TEI Robotics and Digital Automation May 3, 2017
Discussion topics Today s speakers Why are we here? RPA Overview Tax Operations Portal, Content Management and Workflow RPA/Workflow Example Analytics Susan Bennett, Partner, Americas Tax Director Engineering & Construction Daren Campbell Partner, Americas Tax Technology and Data Analytics Leader Travis Fox Partner, Portal and Content Management Leader TEI Robotics and Digital Automation 2
Why are we here? Trends & Disrupters TEI Robotics and Digital Automation 3
The Future of Work Technology as a solution and a challenge Automation of the work force Changing global workforces New workforce competency requirements TEI Robotics and Digital Automation 4
Digital Tax Evolution... External Drivers & Disrupters TEI Robotics and Digital Automation 5
Data challenge and the tax TEI Robotics and Digital Automation 6
Role of data in effective tax operations Data are the life blood of decision making and the raw material for accountability The United Nations Secretary-General s Independent Expert Advisory Group on Data Analytics Tax functions are the heaviest users of enterprise data. Tax processes and enabling technology are built based on the quality of data received from the enterprise. Tax technical knowledge and creativity has outpaced tax functions ability to support the tax positions largely due to supporting data. The quality and, therefore, the value delivered by tax operations is directly impacted by the data flowing into tax processes and enabling technology. Tax owns no data and has little influence over the systems and processes that record transactions. TEI Robotics and Digital Automation 7
Tax data goals One version of the truth Maintain data integrity and accuracy Reduce data collection and reconciliation efforts Eliminate manual data manipulation Enhance reporting process and analysis Business intelligence and emerging reporting Increase enterprise value common goals with different solutions TEI Robotics and Digital Automation 8
Tax technology ecosystem TEI Robotics and Digital Automation 9
RPA Overview TEI Robotics and Digital Automation 10
The virtual robotic workforce is transforming how organizations move data, operate and engage customers Robots link capabilities together to simplify, accelerate efficiency and provide flexibility In-house mainframe Core account management Transaction processing Core accounting Reporting Enterprise automation Workflow and rules Imaging Digital channels Analytics / reporting Collaboration tools Cloud Third-party capabilities Industry utilities Internet / intranet capabilities Data storage Desktop automation Spreadsheets Word documents PDFs Emails Collaboration Data & analytical tools Create sustainable operations in a heightened quality and customer-centric environment Unwind legacy of people-based quick fixes Perform laborious and repetitive tasks reliably Scale up and down to match peak loads Emulate the best business user behavior Shift control toward the business and reduce reliance on IT to get things done Deliver ROI in weeks through a rapid, agile approach Robotics enables organizations to automate existing high volume and/or complex data handling actions as if the business users were doing the work. TEI Robotics and Digital Automation 11
RPA has been a CATALYST for standardization and reimagining and transforming our processes TEI Robotics and Digital Automation 12
Case study: sales and use tax The challenge A significant amount of time is required each month to review tax determinations, leaving little time for review resulting in a ~40% error rate. Why automation Mitigate tax compliance risk Reduce costs Decrease resources allocated to manual processes Increase time allocated to review Eliminate reverse audit fees Accelerate learning agility of tax talent What we did Used Automation Anywhere to automate the download of the data, the preparation of the review workbooks, the download of invoices and the preparation of exemption certificates Outcome Significant time savings, increased speed, accuracy and efficiency (less manual keying of data) Teams were able to spend more time on review and less time on preparation (better leverage of knowledge worker skills) Reduced labor cost Reduced human errors Human Setup folders, workflow and download SAP data Robot Prepare review workbook, including identification of erroneous tax codes Download invoices Review invoices and pull additional ad hoc documentation Populate exemption certificates and prepare vendor emails Review emails and documentation and send emails TEI Robotics and Digital Automation 13
Range of benefits realized among adopters Filing and e-filing (Majority of areas) Include e-filing with the relevant tax authorities* and any third-party software (i.e., ONESOURCE, CorpTax) *Some jurisdictions many not allow BOTs to interact with all steps of the filing processes Printing to PDFs / audit-ready file creation (All areas) Retention and rollover (All areas) Put filings and supporting document in content and workflow management software systems (i.e., SharePoint, EY OneSpace, shared drive) Submit e- filings through government websites this should be above Rollover of balances (e.g. Fixed assets, Accruals) Create work papers for next filing period and distribute information via mailings Run standard reports and organize work papers to produce an audit-ready file for storage Distribute reports across department(s) Gathering relevant data for printing and emailing check requests 6 7 5 1 4 Data collection and manipulation (All areas) Log on to multiple systems to download general ledger or other systems data Combine files together and perform data validation via defined criteria Reformat/standardize date for import into work papers or other systems Map data, looking for exceptions, % variances and inform data providers of any issues via automatically generated email Support work paper development (Majority of areas) Gather data from systems. databases, excel or other report types from various groups Conform reports into supporting work papers for tax adjustments Calculations and form production (Majority of areas) Compute data to generate amounts and populate to appropriate form locations Look up and apply withholding tax rates, foreign currency / exchange rates on specified dates or periods Generate final form for review Review and analysis (All areas) 2 3 Selectively pull amounts for analysis and input into another work paper like Excel Compare amounts from multiple periods or sources and flag exceptions by performing reconciliations; threshold checks Business / functional areas 1. Sales & Use 2. VAT/GST 3. Property Tax 4. Customs & Trade 6. State Income Tax 7. Federal Tax 8. Tax Accounting and Reporting 11. Individual Tax Compliance 12. Withholding Taxes Tax processes that involve high volume, repetitive tasks and recurring deadlines are ideal for BOT implementation. 5. Work Opportunity Tax Credits 9. Transfer Pricing 10. International Taxes TEI Robotics and Digital Automation 14
What are MYTHS and REALITIES when it comes to RPA implementation? MYTH: Robotics will fix outdated or inefficient processes MYTH: All processes can be improved with RPA MYTH: Robots will replace the workforce REALITY: Process costs are reduced by 25%-40% REALITY: Significant increase in processing speed REALITY: RPA is a technology overlay, that ties together legacy fragmented systems through automation REALITY: Human workforce increases focus on results, analytics and relationships TEI Robotics and Digital Automation 15
Our experience Corporate Income Tax Global Tax Reporting Corporate Tax Provision VAT Tax Sales & Use Tax WOTC Credit Property Tax Mobility Tax Fiduciary Trust Tax Asset Management 100 +BOTs, implementing at a rate of 40 BOTs a quarter and pace is accelerating Applied to >200 tax processes some very complex ~600,000 hrs saved Uploading Filing Printing Data input Run reports Reconcile RPA has been a catalyst for identifying 200+ process improvements too Sustained business impact - Driving value for our people, clients & the firm Define strategy and set desired outcomes & targets early in the process Perform the proper analysis to target & prioritize the right processes Start small and build upon automated processes Involve IT early Improve processes before applying automation Establish the right governance model Establish & execute a strong change management plan TEI Robotics and Digital Automation 16
Tax Operations Portal, Content Management, and Workflow TEI Robotics and Digital Automation 17
Tax department data challenge Access, control and transparency to operational data and content Difficulty managing and locating final versions of critical documents Inadequate information-sharing across tax functions and geographic locations Excess time and effort spent focusing on administration and manual tracking Redundant and email-intensive data collection methods Disparate data collection and other unstructured data Lack of visibility and oversight of deadlines, deliverable status and resource allocation TEI Robotics and Digital Automation 18
Global Tax Operations Portal (GTOP) What is it? Web-based portal comprised of tax process applications developed on SharePoint to manage and streamline tax operations What does it do? Provides a single platform to share information and connect cross-functional tax operations and services Transformed document management Process automation and workflow Dash-boarding and business analytics What are the benefits? Rapid deployment Web-based access, transparency, automation Reduce manual processes Enhanced operational controls Common Portal Apps Foundation Compliance Manager Notice Tracker Audit Manager Data Collection TEI Robotics and Digital Automation 19
GTOP benefits PROCESS Automate the flow of data and documents Reduce time-consuming and manual processes Operate within a single, flexible and practical application Data Document VISIBILITY Achieve real-time reporting to management Dash-boarding and business analytics features Share information to users outside of Tax Report ACCESS Remove geographical boundaries Facilitate information-sharing across the organization and external parties Transformed, secure repository Advanced search capabilities Workflow GTOP Process Apps Audit Trail Search CONTROL Minimize risks Real-time resource management Secure access to sites and documents Track and manage due dates Managed and administered by Tax TEI Robotics and Digital Automation 20
GTOP architecture TEI Robotics and Digital Automation 21
RPA/Workflow Tax Return Example TEI Robotics and Digital Automation 22
Future state (Demo) of RPA/Workflow/CorpTax Portal Data Collect/Standardize/Centralize Compute/Report/Analyze Deliverables/Archive What should we be doing? How should we be doing it? When should we be doing it? Microsoft Power BI Corptax office Need two-way access points for tax data collection and reporting Tax returns Tax Acctg CbCR Controversy What is everyone doing? Correct process? Are tasks on time? Microsoft Office Audit-ready files archived in portal People, process, technology to create a powerful workforce Bots do the what, freeing up people to answer the why Robotics workforce Traditional workforce Virtual workforce Co-source workforce WORKFLOW Standardization Collaboration Task tracking Just-in-time job aids Process insights Analytics Analytics drive greater insights: Descriptive What happened? Diagnostic Why did it happen? Predictive What will happen? Prescriptive How can we make it happen? TEI Robotics and Digital Automation 23
Analytics TEI Robotics and Digital Automation 24
How analytics and visualizations empower the tax function 1 Risk Mitigation Status Monitoring Complete and Accurate Data Identification and Analysis of Substantive Issues 2 Time Savings Year-over-Year Reviews Identification of Outliers within a Computation Identification of Missing or Inaccurate Data 3 Modeling and Forecasting ETR Modeling Stock Option ETR Impacts TEI Robotics and Digital Automation 25
How analytics and visualizations empower the tax function Analytics/visualizations Data/Business decisions Data collection Data aggregation Managing Data Organized data Reports Calculations TEI Robotics and Digital Automation 26
Risk Mitigation TEI Robotics and Digital Automation 27
Gaining visibility over global tax controversy Global tax controversy Values and benefits Identify of potential tax risks requiring investigation Proactively assign corporate tax resources to assist with controversy Assist with ASC740 reserve process Provide access to local tax controversy and policy professionals contact information Client scenario and how EY helped: The client had no process or central database for monitoring global controversy. The client implemented a quarterly monitoring process and central database that was used to generate a global dashboard. This significantly reduced the time required during quarter-end to validate local tax controversy and the impact on uncertain tax positions. It also facilitated better visibility and the ability for corporate tax to provide assistance to the local finance directors for critical controversy. TEI Robotics and Digital Automation 28
Keeping local subsidiaries compliant Global filing status Values and benefits Monitor that filing deadlines are being met Proactively identify and address at-risk filings Reduce risk of unexpected penalties and interest associated with late filings Improve oversight of out-of-period return to provision adjustments Client scenario and how EY helped: Our client s central tax department had limited visibility over the status of global tax filings. This resulted in returns frequently filed late. In addition, the client s tax accounting team was not timely informed when tax returns were filed, so return to provision adjustments were not always posted in the period the tax return was filed. After implementing a governance and control model supported by a filing status dashboard, the company had measurably improved success of its on-time filing performance with no out-of-period return to provision adjustments. TEI Robotics and Digital Automation 29
Tracking Earnings and Profits (E&P) Highlight countries with significant E&P (or deficits in E&P) and capability to drill down to legal entity detail, by country Select a country to display country/entity detail below. The Earnings and Profits by Country dashboard provides a snapshot of the components of E&P around the globe, highlighting countries/entities with significant E&P (or deficits in E&P). TEI Robotics and Digital Automation 30
Time Savings TEI Robotics and Digital Automation 31
Federal Book to Tax Change Summary Quickly identify major year-over-year change drivers to key components of the tax liability calculation Click on filter fields to view data by entity type, one or more entities, and/or divisions. Click on any bar to view additional information and drill down into further entity/adjustment detail. The Federal Book to Tax Summary (1/2) allows users to quickly identify the largest year-over-year change drivers to pretax book income, permanent and temporary tax adjustments, and taxable income before net operating losses (NOLs) and special deductions. TEI Robotics and Digital Automation 32
State Income Tax Payments Evaluate cash management effectiveness with respect to state income tax payments over multiple years Choose a state and/or entity to view selected payment activity. Hover over any payment field to view a summary of payments for the year. Click on a bar to see overpayment detail below. The State Income Tax Payments dashboard displays a multiyear view of state income tax payments (including prior year overpayments, quarterly ES payments, and payments made with extensions and returns) in order to evaluate cash management effectiveness associated with these payments. TEI Robotics and Digital Automation 33
Federal Taxable Income and Tax Liability Quickly identify major year-over-year change drivers to key components of the tax liability calculation Federal Book to Tax Summary (2/2) allows users to quickly identify the largest year-over-year change drivers to consolidated taxable income, NOLs, federal credits and the tax liability by entity. TEI Robotics and Digital Automation 34
State Income Tax Liability Quickly identify major year-over-year changes to key components of the state income tax liability calculation Hover over any state to view a summary of state taxable income and liability for the year. Click on any amount above or any state on the map to view that state s data in the table below. Choose either an entity view or a view by state, as well as the desired tax year. The State Income Tax Liability dashboard provides an at-a-glance view of the major change drivers in the state income tax liability. Detail by state and entity is also available, including federal taxable income, state modifications and the state tax base. TEI Robotics and Digital Automation 35
State Income Tax Apportionment Analysis Facilitate review of apportionment factors with year-over-year change and capability to view apportionment factor components Choose the apportionment factor to display (sales, payroll, property or overall), as well as the filing type (separate versus unitary/combined). Click on any amount above or any state on the map to view that state s apportionment data in the table below. The State Income Tax Apportionment Analysis dashboard is intended to facilitate review of the state apportionment factors and underlying apportionment data, by state and entity. Users can view the data either as amounts or as percentages. TEI Robotics and Digital Automation 36
State Modifications Highlight state modifications with the largest year-over-year change Click on any amount above or any state on the map to view that state s modification data in the table below. The State Modifications dashboard is intended to facilitate review of the key state modifications. This dashboard displays the largest changes in state modifications with detail by state and entity, along with drill-down capability to the modification details. TEI Robotics and Digital Automation 37
Modeling Forecast TEI Robotics and Digital Automation 38
Effective Tax Rate (ETR) modeling Develop scenario analysis and forecast for interim reporting TEI Robotics and Digital Automation 39
Other Questions TEI Robotics and Digital Automation 40
Thank you!