Leveraging Big Data in the Modern Tax Function
by Terri Eyden on
On an operational level, these solutions may be used help identify processes that previously experienced significant or repeated delays in order to proactively implement improvements and plan work appropriately. From a risk management perspective, utilizing the output of this type of analysis can reduce the occurrence of missed or late filings. These solutions are designed to use data to make better business decisions and can significantly improve both the quality of the information and reporting that comes out of the tax department as well as increasing its overall efficiency.
While the tools mentioned provide a wealth of capabilities, they are often best suited for structured data and sometimes struggle with the increasing volume of data captured by modern organizations. Data discovery is a growing new segment of business intelligence, which offers innovative technologies that leverage advanced processing to produce effective performance when analyzing the huge volume of big data. In a report published on June 17, 2011, Gartner states: "These data discovery alternatives to traditional BI platforms offer highly interactive and graphical user interfaces built on in-memory architectures to address business users' unmet ease-of-use and rapid deployment needs." This report further highlights the use of data discovery tools to address specific requirements of smaller workgroups that are most often addressed through manual data analysis and spreadsheets today.
These tools offer the option to function in a self-service model, which eliminates the need for the technical expertise of the IT department. Data discovery includes the capability for search-based discovery tools that can take advantage of unstructured data through the use of text-search inputs that can find the important information among reams of documents, e-mails, and notices. Where BI tools are traditionally oriented to the needs of an entire organization and implemented at an enterprise level, data discovery tools are focused on the individual business user.
Data discovery can be leveraged to address specific needs within a particular workgroup, such as analyzing tax department performance during prior tax cycles to identify opportunities for improvement. A number of companies are emerging to offer suites of data visualization tools that provide interactive graphical results built on top of BI-based analytics and reporting. These visually oriented outputs provide meaningful insights into complex information in a way that is intuitive for human consumption and can be easily presented to stakeholders at all levels. This is much more impactful than the traditional spreadsheet-based reports that have historically been the output of tax analysis and reporting.
Web-enabled portals for data access and tracking
At the front end of data management, a web-enabled portal takes full advantage of the carefully collected and organized data. The analysis offered by the previously mentioned tools is brought into a central view that offers increased opportunities for collaboration through shared data and reporting both within the tax department and beyond.
Portals utilize standard processes and queries that ensure all users of the data are receiving current, consistent information. With the growing international scope of business today, this type of collaboration becomes even more critical to ensuring that tax builds a relationship with the global organization to assist in managing the expanding compliance and reporting requirements of multiple jurisdictions.
Operationally, portals can also help reduce the amount of paper mailings to organization stakeholders, enabling quicker dissemination of information and allowing for reliable tracking and analysis of these activities. Stakeholder information can be managed directly within portals as well, which reduces the administrative burden on the tax department and allows data to flow directly to the data warehouse for use in analysis and reporting.
Going one step further, by leveraging the Internet, portals can support connections to external applications or third-party vendors for specialized features or calculations not available in-house. Along similar lines, portals allow for increased transparency where desired by allowing organizations to make relevant data available to investors, customers, management, or regulators.
From a risk-management perspective, the use of encryption in a web-enabled portal increases security of private data and provides auditability through website logs and tracking of data requests, submissions, and other transactions. These logs and other audit information are prime examples of unstructured big data that can then be accessed through data discovery and BI tools to provide insight into investor and stakeholder activities as well as maintaining an electronic record of who received or submitted what and when.