There are many advantages of robotic process automation for finance. Yet while some see robotic process automation as a solution to broad tax department woes, often efforts to use robotic process automation fall short of expectations due to mis-perceptions about its full capabilities. Robotic process automation improves workflow between disparate systems but still requires a lot of manual maintenance.
John Viglione, executive vice president at Vertex, discusses with Digital Journal about how robotic process automation can play a role in the finance department and make tax a strategic partner to the digital enterprise.
Digital Journal: How are new technologies shaping finance?
John Viglione: New technologies are disrupting the role, structure, processes and competitive environment for financial institutions and the markets in which they operate. Emerging technologies improve access to data and deeper insights as a result. These forces allow the finance department to be a more strategic asset to the C-suite.
DJ: How can robotic process automation help specifically?
Viglione: RPA can complete rules-based tasks, which enable and automate human-like functions such as interpreting, deciding, acting and learning. It is effectively a workflow technology and can bridge systems that otherwise wouldn’t be able to communicate.
RPA is applicable to the finance function, specifically tax, where manual, repeatable and time-consuming processes are still in effect. Augmenting and/or removing the need for human intervention can reduce costs, accelerate the time it takes to complete work tasks, minimize risks and enable staff to allocate their time to focus on strategic activities.
DJ: How mature is this technology?
Viglione: RPA is a mature technology, but still requires human intervention. RPA can’t structure data so humans need to ensure data is clean and properly structured on the front end. RPA also can’t deal with exceptions—IT teams need to intervene and create rules for exceptions. With this type of attention, you can gradually teach and configure RPA to do more. Before implementation, start with a controlled experiment on a visible pain point, evaluate if it’s stable, mature, repetitive and high-volume, and then test RPA.
DJ: What are the current limitations with robotic process automation?
Viglione: RPA can be characterized as the “Duct tape” of the digital age—while it is an enabler, it is not a comprehensive solution in itself. It is a workflow technology that looks to automate sharing of information from one system to another.
As mentioned earlier, another limitation is that human intervention is required if changes are needed or the data doesn’t clearly translate between systems.
DJ: How do finance firms need to organize in order to accommodate robotic process automation?
Viglione: As with any technology, they should start by understanding the underlying processes and needs and identifying where there’s a fit. Finance departments should identify where employees are spending time and resources to identify tasks that could more effectively be accomplished with RPA, like transferring data. This is the first place where RPA could be applied.
To maximize use of RPA, the finance department should also structure and standardize data so it’s clean and usable. This way, the RPA is more broadly applicable.
DJ: Are cultural changes needed within companies when integrating such technology?
Viglione: Emerging technologies will play a fundamental role in shaping the financial industry. It’s of paramount importance that organizations understand the workforce changes necessary to capitalize on these innovations and position their organization for future success. Technology like RPA will not only make jobs easier, but it will take away many of the mundane tasks humans have to perform, freeing staff to take on more strategic roles. RPA will augment rather than replace humans in the tax function, as it still relies on human management to oversee operational work.
It will be important for organizations to communicate these changes in a positive way across their teams, so the technology is viewed as what it is—an enabler. Teams will need to focus on higher-value activities. This ultimately boils down to developing a digital mindset, committing to continuous learning and embracing a dynamic business environment.
DJ: What else is needed to create the digital tax department?
Viglione: To keep up with the voluminous, fast-paced, and inconsistent changes to tax policy and administration, the digital tax department needs to ensure that their data is accurate and useable for tax. This means utilizing technologies that prepare reliable and quality-checked data on demand, and leveraging automation and analytics to drive better decision making.
DJ: How does Vertex assist companies achieve such goals?
Viglione: At Vertex, we recognize the power of tax data. When properly utilized, it can improve how organizations large and small do business. Data analytics are a critical element to making the most of this information, but organizations need the right data for analytics to be useful. Vertex’s technology accurately and reliably calculates tax so finance and tax departments can focus on more strategic decision making and planning.
Sales, use and value added tax rates and rules are constantly changing. In fact, our 2017 sales tax rates and rules reported that there were 721 total changes in that year alone. That’s why we automate and centralize the sales and use tax process to streamline tax management across the entire enterprise, for example. This ultimately frees up the tax department to focus on more value-driven and mission-critical tasks while also saving a substantial amount of time and resources for the enterprise.