Tax function of the future www.pwc.com Tax function of the future Building the business case for change Ann Marie Achille, Tax Reporting and Strategy Partner Daryl Sherred, Tax Reporting & Strategy Director

Agenda Setting the stage – Drivers for the case for action Business case basics Quantifying and presenting a successful business case Business case examples

Tax function of the future Setting the stage – Drivers of the case for action

Setting the stage To transform the Tax function organizations must develop a clear strategy and well-articulated business case. A recent PwC global client survey asked about internal drivers of the tax function. 58% of companies had senior-level sign off of the tax strategy Majority of tax strategies were introduced in last 5 years Key Themes Most important measures are:- Tax risk mgmt. Reduced ETR Sustainable ETR 82% think performance measures are appropriate

Setting the stage (continued) Key performance measures ranked by importance Tax Risk Management – No surprises, penalties, material audit adjustments Effective Tax Rate reduction Effective Tax Rate sustainability Delivery on significant projects Maintaining or reducing the level of cash taxes Accurate/Timely tax returns Effective management of the team, improved efficiency, headcount mgmt. Feedback from stakeholders including support given to the wider business Others Staying within budget Staff engagement scores

Defining strategy Several factors require Tax to be convincing in its business case for change. Tax needs to: Ensure a clear vision and strategy Identify objectives Measure how well it is accomplishing. Measure Identify objectives Clear strategy

Defining strategy (continued) What is a tax strategy and why is it important? What do we mean by strategy? Strategy refers to how the organization manages its tax affairs and responsibilities. Key aspects of tax strategy include: Stakeholders Tax cost and tax risk Approach and responsibility Key performance indicators A clear strategy and vision, supported by a well-articulated business case, are essential to gaining leadership support and funding to implement solutions.

Tax function of the future Business case basics

What is a business case? A business case is a well articulated argument intended to influence key stakeholders and decision makers towards a desired solution or action. A business case seeks to secure necessary funding, and articulate a clear path to an attractive return on investment.

Attributes of a complete business case A business case should include: Project overview Strategic objectives and critical success factors Project outputs and business outcomes Project strategy and implementation approach Comparison of alternatives Stakeholders and responsibilities Dependencies Cost considerations Project risks and key assumptions

Tax function of the future Quantifying and presenting a successful business case

Quantifying the business case Benefit Reduce compliance hours and cost for preparatory tasks Increase capacity to execute on the overall tax strategy Cross train, hire, and retain key staff and reduce staff augmentation costs Eliminate software costs & other recurring expenses Identification of tax saving opportunities Cost Decreased risk of penalties, overpayment of estimated tax liability Reduced third party service provider costs

Business case examples

Presenting the business case Stakeholders Business partnering Strong leadership Communication Clear messaging Technology Moderator (Michelle) to present the topic for discussion: - How does having a multi-year roadmap help in delivering the business case? Respondent: Joel Michelle to add commentary on summarizing the key take-a-ways for presenting the business case. Michelle will also present the final polling question. Deliver to Tax’s key internal stakeholders Confirm buy-in from other functions in the organization Ensure all parties understand and support the change Articulate the business case clearly and succinctly Deliver with strong leadership, business partnering and communication skills Use technology that reflects tax data in a dynamic and engaging manner

Wrap up Moderator (Michelle) to conclude and summarize discussion and reinforce primary take away point for TFotF Paper #6

Tax function of the future series Our predictions in the series cover six main areas: Legislative and regulatory environment Risk management and governance Data Technology Process People The series: Previous Topics Part 1 – Reshaping the Tax Function of the Future: Predictions and insights Part 2 – Global tax transparency and risk management Part 3 – Unlocking the power of data and analytics Part 4 – Tax as a critical component in every Finance transformation effort Part 5 – Driving value through tax reporting Part 6 – Building the business case for change To download our publications in the Tax Function of the Future series visit: pwc.com/us/taxfunctionofthefuture December release Part 7 – Workflow, Document Management and Collaboration

PwC Tax wants to hear from you… How would you build a business case for tax transformation? Tweet at us using the hashtag #FutureofTax Follow us on LinkedIn @PwC_Tax PwC LLP

Thank you Ann Marie Achille Partner, Tax Reporting & Strategy (312) 298-3331 ann.m.achille@pwc.com Follow me on Twitter & LinkedIn Daryl Sherred Director, Tax Reporting and Strategy (412) 355-6091 daryl.j.sherred@pwc.com Follow me on Twitter & LinkedIn @Daryl_Sherred #FutureOfTax #TaxIsSexy This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. This document was not intended or written to be used, and it cannot be used, for the purpose of avoiding US federal, state or local tax penalties. © 2016 PwC. All rights reserved. In this document, "PwC" refers to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.