Focusing on the Strategic Value of Tax

A Vertex-sponsored tax process management survey report.

October 23, 2008
Sponsored by Vertex Inc

As tax departments continue to struggle with limited resources and time-consuming processes such as compliance, audit defense and tax data management, little time is left to concentrate on more strategic activities. While most chief financial officers (CFOs) and vice presidents (VPs) of tax believe that spending more time on strategic tax activities can increase value to their enterprise, significant barriers keep them from realizing the
full benefit.

A recent survey sponsored by Vertex(R), the market leader in global tax technologies and conducted by International Communications Research (ICR), explored the significant value that may be realized by optimizing corporate tax operations. The survey targeted CFOs and VPs of Tax and took an in-depth look at the benefits of enhancing the tax function. The survey also quantified the value that tax has on an enterprise and examined the barriers that are keeping tax departments from focusing on more strategic activities.

The following themes emerged from the research conducted by ICR:

  • There is a strong belief that enhancing strategic tax activities can have a material impact on corporate financial performance.
  • Time spent on routine activities is cited as the main barrier to realizing improved tax department performance.
  • Although CFOs are not particularly involved in the day-to-day work of the tax department, they are critical to the tax department's ability to achieve performance optimization.
  • Spending more time on strategic activities can add significant, tangible value to the enterprise in the form of reduced taxes and improved management of global tax risk

To supplement this quantitative research, Vertex conducted a series of 24 interviews with Vice Presidents of Tax at companies with $1 billion+ in annual revenue. The interviewees reacted to the data and provided additional insight on the findings. This perspective is captured in the Executive Summary under the "Insights" headings.

Survey results indicate a significant incentive for tax departments to improve their ability to engage in strategic planning, manage business risk associated with tax and provide support to strategic business
decision making.

The following pages detail the actual survey questions and answers. Additional insights from the qualitative interviews are highlighted in the Executive Summary.

These findings will help CFOs and tax departments better understand the benefits and barriers of playing a more strategic role so that the full value of an optimized tax department can be realized.


Today's tax departments face increasing resource limitations and outdated data management processes, as well as ever increasing compliance and audit demands. As a result, tax departments are challenged to find the time to address strategic business issues.

The Vertex Tax Performance Management survey focused on exploring perceptions of the value of the tax department. The findings reveal that companies forego significant potential value to the enterprise as a result of the tax department's inability to pursue these strategic activities. The findings also reveal the barriers to strategic activities, as well as what is necessary for the organization to overcome them.

Demographic Profile Highlights

  • 128 CFOs and VPs of Tax from companies with at least $500 million in annual revenue participated, with a balanced representation across industries of companies with annual revenues of $1 billion-plus.
  • 24 Vice Presidents of Tax at companies with $1 billion-plus in annual revenue were then interviewed to react and comment on the survey findings.

To read more about this study, please view the full report: Focusing on the Strategic Value of Tax (PDF).

With more than 30 years of experience, Vertex Inc. is the leading provider of advanced tax technology solutions and process management services worldwide.

Vertex solutions help companies streamline and integrate tax provision and compliance processes and leverage information to discover new strategic tax savings across every major line of business tax, including income, sales, consumer use, value added, communications and payroll. To serve its customers, Vertex works in partnership with the world's leading providers of ERP software and related services.

Founded in 1978, Vertex is a privately held company that employs more than 600 professionals at its headquarters in the U.S. (Berwyn, PA) and its offices in Europe (London), Atlanta, Chicago, Dallas, Phoenix, San Francisco, Sarasota and Washington, DC.

For more information about Vertex, visit www.vertexinc.com.