is that tax departments must work within regulatory constraints; the highly regulated nature of tax, where strict deadlines must be met to remain compliant, can be at odds with the agile approach.

Adopting an agile approach

If you are adopting this way of working, appointing a strong project manager is a necessity, someone who can drive sprints forward but also inspire the team to stick with the methodology. Communication and continually receiving feedback about how the sprint is progressing will help to keep projects on track.

As tax departments and tech teams work more closely together, adopting proven working practices will become more common. Agile offers a way to enhance collaboration, improve efficiency, and encourage resilience and adaptability within teams.

Agile ultimately aims to deliver value to customers more efficiently and is a way of managing projects effectively. This is just one example of cross-departmental learning, and for tax teams, whose roles as tax technologists will advance in the future, listening to, and learning from, other departments is something we should all be open to in order to secure the best possible outcomes.

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