This is the fourth installment of our Tax Technology Corner. As a corporate tax professional, you know how important technology is and how it’s evolving at warp speed. With new regulatory and compliance initiatives in the federal, state, and international areas, landmark tax reform legislation, and globalization of tax monitoring and enforcement, keeping up with tax technology is not a luxury—it’s a necessity. Each installment of this column will pair a taxpayer with a service provider. Together, in Q&A format, they’ll tell a story about how they have worked together to solve a specific tax problem, implement a better solution, cut costs, or improve productivity. In this installment, Savilla Kaltner, executive director of tax at MSCI Inc., and Jamie Eagan, vice president of product management, tax, for Longview Solutions, discuss how they dealt with a prior provider pulling a product from the market. Michael Levin-Epstein, senior editor of Tax Executive, moderated the discussion.
Michael Levin-Epstein: Could you each give us a little background on your organizations?
Savilla Kaltner: MSCI is a leading provider of critical decision support tools and services for the global investment community. With over forty-five years of expertise in research, data, and technology, we power better investment decisions by enabling clients to understand and analyze key drivers of risk and return and confidently build more effective portfolios. We create industry-leading research-enhanced solutions that clients use to gain insight into and improve transparency across the investment process. Headquartered in New York, we have thirty-one offices in twenty-one countries. Our clients include some of the world’s largest investors, including pension funds, sovereign wealth funds, asset managers, hedge funds, banks, and more.
Jamie Eagan: Longview Solutions is a corporate performance management company. We’ve been around for twenty-five years, entering the tax space in 2006 with our tax provision offering. Longview recognized the strategic value our solution can bring to tax organizations and [has] branched out into other solutions beyond provision related to country-by-country reporting, tax analytics, operational transfer pricing, and a tax data hub. We’re focused on delivering strategic value to leading tax and finance organizations worldwide. As a company, we have roughly 1,200 customers across our connected finance product lines worldwide. We’re headquartered out of Markham, Ontario, with offices in London, Dusseldorf, Paris, San Mateo, and Chicago.
Levin-Epstein: Savilla, could you describe the issues or concerns that your company had and why you reached out to Longview to help you deal with those tax issues?
Kaltner: We were using a different service provider for computation of the income tax provision. That provider pulled their product from the market unexpectedly. We were in a position where we had very little time to identify, select, and implement a global software solution for income tax provision accounting. We went through an extensive vendor selection process with the top three vendors, which included Longview. They were extremely patient with our many questions, and we found that their solution offered us the most comprehensive set of features and extremely relevant analytics, as well as flexibility to customize the solution to fit MSCI’s needs.
“We were in a position where we had very little time to identify, select, and implement a global software solution for income tax provision accounting. We went through an extensive vendor selection process with the top three vendors, which included Longview.”
Evolving From a Different Mindset
Levin-Epstein: Jamie, why do you think that Savilla’s company chose Longview?
Eagan: Without restating Savilla’s points, I think one of the key differentiators for Longview in the tax space is that we evolved out of a different mindset than our key competitors. The foundation of our product evolved out of being able to strategically model and report within a dimensional, hierarchical-driven system. The inherent benefits of that DNA—reporting flexibility, modeling capabilities, the ability to generate ad hoc reports—and the extensibility of the platform really sets us apart from our competitors. A number of our key competitors, not necessarily all, evolved out of the compliance space, and those solutions aren’t really set up to be strategic in nature or allow for extensibility, ad hoc reporting abilities, and the breadth of modeling capabilities that our solution does. I think MSCI recognized that early on.
Levin-Epstein: Could both of you describe the working relationship that you had?
Kaltner: Our working relationship was very collaborative. We worked with a number of individuals from their product support team as well as a third-party implementation team. Across the three groups—MSCI tax as well as Longview and the third-party implementer—we had an excellent working relationship, and it allowed us to really take advantage of everything that Longview’s platform had to offer. It’s constantly evolving, but I’ve found it to be a very strong relationship, and certainly it has been extremely valuable, both at the time of our crisis and as we’ve gone on to improve and refine our data input and calculations.
Eagan: Just building off of that, we often work with solution providers in the tax space in a collaborative nature. One of the things we really pride ourselves in, whether we are engaged directly with customers or supporting a technology solution provider, is being able to listen, identify team pain points, and really look for areas where we can drive the greatest value in our customer’s investment. A big part of that is being flexible, applying best practices, and, finally, knowing how to get the most out of our solution given the customer’s requirements.
“What we still were able to do was listen to them through the requirements phase and make sure that we didn’t close off any avenues around what were the immediate needs and what were the long-term goals. We can do that through platform capabilities, applying best practices.”
Levin-Epstein: What are the keys to successful collaboration?
Kaltner: I think that open communication, constant ongoing updates, and strong project management can help lead to a successful collaboration. We have been able to identify and take advantage of all the components of the tax solution that were available and implement those over time. We started with our emergency needs and then, as time has gone on, we’ve implemented various other components, such as the tax-basis balance sheet, country-by-country reporting, analytics functionality, and advanced reporting. We’ve been able to globally standardize our work papers for a monthly close and have saved significant time off our close using Longview. We cut our year-end time by approximately two weeks for tax, which is tremendous. We’ve been extremely happy with the working relationship and [the] Longview team’s willingness to partner with us and really help us get the most out of the platform that we can.
Eagan: A couple of things that I would add. Obviously, at the beginning of an engagement, especially in MSCI’s case, there was clearly some external pressure that shortened the runway. What we still were able to do was listen to them through the requirements phase and make sure that we didn’t close off any avenues around what were the immediate needs and what were the long-term goals. We can do that through platform capabilities, applying best practices, and listening to “Here’s what we have to do, and here’s what we have to do from a block-and-tackle perspective, but here’s our vision.” And if this is where our vision is, let’s not close off any avenues. Our product, by its very nature, allows for the flexibility to meet an organization’s vision. The second thing, and I think Savilla would certainly agree, is that we’re nimble enough as an organization that we can be responsive with our product to customers’ needs. Certainly we’ve had conversations over the course of the relationship with MSCI on how they think we can improve our product, provide a better result. Our team is nimble enough to take that feedback under advisement, gain consensus and best practice from other clients and TSPs, and deliver on those improvements at an increasing cadence. If you were to look at how our product has evolved from 2006 to now, unquestionably the pace and cadence of our product improvements have increased over that time frame, and that’s due to the strength of our relationships with companies like MSCI and our solution providers that we partner with on the implementation side as well.