How to build a business case for indirect tax process automation

In a recent Thomson Reuters webinar, tax automation experts tackled a critical question: How do you build a compelling business case for indirect tax automation that gets stakeholder buy-in?

With compliance complexity increasing and AI capabilities advancing, the conversation couldn’t be more timely.

The panel featured Andrew Zwig (Director, Client Partners), Jason Sisian (Senior Solution Consultant), and Logan Tyler (Senior Solution Consultant) from Thomson Reuters. Here are their key insights.

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The pain points driving tax automation forward

Quantifying ROI: The numbers that matter for leadership

Overcoming stakeholder objections

Building an effective implementation roadmap

The AI revolution in indirect tax processes

Key takeaways for indirect tax leaders

The pain points driving tax automation forward

What makes tax automation a strategic priority? It’s about addressing fundamental inefficiencies. “This is not just a technology investment,” explained Zwig. Investments in indirect tax automation are strategic initiatives that touch every aspect of how tax teams operate. The drivers are clear: reduce risk, improve accuracy, minimize cash outlay, and free teams for strategic work. But tax leaders need concrete numbers for leadership.

Quantifying ROI: The numbers that matter for leadership

When securing budget approval, leadership wants numbers tied to risk reduction and efficiency. The panelists focused on three key metrics: labor savings, risk reduction, and scalability. The ROI calculation is straightforward: divide total savings by associated costs — implementation, SaaS licenses, or both.

What results can you expect? Tyler shared a real-world example: ” We cut our compliance time down probably more than half, I’d say 75%.” These metrics, including hour reductions, perfect audit results, and quantifiable savings, make business cases almost impossible to ignore.

Overcoming stakeholder objections

Even with strong ROI, proposals often face resistance. Common objections include:

• Cost concerns: Many view automation as cost avoidance for reducing audit risk and penalties. The experts emphasized benefits extend beyond avoiding negative outcomes.
• Integration complexity: Fears of disrupting existing ERP and billing systems persist. Modern tax engines are designed for seamless integration, reducing traditional IT burden.
• Resource availability: Organizations question internal resources for implementation. The solution? Phased implementations and parallel runs that minimize disruption.

Building an effective implementation roadmap

Having a plan for transforming your indirect tax process isn’t enough. Zwig emphasized the SMART framework — making roadmaps Specific, Measurable, Achievable, Relevant, and Time-bound. Success criteria should be established from the beginning.

Critical elements include:

• KPIs and milestones: Build in the ability to monitor progress with clear, achievable results.
• Celebrating success: “One of the most important factors of a project roadmap is how we celebrate success along the way,” noted Zwig.
• Stakeholder communication: Identify all stakeholder groups early and maintain constant communication.

Tyler warned: “Tax needs to be involved in the front end.” Too often, tax departments join months after design decisions, forcing work with ill-suited systems. Your roadmap must address both initial implementation and ongoing concerns throughout the technology’s lifespan.

The AI revolution in indirect tax processes

Perhaps the most exciting development is AI integration. While around 50% of corporate tax professionals currently use generative AI, Thomson Reuters Institute research shows that over 80% believe it will become central to their workflow within 5-10 years. Sisian was quick to emphasize that, “AI will not replace the need to keep a human in the loop.” Instead, AI serves as powerful enhancement to human expertise.

Current AI capabilities include:

• Data cleansing and classification: AI processes and classifies transaction data, significantly reducing manual intervention.
• Predictive analytics and anomaly detection: AI identifies unusual patterns in tax filings. For example, if Pennsylvania sales tax typically runs $3,000 monthly but jumps to $10,000, AI flags for review.
• Generative AI tools: Solutions like CoCounsel Tax generate outputs based on prompts, helping draft tax positions, summarize research, and create audit-ready work papers.

“Think outside the box, right? If there’s something you’re doing today and it’s causing you a lot of pain, there’s a solution on the market. Build your case and go to your leadership.” —Andrew Zwig

Key takeaways for indirect tax leaders

Building a successful business case for indirect tax automation and transforming your indirect tax process requires:

1. Clear ROI metrics focused on labor savings, risk reduction, and scalability
2. Proactive objection handling that addresses cost, integration, and resource concerns
3. A SMART implementation roadmap with defined milestones and stakeholder communication
4. Strategic AI integration that enhances rather than replaces human expertise
5. Early action to plan for the year ahead and position your department for long-term success

The message from tax leaders is clear: Indirect tax automation technology has matured, the ROI is proven, and the time to act is now. Whether you’re just beginning to explore automation or looking to expand capabilities, the opportunity to streamline your indirect tax process, drive efficiency, ensure compliance, and free your team for strategic work has never been greater.

To watch the webinar in full and on demand, register now: https://corporate.thomsonreuters.com/preparingfornextyear

Based on the Thomson Reuters webinar “Preparing for Next Year: Building the Business Case for Seamless Indirect Tax Automation to Drive Future Efficiency and Compliance,” hosted by Zach Warren.