In our new digital world, data has become the foundation for offering consumers the personalized experiences they demand. When it comes to public services, consumers demand the same level of personalization and simplicity that commercial providers—from financial services to media and entertainment—provide. And the tax domain is no exception. In the next five to 10 years, revenue agencies will handle over 100 times more data than their predecessors, who were largely reliant on paper and telephone communication channels. Increasing volumes of data could not only help tailor the tax system for the taxpayer but could also help revenue agencies to improve tax compliance.
But to harness its power effectively and become truly data-driven organizations, agencies need to take a new approach, evolving their thinking to address data management in new ways.
Traditionally, agencies focused on “systems of record” that securely held information about taxpayers’ transactions, their history and status. The records contain static information that must be 100 per cent accurate and as up-to-date as possible. The data stores, methodologies and governance that can fulfill those requirements have, in essence, changed little.
But as taxpayer relationships have digitized, and data volumes continue to grow, two other classes of systems have become critically important: “systems of engagement” and “systems of insight.” In order to effectively support those three different classes of systems now being fed with faster flows of data from multiple sources, a new approach to data is required that includes:
- Processing data at greater velocity;
- Accessing and using a wider variety of data sources;
- Gathering insights from unstructured data, such as user-generated content or social feeds; and
- Creating the ability to support much bigger volumes, such as transaction data to capture VAT or GST.
There’s no single data storage technology that can meet all these needs. Agencies must manage a number of technologies that can work both independently and together across the three systems, accessing and addressing these implications. They’ll also need to think hard about new models of data governance.
The goal of all this? To become a data-driven, agile revenue agency. My colleagues George Krasadakis, John Baxter, Yaz Yazicioglu, and I have written a paper that examines these issues in more detail. Take a look and let us know your thoughts. We’d be very interested to hear how revenue agencies around the globe are evolving their strategies to meet the challenges and opportunities of operating in our data-driven age.
Access the paper The New Data Reality for Revenue Agencies here.
For more related thinking and content click here.
See this post on LinkedIn: Rethinking data strategies: The new imperative for revenue agencies.