Episode 3 – Outsourcing & Onboarding

Hello, everyone. Welcome back to the Expert View. Today we’re going to discuss outsourcing again. We looked at it last time with Barbara Barcsik, our Global Director, VAT Compliance & Advisory. Barbara spoke about outsourcing of the VAT compliance function, what businesses should consider if they are looking to outsource. From a cost-saving point of view or flexibility and visibility, all of these great points need to be considered when outsourcing. But today, I’m joined by Eoin Dunphy, our Senior VP of Onboarding. And we’re going to look at outsourcing from an onboarding angle, how to successfully onboard if you have decided to outsource for the VAT compliance function. Eoin, welcome to the Expert View.

Listen, thanks very much, Lisa. And it’s great to be here today. I’ve had a lot of time to think about this and the main areas I’m going to cover today, from my own perspective and indeed where we are on our journey in terms of onboarding people onto our software here within TBI is the project management aspect of onboarding, change management, data and communications. I’m just going to briefly cover those four areas from my own experience and the experience that we have here in TBI. If I start with project management, it sounds very simple. It sounds very straightforward in terms of everybody needs an element of project management in terms of what they do, and especially when it comes to onboarding our implementation projects. So, when it comes to project management, for me, the key aspect is to have a plan, no matter how big or small the implementation is, you need a plan. You need a resourcing plan and you need a governance model to make that successful. So again, it doesn’t matter if it’s a big implementation or a small implementation, but for me, they are the key aspects of a project.

The last time when we spoke about outsourcing, we spoke about the consideration of your own resources and what resources you are going to be able to give to this outsourcing project for VAT compliance. And what benefit it is going to bring to the business. You need to make that assessment and then develop your plan around that based on what you can dedicate from your own resource level and also what your outsourcing provider can bring to the table too.

100%. Resourcing is a key aspect, as you mentioned there. So, from a resourcing perspective, as we know, compliance doesn’t always cover one jurisdiction or one country. It’s cross country across jurisdictions, which means you’re very rarely going to have one resource or one person that knows everything across each of those countries that are involved in the implementation. It’s really about engaging with those people that you’re going to need on this journey and in terms of implementing the software within the organization, engaging with those people, getting them involved, bringing them up to speed on where that journey is going to take them and what time they’re going to be needed within that implementation plan. That’s a very brief summary of the project management aspect. But as I said, it’s whether it’s big or small, you need a project plan and you need to be looking at your governance model and you need to be looking at your resourcing plan.

You need to understand I suppose, the time that’s needed to be dedicated to such a project because there is a myth that outsourcing can be quick and easy, but really it needs time investment, you get over what you put in is that is the point there, and your project needs to be built around what you want to achieve from outsourcing your VAT compliance to third-party provider.

For sure, 120%. So, the project aspect is one element. The second element that I’ll focus on would be the communications plan. A lot of the time when you’re engaged in projects, you only think of the project, you only think of that little ecosystem that you’re in, trying to get things done. But there are a lot more people involved. You have key stakeholders at high levels and lower levels within the organization. But, a lot of the time everybody needs to know what’s happening within this implementation. Like I said earlier, it’s cross country, cross-jurisdiction and having a proper communication plan in place that brings everybody on that journey is paramount for that being successful. You’ll always have communications plans set up within the project itself and within TBI we’re no different. From the get-go, from our kick-off meetings that we have, we introduced the communications plan, how items are going to be discussed and how we’re going to engage with the client on a weekly, monthly, and daily basis. But, a lot of the time, the client will also need to think a little deeper than that and think around how they are going to communicate within their organization themselves, with the key stakeholders and wider functions that may be affected you know, even in a small way.

Yes, and how you’re going to interact with your third-party provider who’s providing this outsourcing service and communication of change, particularly for VAT. There are so many changes constantly. And, you know, how’s that going to be communicated by your third party to your key stakeholders of the project as well?

I couldn’t agree more. The third aspect, that comes to mind is around, as you mentioned, the change management aspect. What we mean by change management in this sense is that change management as a third-party provider ourselves, we’re going to implement the software, we’re going to show you the processes that come along with that software and how those processes work. We’re going to train you on how the software works, but there are going to be impacts of an introduction of any software. So that’s not just compliance software or tax software. That’s HR software, payroll software and finance software. There’s always going to be an impact within the organization. So from a change management aspect, what we would always recommend is that clients look at their internal processes, not just the ones that are directly associated with tax or the compliance teams themselves, but also those other processes that lead further into the organization. Do an assessment on those performances and an assessment on those processes to see what kind of impact is there and if they are needed. The other bit of the change management aspect is policy. Policy documents and policies can change widely with the introduction of technology. What we find is that it’s just an old way of doing things that a lot of things are done manually. But now with the introduction of technology, sometimes they can just you know, they need to make those policies.

Your policies then have to change. I suppose that might not be something that people consider. There’s a time element and a resource element that is needed there as well. So it kind of goes back to the beginning of the project management and understanding the amount of time that’s needed to be invested to successfully onboard a new piece of software or a new service or both.

Again, I agree with you 100%. They’re all linked to what I’ve mentioned, like the project management piece. That’s the structures, the project management, the communication aspect, and the change management. I guess what I’m saying around the three of those is that think wider than just doing the project that you’re looking at. Think about how the impacts are happening within the organization outside of just that project itself. Right now, I suppose what we’re talking about is Comply and the compliance software that we implement regularly with all our clients.

And then the big consideration then when you’re dealing with automation and software, and service is data. So, the quality of your data. So, you need to have a look at that too?

Data is obviously a huge aspect. And again, we’re not alone in this. So, we’re obviously focused on tax data and we’re focused on tax systems and compliance systems. But this is the same for payroll systems, finance systems, and HR systems. Data is key. Data is what drives the technology. As we always say, good data in means good data out. And so, we would always say that there’s no bad time to engage on data, to look at your data and see how your data is performing, where it’s coming from, its source right through to what’s been and spit out at the other end. Within TBI we adjust data through APIs, through functionality within the system itself. But to get that data in a certain format or in the way that the system can deal with it and work at its best is, we engage at the beginning obviously we engage at the very start we discuss data at the very start and we walk through the format that we want the data in. But during that discovery phase what we want to do is, I suppose we’re lucky in a lot of ways, we have a designated data analysis function that will take data from clients, work with our clients to break down the data. Sometimes you find that the clients themselves are maybe using the data and not in the best way that they could be using it.

So we can identify efficiencies just by going through that kind of onboarding process to make suggestions for improvements.

We can indeed. And that’s, the key aim of our data analysis team is to analyze this, and give feedback to the clients. They know they can use it if they wish and if they don’t, that’s fine too. But a lot of the time feedback we get from our clients is that it’s fantastic to have that opportunity and people with that knowledge and skills to feedback on how we believe the client looks. That’s one piece. But the next piece and the most important piece is to get their data in a way that it’s coming out of their ERP systems and being fed right through into our compliance software so that they’re getting the best use of our software and likewise, so are we.

With VAT, the tax authorities are moving more and more to continuous transaction controls. It’s a transactional listing, so direct transactional listing from the ERP system. So, data is getting more and more important and making sure the data is right and the ERP, is becoming more and more important. So, if you’re going to outsource, this is a big consideration that you’re outsourcing provider should be able to give you that flexibility to be able to adapt to the changes that are coming with the tax offices and TBI and our solution provides that. So, from outsourcing, we looked before at why companies outsource. On the last Expert View, when we spoke about outsourcing, we were talking about why companies choose to outsource their VAT compliance functionality. And if anybody wants to look back at that recording that we did with Barbara Barcsik it’s over on our website www.taxbackinternational.com. But for this topic specifically for onboarding, what are the key takeaway points for successful onboarding?

The key takeaway points are, first of all, don’t underestimate the requirement for project management and the requirement for the use of a clear definition and methodology that will bring you from start to finish. Make sure you engage with a partner that can lead you on this journey and has the experience to do this. The other aspects are the wider things outside of the projects, which would be the change management piece. Yes, the change management piece will be dealt with within the project, but outside of the projects, organizations need to be thinking about how their other functions or other processes and policies may be impacted by the introduction of this technology. Communication again, so it’s not just focused on the project but also focused on the wider functions and stakeholders within the organization, that the communication plan goes wider than the project. And lastly, a big thing for most onboarding personnel and functions is data. Data is key and it’s paramount that companies are thinking about their data, thinking about their multiple ERP systems and how they’re getting their data in a format that suits this type of software and this technology. But as I mentioned earlier, that’s something that we are lucky enough to have, data analysis and functions and personnel available to us that can guide clients through that discovery aspect of the onboarding journey.

I think that to summarize in one line, you really you will get out of it what you put in, and make sure that you use a third-party provider that can help with the complete journey to make sure that you achieve what you want to achieve from choosing to outsource your VAT compliance solution.

Correct.

Eoin, it was great to talk to you. Thanks very much. I hope everybody enjoyed this discussion on outsourcing and onboarding.

Tune in to Episode 4 of Series 2 of TBI Expert View where Lisa Dowling, our Senior Global Director – Head of Indirect Tax, Advisory and Compliance discusses ‘Continuous Transaction Controls (CTCs)’, their meaning, country-specific approaches and what’s next for businesses.