Tax Employee Experience Microsoft view and proposal

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1 Tax Employee Experience Microsoft view and proposal Tax Agencies in most countries want to better equip their employees to optimize employee satisfaction and improve their efficiency which in turn translate into the best possible public service to citizens and business. Our set of solutions for Tax Employee Experience together with our partners - are key assets that can boost efficiency and flexibility of work, particularly around enabling greater mobility, better cooperation and productivity, as well as security. Tax agencies have an important population of employees that work outside of a traditional office: tax inspectors. Overall Status & Trends: While the Tax Authority primary function is collecting, and enforcing taxes, tax can be a key engine for the country s health in terms of stability, societal fairness, economic health, attractiveness to investors. Whether mature or emerging, most countries Tax Agencies are striving to evolve driven by internal factors (e.g. political instability resulting in a wish to do more impact initiatives which require the state to have maximised revenue while not wanting to increase taxes and subsequently a total focus on being more efficient in collecting, or a political commitment on certain areas such as becoming carbon neutral which results in leveraging taxes to incentivise in that direction, or a major need for transparency to citizens ) and external factors such as the impact of the 4th industrial revolution on labour (resulting in fewer taxes being collected), or of the new digital economy (where taxes are not as easy to collect), or of demographics in mature countries. Our research shows that the 5 following areas offer the highest potential for digital transformation in Tax Agencies: - Taxpayers perception & behaviour - Tax compliance - Efficiency & effectiveness - Enhancing Re-regulation ability (ie having increased ability and agility to match the country s political and economic goals); - Increasing Cooperation ability (ie the ability of Tax agencies to cooperate with other government agencies (both within their country like with the Social Services Ministry and outside their country ie to fight against tax evasion) and with private sectors (such as with banks to facilitate tax refunds)).

2 Tax Agencies are among the top employers in terms of population of employees. Their human resources are distributed which adds complexity to its management; In appendix you will find the detail numbers of employees for various geographies. At the same time during the digital shift that we are currently facing a successful tax administration will require professionals of the future, employees that will be highly proficient in data analysis, statistics and technology, as well as process improvement and change management. Tax functions will employ dedicated tax IT, data and project management specialists who will develop, champion and execute the tax technology and transformation strategies. Recently we have seen more and more new functions dedicated to Data, Research, Analysis and Statistics, Taxpayer Advocate Service, and Tax Professional Responsibility. Most leaders in the public service expect the pace of technology adoption to increase. Accenture sees personalized public services (Internet of Me) as one of the 5 trends for digital government in One of the biggest barriers to this evolution is the lack of digital skills of the public service employees. Another trend identified is Workforce Reimagined where successful organizations will manage employees alongside intelligent machines ensuring collaboration between the two. (74% of the interviewed Public service leaders recognize the importance of intelligent machines and public service is ahead of other industries in considering adoption of software automation or cognitive computing to complement the human workforce) (162 public service leaders across nine countries and 10 industries). Many countries are taking actions to equip their employees with the right processes and tools to best serve citizens and businesses: Sweden is one of the many countries for which employee experience is a high priority; here are a few examples of their goals with regards to employees: An attractive place to work offer a modern workplace Business development and internal effectiveness by using IT Change of technical platform Effectiveness in every day workmeeting the customer effectiveness and digitalization Self-Service solutions to citizens in Sweden Several OECD member countries are focussing on building Tax capacity and tax employees capabilities: The Tax Inspectors Without Borders initiative (TIWB) facilitates the deployment of experts to work alongside tax auditors from tax administrations in developing countries on complex international tax audits and audit-related issues. Transferring knowledge and skills through a real time, learning by doing approach, TIWB is a unique, niche program of capacity building assistance which has had immense early

3 success, attracting the interest of government donor agencies and private foundations. In Poland, the work of the Tax Administration is improved through modern and effective human resources management. Management standards are becoming increasingly unified thanks to the 2012 Ordinance of the Head of Civil Service on the Standards of Human Resources Management in Civil Service. The standards are relevant to five areas: organization of human resources management, recruitment and initial training, motivating, development and further training, termination of an employment relationship. To fulfil their duties well, Tax Administration employees need to work per several basic principles: the principle of professionalism, indicating that they should have appropriate knowledge and skills, as well as the principles of impartiality, reliability and public service, which imply that employees are supposed to serve citizens. In Australia, the Australian Tax Office (ATO) is meeting the digital revolution head-on by transforming government services with their new digital and mobile initiatives while also motivating IT professionals and retain top talents. Users now expect their government to provide services quickly. It s no longer the domain of private industry, app stores or commercial and retail offerings. It s now expected that the government provides those services as well, and does it quickly. Damien Hobbin, IT Program Manager, Enterprise Application Channels and Online, ATO The ATO is the first federal department in Australia to actually have an app in the Windows Store. Leah Owen, Service Delivery Manager for Microsoft Our research shows that 5 areas illustrated in the graph are ones with the highest potential for digital transformation of Tax Agencies: Improving Efficiency and Effectiveness is an important foundation for all the other areas. People, together with processes and data - are main contributors to improving efficiency and effectiveness. Tax employee experience and GDPR (EU General Data Protection Regulation) Adopted by EU Parliament Apr and enters into force in May 2018 it imposes extended rules on entities that offer goods & services to people in the EU or that collect and analyze data tied to EU residents, no matter where they are located. The GDPR is structured around six principles: Requiring transparency on the handling and use of personal data. Limiting personal data processing to specified, legitimate purposes. Limiting personal data collection and storage to intended purposes. Enabling individuals to correct or request deletion of their personal data. Limiting the storage of personally identifiable data for only as long as necessary for its intended purpose. Ensuring personal data is protected using appropriate security practices. Microsoft products &services are available today to help our clients meet the GDPR requirements. Tax agencies are typically large employers and as such collect, access and manage personal and sensitive employee information as well. As processor of such information they are required to comply with the regulation. We expect RFPs

4 on this topic to be launched second half of 2017 CY (budget left over consumption) or early 2018 CY. Due to the limited time to become compliant, we need to alert the customers and help them be prepared for rapid implementation once budgets are made available for such a project. EU fines are significant (min. 20 MEURO for each breach). We recommend customers to start the journey to GDPR compliance by focusing on four key steps: Discover identify what personal data you have and where it resides. Manage govern how personal data is used and accessed. Protect establish security controls to prevent, detect, and respond to vulnerabilities and data breaches. Report execute on data requests, report data breaches, and keep required documentation. Rather than track the controls required by individual standards or regulations on a case-by-case basis, a best practice is to identify an overall set of controls and capabilities to meet these requirements. Likewise, rather than assessing individual technologies and solutions against a comprehensive regulation such as the GDPR, taking a platform view such as one encompassing Windows, Microsoft SQL Server, SharePoint, Exchange, Office 365, Azure, and Dynamics 365 can provide a clearer path to ensure customers comply not only with the GDPR, but also with other requirements important to them as well (they will be better prepare to identify error and fraud e.g.) Microsoft Consulting as well as Microsoft Partners (Advisory such as EY, KPMG, SI such as ATOS or Security and Productivity partners such as Cognizant, Software Innovation etc) offer an extensive set of services and tools. More information can be accessed at Microsoft EU GDPR official page - Business challenges and solution benefits The pressure to do more with less is caused by budget constraints, lack of resources, increased taxpayer data and need for its proper management. For many tax administrations however this pressure to do more with less is accompanied by a strong political push to raise revenue, maintain the country s attractiveness for investors: this can be facilitated by improving ease of paying taxes. Increased taxpayer data and emerging technology trends force tax administrations and businesses to heavily invest in technology and compete for people with the right set of skills in data analytics / data mining, forensic auditing, risk management and tax technology. Digital transformation requires focus on empowering employees to be more productive and stay motivated; few examples of tools to support this: o Learning and knowledge management o Digital case management and rule based workflow solution for processing of income tax returns and payments. o Customer support through web interfaces like webchat and virtual assistance for automated help o Reports and dashboards to keep track of taxpayer s data regarding return, payment, compliance and collection. o Mobile case management and search facility o Integration with GIS maps to locate cases by region and allocate resources effectively The quickest way to achieve efficiencies of scale is to empower the mobile workforce: Enhance productivity with mobile device apps - (mobile workers can use mobile device apps to manage daily tasks and enhance real-time transfer of information) Drive accountability with documentation tools - (document work via camera and voice recording and eliminate the need for paper processing with cloud-based reporting)

5 Optimize communications with less paperwork - (eliminate dependency on paper work packages and replace with up-to-date digital packages. Improve employee safety and industry compliance) Challenges Ability to improve services and processing time while facing budget constraints, lack of resources, Ability to stay technologically relevant while new technologies emerge Ability to provide a secured, controlled access and use of taxpayer information in a digital world where there are high risks associated with mobile devices for example. Protecting individuals and data is of critical importance. Ability to access and consume information from multiple data sources: internal, external, secured or not Ability to answer to citizens and worker s expectation of anytime, anywhere access to better information, tools, apps, and services Ability to provide tax leaders require greater insight, accountability and compliance Ability to continuously improved in the processing time, resolution of inquiry and quality of the work employees perform. Benefits Improve employee s ability to interact with government agencies and Co-workers Improve an agency s response time to Tax inquiries and requests Increase employee satisfaction and productivity by having everything in one place Improve transparency by allowing employees to easily view and track the progress and their interactions in real-time Deliver efficient, scalable, and security-enhanced devices that allow the Tax Agency to be in constant contact with the employee Provide greater visibility and improved decision-making capability as Tax Agency management gets constant updates to dashboards and analysis data Improve resource management, increase operational efficiency and contain costs Enable everyone to make better data-driven decisions faster Products and services Tax Employee Experience solutions can involve the following products and technologies: Office 365 Azure SQL PowerBI CRMOL &ERP Dynamics 365 Azure AD &Biometrics Project management Windows 10, Devices and EMS The use case scenarios will be driven by the typical roles of the employees: 1. Tax auditors (mobile workers) 2. Tax agency front-line employees 3. Tax agency back office (revenue management, collections, audit) 4. Managers The Journey map details in a visual format the different touchpoints tax employee- taxpayer by role and below you will find more specific information for each category.

6 1) Tax auditors and mobile workers: Quickest wins could come from addressing the mobile workforce like tax auditors/inspectors. Images below showcase a tax auditor targeted solutions and interface. One of the main activities for tax auditors is the case selection and management. The solution top functionalities cover: Login page: Opens tablet app in his office; Logs into the application; Syncs list of cases with the central server (sync: download of all case related info, upload of all modified/new activities on the case) Tax audit dashboard: Views personal dashboard with the information: Number of cases: Current cases in progress, new cases, due this week, due next week, overdue; Number of my cases YTD, QTD, this month ; Compare with: my peer group, my plan; Alert signals that one case needs to be completed ;Views all customer related data from Tax Authority IT systems and 3rd party systems; Performs analysis, compares data from previous periods, from past audits, from other sources; Takes notes and comments about the audit and then continues back to audit planning Case management: Opens the case and creates an audit plan based on standardized templates from the central catalog and associated documentation; Analysis of a case : Views company data; View list of activities ; Views various documents / court orders; Modifies the list of activities / adds new activity; Views list of activities (completed, in progress, not started); View checklist and interviews the customer; Uses the knowledge base to get recommended measures, methodologies and legal practices; Associate One note (with drawing); Associate a call; Associate a document and classify it (taken picture through mobile phone); Marks the activity as done Syncs data to the central server Views the dashboard with updated results Plans the next case for audit

7 As a summary the portfolio of solutions addressing the tax employee roles is summarized in the below table:

8 An excellent example of how Tax agency has decided to empower and motivate at their same time their employee is HRMC UK. Their goal was to give their employees: The right tools to do a great job The same user experience we re planning for our customers Access to modern apps and social media build digital skills Opportunities for more flexible working so they can give their best. - Mike Potter Chief Digital &Information Officer The impact over the tax credit peak: Mobile devices helped us support customers more flexibly Up to 200 advisers worked from home evenings and weekends Extended webchat hours 106k webchats over the period 2. Tax agency front-line employees: Managing the Taxpayer engagement through multi-channels can be achieved through: contact-centre (Dynamics, Skype for Business), smartportals (Office 365), s/scheduling (Office 365), knowledge based and enterprise search (Office 365), case management. 3. Tax agency back-office (revenue management, collections, audit): These employees are involved in all the activities for revenue management, tax collection, refund processings, accounting). They will be supported by our productivity suite for efficient collaboration, business applications for the accounting and refund processing, project management (Project online Office 365), Business Intelligence for dashboards and reporting (SQL, PowerBI, azure). 4. Managers These employees will focus on performance management when it comes to quality of services delivered, time of processing, backlog, taxpayer satisfaction, budgetary execution, team collaboration, etc. They can therefore be supported by various tools: business intelligence (PowerBI, SQL, Azure), productivity (Office 365, Skype for Business), mobile applications, e-learning platforms. Federated Identity With an ever-increasing number of applications and services, users must create a multitude of login credentials for each of the applications they use. As a result, it is difficult and often counterproductive to security measures to remember each of these username and password combinations. Therefore, passwords are often chosen to be less complex, subject to common dictionary and brute force attacks, and IT staff (developers and support staff) spend an inordinate amount of time developing authentication/authorization functionality and resolving login issues. With federated identity approaches, such as those enabled by Azure AD B2C, governments can be limit their exposure in managing user credentials and developing authentication/authorization functionality. By consuming existing internet identities (e.g. Facebook, Microsoft, Google, LinkedIn, etc) of citizens government applications can reduce their security exposure by no longer processing and storing user identities

9 and limiting the storage of sensitive data such as passwords. Citizens benefit from this approach as it reduces their need to create accounts for government services and they control what aspects of their online profile is visible to consuming applications (e.g. Name, Address, , etc.) To validate the internet identities of citizens in government applications additional steps can be taken to validate known data about the user from existing datasets. For example, to pay a water bill with a city a citizen signing up for a federated identity service may be asked to verify their address and previous month s bill amount. Government systems can perform customized validations such as these to build a level of assurance of the identity being consumed. A level of assurance for inquiring on a leaf collection schedule, vs. paying taxes would certainly have varying degrees of validation. Government systems are then able to limit their PII liability by storing MBUNs meaningless but unique numbers that represent the citizen identities consumed from an identity provider. Additional layers of protection for sensitive data such as encryption, masking, or anonymization may be leveraged as well to further dereference data from identity. A more comprehensive view of customer processes and Microsoft cloud stack is included in below : Reference Architecture and Cloud Architecture

10 To conclude on this section, we would like to raise the relevance of E5 within these clients. Based upon our research, organizations such as Ministry of Finance need sustainable systems which also offer enough flexibility to modernize as the market and technology evolves. Choosing the E5 Office 365 plan can help refresh the telephony networks and align them with IT decisions, avoid more security breaches and reinforce business continuity with new security features but also support in rationalizing disparate systems. This is what makes E5 a perfect offer for Ministry of Finance and Tax administration. Customer targeting All BDMs are keen on employees productivity and quality of work. More and more we see a focus on motivation and talent attraction. This makes HR & Professional training leads advocate for us inside the organization. Below you have US IRS model that shows how many functions will had direct influence on decisions regarding workforce optimization. Identify Workforce Investment Boards and engage with them to pitch the Modern Workplace proposal from Microsoft. Another way to tackle this topic is to leverage the guidance provided by OECD on Tax administrations and capacity building that requires development of digital skills for tax workers but also Development of a Knowledge Sharing Platform to cooperate and create efficiencies in sharing expertise to support capacity development. OECD also drives for Cross border cooperation where mature countries (Netherlands, Spain, UK, France etc.) support emerging countries in development of Tax profession and modern tax administration. Tax

11 inspectors without borders is such an initiative and an easy way to enable that is Entreprise Collaboration & Communication powered by Office 365 & Skype.