Deloitte: Technology Becomes an Increasingly Important Driver for Achieving Competitive Advantage

Due to the accelerated digitalization in the business environment, data is becoming increasingly accessible for access and analysis. This change, like all others, equally affects the tax function, with public and tax authorities in countries across Central Europe utilizing digital technologies to ensure that taxpayers align their operations with the increasingly complex legal requirements in force in tax regimes.

To assist the business community in understanding relevant factors, likely effects, and the strategic approach of individual business entities, Deloitte recently published the results of a survey conducted among more than 120 senior financial and tax executives from Central Europe in its Tax Technology Report.

– The survey results clearly show how tax teams are striving to develop and implement new technologies with the aim of achieving greater efficiency and contributing to overall business operations. Technology is becoming an increasingly important driver for achieving competitive advantage, which means that tax executives must deepen their understanding of those aspects of reporting that are related to technology – emphasizes Natko Sertić, head of Deloitte’s Tax Department in Croatia and chief tax partner for the CE South region.

The report is aimed at helping tax executives achieve this goal by encompassing various areas that need to be considered. These areas include factors and challenges relevant to decision-making regarding the selection of technologies to invest in, issues related to meeting digital tax requirements, the implementation and upgrading of enterprise resource planning (ERP) systems, and how companies utilize technologies to support the tax function.

Key findings of the report include:

• More than half (56 percent) of respondents are proactively involved in modernizing certain systems, processes, and even entire architectures.
• Leveraging more complex digital transformation programs that are already underway and implementing next-generation ERP systems can help tax teams manage the growing demands for digitalization in taxes.
• One-third of respondents plan to change their operational model by outsourcing ancillary technologies and processes.
• More than half of respondents plan to implement business intelligence dashboards and customized data management tools.

According to Helena Schmidt, head of Deloitte’s Croatian office and partner in the Tax Department, a significant gap is emerging between companies that are most and least active in this area.

– Although more than half of our respondents (56 percent) are taking active steps regarding their organizations’ tax strategies, a significant minority are not. Half of them believe that the reason for this is a lack of time and resources. Furthermore, 60 percent of respondents do not plan or, at best, are only considering the introduction of enterprise resource planning (ERP) systems that would help them address the challenges of digitalization in taxes.

If our research helps tax leaders understand and address these challenges, it will achieve its purpose. We believe that our report will assist a greater number of tax leaders to consider and take action to address these challenges, as understanding and readiness of management structures is one of the most critical factors for the success of digitalization – concluded Schmidt.