EY-Microsoft joint innovation reduces tax data processing from months to hours with Microsoft Azure and Power BI

Tax functions are one of the heaviest consumers of data within organizations of all sizes. As one of the largest providers of tax compliance services in the world, EY is very familiar with the challenges associated with collecting and processing disparate tax data sets, and the resulting difficulties in delivering analytics and reporting at scale for clients.  

Disjointed Enterprise Resource Planning (ERP) systems and considerable Extract Transform and Load (ETL) efforts make it challenging to produce real-time analytics and end-to-end transparency into the process. It's common across the industry for tax professionals to spend weeks, even months, on operational "data-wrangling" efforts. Without a centralized location to organize externally sourced tax data, technology and tax professionals alike are forced to take extra measures in overcoming what EY refers to as “the great tax data challenge.” Here are the four key pain points in tax data processing: 

1. Completeness of data: obtaining all the necessary data to apply tax technical decisions 
2. Quality of data: obtaining accurate data 
3. Fit for purpose: obtaining data in the appropriate format for tax processing 
4. Timeliness: obtaining data within the required timeframe for tax determinations  

As part of its commitment to drive transformative opportunities for its clients, EY has made it part of its mission to help enable a better working world for tax professionals and clients across the industry. To make this a reality, EY teams needed to design a framework that addresses the entire tax life cycle, not just one portion of the process. 

"The challenges that we have with establishing a single source of truth for tax is threefold," explains Santhosh Kumar, Senior Manager, Tax Technology and Transformation (TTT) at EY. "First, data comes from multiple sources and is often consolidated through Microsoft Excel files. Once you have the data, it becomes very hard to track exactly which piece of information came in at what point in time. Secondly, multiple people are preparing the data at any given point in time, so it's very hard to complete the consolidation process to come to an aggregated view of the information. Thirdly, by the time tax processors have that aggregated view, they're left with little to no time to perform analytics." 

EY's leadership teams called upon an existing relationship with Microsoft to design and implement a robust, cloud-based solution with Microsoft Azure, Power Platform, and Microsoft 365 technologies to deliver a single source of tax data truth. 

A strategic alliance turns impossible to innovation 

For Suzi Russell-Gilford, global Microsoft tax alliance leader at EY, the decision to use Microsoft technologies to enable the framework for EY's tax services was obvious.  

"The EY and Microsoft alliance is helping us build a better working world for our clients by bringing cutting-edge technology to address complex tax problems in a simplistic fashion for everyday use at work,” says Suzi. "We have a 360-degree relationship in tax, whereby we design and build solutions on Microsoft’s technology to solve for tax compliance automation, and Microsoft itself uses EY’s tax technology for its own global tax compliance reporting processes. Working as a co-development unit, we're creating leading-in-class tax technology services through joint innovation efforts made possible by the EY-Microsoft alliance.”  

Not only do EY teams already use Microsoft technology internally, but the majority of EY's clients use Microsoft products within their organizational environments as well. Creating a user experience that was familiar and intuitive for EY’s clients was top of mind. Additionally, EY wanted a service that could be rapidly deployed, could help deliver flexible client-level configuration capabilities, and would meet the appropriate security standards.  

Microsoft competencies power the Intelligent Tax Function Framework  

A core team of EY professional developers, led by Santhosh, designed and established the Intelligent Tax Function Framework environment. What would have taken three months to create with traditional custom-coding methods took three weeks to design, implement, and problem-solve as needed with low-code solutions.  

From the lead developer's perspective, security verification was a breeze with Microsoft technologies. Santhosh says, "As the solution architect for the Intelligent Tax Function Framework, having it all unified with Microsoft delivers a big advantage. For example, the organic integration between Power BI, Azure Synapse, and Azure SQL DB means we have simplified data connecters and integrated security readily available, which is phenomenal.”  

The development team emphasized focus on optimizing the ETL process because of the sheer volume of external source data that tax compliance processes require. The solution uses Azure API Management to transform data once rather than multiple times, minimizing repetitive API calls to activate Azure Data Factory pipelines. Furthermore, using Azure DevOps, the team continuously iterates on the Intelligent Tax Function Framework that enables EY to stay on the leading edge of agile solution delivery. 

Stephen Cranford, Managing Director of Connected Applications for Tax at EY, says, "When it comes to cloud service providers, Microsoft is one of the most forward-thinking in enterprise solutions and enterprise support. We don't need to worry about integration challenges like building APIs, because so many of our clients have an enterprise agreement with Microsoft. Our focus was to take their products out of the box, embed EY Intellectual property in terms of tax processes and tax functions, connect them to cloud data sources, and allow client-level configuration."  

Creating a tax data lineage with Microsoft Azure capabilities accelerates efficiencies 

Largely, the challenge and pain point that parties experience in the tax life cycle are due to the variety and volume of tax data that is externally sourced for tax determinations. In many cases, tax functions do not own the source data and are not able to be transformed specifically for tax purposes. This is where completeness and quality of data are a concern for tax preparers. Additionally, ever-changing tax regulations that cause the speed, frequency, and level of detail in the tax data being requested of taxpayers to increase only exacerbates the importance of timeliness of tax data.  

Daren Campbell, Americas Tax Innovation Leader and Tax Technology and Transformation (TTT) Partner at EY says, "A study EY conducted within the last year found that companies spend 40 to 70 percent of their time on data-cleansing activities. The combination of Microsoft cloud platforms—Azure, Power Platform, and Microsoft 365—with EY’s IP eliminates the time being spent on manual data rework." 

The EY Tax Datasphere, the back-end portion of the Intelligent Tax Function Framework, solves for this issue by extracting and transforming data once—rather than several times by several people—while also making it available to users who need access for specific tax and compliance uses. To start, several custom and third-party external APIs pull general ledger and tax software data from various disparate sources. Azure API Management optimizes the flow of API analysis, security, and routing of this data to its appropriate target destination for processing in Azure Data Lake.  

Azure Data Factory pulls stored reference data from Azure Data Lake to perform required ETL operations via various tax-focused process pipelines, allowing for automated visual transformation of data at scale. Azure Data Factory also enables mapping the output of the transformation to required target maps in Azure SQL Database tax-focused common data model—built in combination with Azure SQL DB and Azure Synapse Analytics.     

The EY Tax AI Suite app uses AI trained to automatically identify erroneous transactions while machine learning classifies each transaction based on established historical information-based fact patterns. 

Meanwhile, Azure Synapse Analytics performs analytics modeling to deliver Power BI Embedded analytics visual reports that are available to users—EY employees or its client organizations—via the Connected Tax Gateway (CTG). These output reports become the single version of truth everyone can count on for fast and robust insights. 

"Microsoft Azure Synapse delivers fantastic levels of performance to process a lot of tax data very quickly," says Santhosh. "EY clients are seeing a 50-90 percent reduction in data transformation activities, so they now have powerful business insights and analytics at their fingertips." 

To date, an organization’s tax data has been confined to individual Excel files with no centralized storage location, which makes it nearly impossible to produce a cumulative period-over-period analysis on what that organization's tax impact might be.  

Daren says, "Having a single source of truth for tax data enables more strategic planning and risk management. This solution gives organizations access to Microsoft Power BI visualizations to truly drive greater business value while avoiding potential risk." 

Increasing accuracy and timeliness for reporting and analysis through master data alignment

The Connected Tax Gateway (CTG) web app is accessible via SharePoint Online, which is the front-end user portal for the Intelligent Tax Function Framework. This portal gives EY's clients access and the ability to manage and manipulate tax master data procured by Datasphere for their specific tax purposes. Azure Active Directory provides network access security for exchanges that occur between Microsoft 365 and Azure while row level security prevents users from accessing information they shouldn't.  

CTG offers configurable tax workflow and process optimization capabilities that cater to the needs of the full tax life cycle. CTG also helps enable deeper collaboration by allowing users to assign tasks to each other. For instance, users can leverage the CTG Teams integration to send reminders of upcoming tax compliance deadlines. Power Virtual Agents initiates the task flow once assigned and notifies the assignee via Microsoft Teams.  

EY's overall solution has a large variety of built-in, tax-provisioning capabilities that allow users to easily complete the tax-provisioning work papers they are tasked with. For example, users can generate and view Power BI reports visualizing year-over-year tax adjustments with just a few clicks. Another standard view captures activity by source type so users can look at potential outliers.  

With the solution's common data model set up at the general ledger level of granularity, users can drill down on specifics such as book entities or legal entity level impact. As Santhosh puts it, "With all this master data sitting in Power BI Embedded Analytics, users can slice and dice information any which way. It takes the burden off the tax preparer and empowers them to focus their time on more meaningful analytics and strategic insights."  

Going from zero to analytics in minutes with EY-Microsoft combined solutions

Traditional methods of tax data collection and processing would take roughly six weeks. Now, with EY-Microsoft collaborative innovations, the same can be achieved in just hours while handling larger volumes of data and delivering richer analytics and insights.   

The Intelligent Tax Function Framework solution provides master data alignment, single-source truth for tax data, and standardized data transformation maps. This has provided increased accuracy and timeliness for reporting and analysis, simplified tax operations as data gets sourced and used consistently, and resulted in considerable time savings in data collection, cleansing, and processing.  

As a result, EY clients are seeing anywhere from a 50 to 90 percent reduction in data transformation activities when they implement the Intelligent Tax Function Framework.  

Tax processors are enabled to shift time and focus away from data operations to higher-valued outputs such as strategic insights and planning. They benefit from the ease of use, speed, flexibility, and integration with Microsoft Power BI, Microsoft Excel, and other tools of the trade.  

Additionally, technology professionals benefit from the ease of implementation, scale and performance, and the ability to process a large amount of data quickly. 

Realizing the value of tax data throughout the organization 

Going forward, the solution development team hopes to establish greater integration of machine learning capabilities through the EY Tax AI Suite app to expand into more tax use cases. EY also intends to build out more functionality for Teams connectivity to support greater employee/client interaction capabilities between SharePoint Online and Teams.  

Looking to the future, EY teams are working to help clients establish a closer strategic alignment between tax and finance operations to enable greater data management and efficiency. This will ultimately unlock the tax data estate for the benefit of the entire organization and recognizes that tools such as EY CTG help enable more consolidation of—and collaboration between—disparate data sources. 

To help make this shift happen, EY aims to evolve the solution into a single platform that blends the existing Azure and Power Platform components with Microsoft Dynamics 365 Finance and Operations to underpin the Intelligent Tax Function of the future.  

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