A wider range of businesses are also transforming and co-sourcing
The trend of transforming tax and finance functions and the ensuing popularity of co-sourcing as a solution initially started with the world’s biggest companies, especially those with revenues of US$20 billion and above.
Our latest survey finds a sharp increase in action being taken by businesses in smaller revenue bands; co-sourcing is also growing in popularity with these businesses. For example, the proportion of businesses with US$20 billion and above that were "more likely than not" to co-source, remained at a significant 95% in 2023. Among businesses with revenues below US$20 billion, that figure is 94% this year, up from 79% in 2022.
“There’s an incredible amount of interest in co-sourcing across all businesses,” says Ryan Burke, EY Global Private Leader. “A lot of businesses have seen the benefits the first movers have enjoyed and have made their decision to act on a transformation as a result.”
Privately held companies are also transforming, although their reasons for doing so differ somewhat from their publicly held cohorts. Among other things, the surveys have shown private companies view having modern tax and finance functions as being a competitive advantage. Their boards and C-suites are also even more likely to view the tax function as a strategic partner for the business.
That’s true at family-owned Boehringer Ingelheim, which recently undertook a major transformation of its tax function. The decision was consistent with a long-standing tradition of acting with ingenuity and having a first-mover mentality. The company focused on driving tax operating model innovation in different dimensions — locally and globally — with regard to the past, present and future.
“We wanted to move fast and challenge the status quo of common tax compliance practices. Our goal was clear — raise quality, boost efficiency and leverage new ways of sourcing and technology to ensure global tax compliance,” says Malte Fidler, Boehringer Ingelheim’s Global Head of Tax & Trade Governance. “We trust our service provider to deliver the highest quality and make the whole system work every day. In the end, this is a question of people interacting with trust and solving complex and pressing problems together.”