Tax and Finance Transformation
Self assessment:
Do you have
a compelling
business case?
Almost any significant change
requires a well thought-out
business case. The business case
will likely be the foundation for
approving funds and/or attracting
sponsors from affected teams that
are required to make the change.
Ask yourself the questions on the
following pages to assess if you
have a compelling business case.
Question
Response
Response based insight
1. Have you identified the audiences for the
business case and the factors that drive
their thinking (including alignment with
company strategy)?
 Yes
[response “No”]
Most business cases need to appeal to multiple audiences with the CFO being
just one of the audiences. In some cases, you may have a teaming partner
(e.g., Controller) who needs also need to be reflected. The best business cases
are developed by understanding who the key audience members are for the
business case then crafting it with them in mind.
2. Does your business case identify
efficiencies beyond the elimination of
FTEs/headcount?
 Yes
3. Does your business case include
shortening the time frame in which to do
an important task?
 Yes
4. Does your business case include
speeding up of the production of
deliverables important to non-Tax
audiences?
 Yes
5. Does your business case include risk
mitigation with dollar values associated?
 Yes
6. Does the business case include risk
mitigation for reputation and non-dollar
value items?
 Yes
2
 No
 No
 No
 No
 No
 No
[response “Yes” or “No”]
Few business cases for tax processes are solely based on FTE (Full Time
Equivalents) or headcount savings without some major shift in business (e.g.,
portions of business discontinued/spun-off). In addition to efficiency, consider
how the efficiency translates into other benefits of using the freed-up time
generated by efficiency. Most tax departments can save by concentrating on
support of tax planning or business planning opportunities.
[response “No”]
In many cases, there are benefits from shortening time frames in which to do
activities. For example, changing the work done in a close window for the annual
provision might lead to better analysis and the possible reduction in errors. For
compliance, getting a return done earlier may lead to more attention to business
unit support.
[response “No”]
Better forecasts, quicker planning analysis and other activities that impact the
support of the business and non-tax audiences might be important direct or
derivative benefits of the contemplated change. Consider how these activities
may be compelling not so much to the Tax audience but to the non-Tax audience.
[response “No”]
Material weaknesses, restatements, errors, fines and penalties all have
financial consequences. These are all solid additions to the business case. The
challenge, of course, is predicting something that may not have occurred and
assigning a dollar value to it. Past history is always helpful, e.g.,” in the past
we have litigated transfer pricing issues and the legal and other fees exceeded
$xx million”. Or, calling upon other companies in similar industries and their
experiences, e.g., “Company x had difficulties in a certain area which cost over
$xx million to correct”. Many Tax leaders feel uncomfortable in these areas but
a successful business case at least establishes the need to address and prevent
potential risks. These risks must have a corresponding financial implication
which senior leaders will notice.
[response “No”]
With tax in the spotlight (e.g., BEPS initiatives), it is important to have identified
how the potential change could assist in mitigating reputational risk. For
example, “We need to have the ability to analyze key data throughout the year
and anticipate how that data will generate a tax result that we can explain to the
public before it is analyzed by others.”
Self assessment: Do you have a compelling business case?
Question
Response
Response based insight
7. Does the business case provide value
potential in the area of cash tax savings?
 Yes
[response “No”]
Pairing the particular change with the value of potential cash savings is a key
differentiator for a tax department change over one spearheaded by Finance.
For example, if the change involves getting better data around fixed assets, it
may be reasonable to estimate potential one year or recurring value from tax
opportunities in capitalization, property taxes, credits and incentives, etc.
8. Does the business case address new or
changing requirements to comply with
legal or evolving requirements?
 Yes
9. Does the business case address the
need to replace end-of-life or out dated
technology?
 Yes
10. Does your business case include
elements of how the performance and
retention of the professional will be
enhanced by the change?
 Yes
11. Can you link the cause and effect for
each element of your business case and
explain as briefly as possible?
 Yes
 No
 No
 No
 No
 No
[response “No”]
In some cases, Tax and companies need to invest because they have to do it
now. E.g., adapting to new electronic filing requirements creates technology or
personnel costs. In other situations, it is investing in anticipation of legislation.
E.g., BEPS requirements will soon be adopted by multiple foreign countries
and Tax needs to invest in systems and processes to directly address these
requirements as well as put us in a position to handle the evolving requirements
that will likely occur.
[response “No”]
Technologies evolve and most IT groups are well aware that supporting old
technology is very costly. Although not typically the only element of a business
case, the need to stay current with technology may be an important factor to
assist with the business case.
[response “No”]
Retaining and motivating personnel are often important factors in the overall
performance. Focusing on how the change will enable or create a better working
environment may be hard to quantify but it is none-the-less important in
developing and retaining personnel. Depending on your company’s experience
with turnover and feedback from job satisfaction surveys, this may be a solid
addition to the business case.
[response “No”]
Finally, each element of the business case needs to be understood from the
perspective of cause and effect. Once understood, the business case (or verbal
presentation thereof) needs to be delivered succinctly. For example – “Because
we cannot forecast our 10 largest entities on a legal entity/country basis, our
tax forecasts have been inaccurate and have led to business decisions with
unexpected tax consequences.”
Self assessment: Do you have a compelling business case?
3
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