5 minute read 8 Mar 2019
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How to optimize the value of your tax and finance function


Dave Helmer

EY Global Tax and Finance Operate Leader

Helping companies reimagine the tax and finance function.Speaker. Passionate runner. Husband and father of seven.

5 minute read 8 Mar 2019

As the tax and finance function struggles to keep up with mounting regulatory, technology and talent pressures, managed services may be a smarter way forward. 

According to a 2018 EY survey, senior executives at some of the world’s leading companies say that, due to several key pressures, their tax and finance function is struggling to keep up.

(Also read our updated 2020 TFO survey.)

Some of the reasons: 

Shifting talent requirements:

Almost all (98%) companies surveyed believe that the core competencies required of tax and finance professionals will shift towards deeper process and technology skills. Most organizations (89%) said they find it a challenge to attract and retain appropriate tax and finance talent. 

Legislative changes:

The majority (87%) of companies report a lack of resources in place to monitor, evaluate and respond to legislative change.

Digital Readiness:

Half the respondents see a lack of technology investment as having the most significant impact on the ability of their finance and tax functions to deliver predictable outcomes on a sustained basis.  Over half the organizations surveyed (52%) are not highly confident that they are investing enough in analytics and technology to manage their reputational and tax risk profiles.

Against this backdrop, it’s not surprising that 84% of the companies we surveyed said they are taking action due to deficiencies in their current target operating model. But while many said they recognize the need to take bold and innovative steps, most were unsure of just how to find the right approach.

Changing core competencies


of companies believe that the core competencies needed from tax and finance professionals will shift from traditional tax technical skills toward deeper process and technology skills.

Three steps for taking a holistic approach to tax and finance

As companies consider the way forward, they can start by taking a holistic view of their tax and finance function. Key questions to consider are:

  • Where does tax and finance fit into the organization?
  • How does tax and finance continue to be a strategic part of the business, adding value to the organization?
  • How does tax and finance stay on top of leading technologies to continue to drive efficiencies?

Finding the answers to these questions, and the right way forward for the tax and finance function, can be discovered by following a step-by-step process:

Step 1: Scrutinize the current target operating model:

Companies must examine their priorities around cost minimization, value creation and risk management, and how the tax and finance function plays into the overall strategy. With a thorough understanding of their priorities, companies will have a clear view to assess any gaps in their current target operating model and its ability to withstand the future.

Step 2: Determine best-in-class activities:

Companies can then determine those activities where they want to be best-in-class – that is, those activities that are of high value and must be performed with optimal effectiveness and control. Examples of best-in-class activities include tax planning and managing tax controversy.

Step 3: Determine best-in-cost activities:

Similarly, companies should then determine those activities that are lower value, or best-in-cost – which could include items such as data collection and the completion of tax returns.  These activities should be performed at minimal cost through standardization, automation, sourcing low-cost delivery centers, or via third parties who have made these investments.

The pros and cons of 'build versus buy'

Once activities have been designated as either best-in-class or best-in-cost, companies can decide whether they want to “own” a task – keep it in-house – or “buy” or outsource a certain task to an external provider. Some businesses choose a hybrid approach to make the most of the efficiency and effectiveness of their tax and finance function.

The in-house option has pros and cons. An internal transformation that allows a company to retain and improve its tax and finance function may be the most traditional and familiar approach, creating the least disruption. However, it’s an option that requires significant management focus and capital investment. The biggest challenge may not be around the initial investment and effort but the ability to sustain a robust tax and finance function in a rapidly changing environment. 

Outsourcing to a managed services provider can be a more effective way to reduce overall tax costs and risks, by shifting IT and other expenditure to a third party who has already made large investments in world-leading technology, a cutting-edge data platform, global delivery centers and a network of specialist talent.  However, there are also downsides to outsourcing, as it requires a significant transition effort, as well as management and governance of the new operating model. 

Reimagining your function with managed services

Despite the effort, managed services can minimize costs and maximize the performance of the tax and finance function - producing higher quality results, reduced risk and increased transparency. 

In fact, the cost savings and added value achieved by managed services, when delivered by a provider with a trusted tax and finance brand and regulatory credibility, are simply unmatched by even the most well-resourced team. And, critically, by taking the burden of tax and finance compliance out of the business, companies can pivot internal resources for more strategic activities.



of companies are already outsourcing, or considering outsourcing, their tax and finance function.

It’s this ability to build a long-term, and strategic approach to tax and finance that is driving many leading companies, such as Duke Energy and American International Group (AIG), to choose to outsource its managed services.

  • Duke Energy recently engaged EY to take on its tax and finance functions in a managed services arrangement that the former SVP of Tax and Treasurer and current President of Duke’s NC business unit, Stephen De May described as giving the company, “access to advanced digital capabilities and long-standing tax experience to improve planning and risk identification in today’s evolving business landscape.”
  • AIG formed a collaboration with EY that allows the multi-national finance and insurance giant to leverage EY managed tax services and technology backbone, freeing up its internal team to focus on more strategic initiatives.

Time to act

As the challenges around managing tax and finance become more complex and the stakes become higher, business leaders must act now to reassess the function. Is it time to embark on internal change, partner with a managed services provider or adopt a hybrid approach? Whatever is decided, it’s important to move fast to better manage these noncore, but critical activities so that leaders can drive their business forward with confidence.


Leading companies find their tax and finance functions facing unprecedented challenges and risk amid increasing cost and talent pressures – in essence, they are being asked to do more with less. Managed services helps those companies that may be struggling to keep up.

About this article


Dave Helmer

EY Global Tax and Finance Operate Leader

Helping companies reimagine the tax and finance function.Speaker. Passionate runner. Husband and father of seven.