TEI Roundtable No. 33: Leveraging IT for State Tax Departments During the Pandemic

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Rob Clary, Linsey Morgan, & David ShrontzIt’s difficult enough to manage state tax departments in “normal” times. But imagine if you had to do it in a pandemic. No imagination necessary anymore, of course. It’s as real as it gets, and we wanted to find out what this “new normal” has really been like, so, not surprisingly, we convened a panel of tax leaders to participate in this issue’s roundtable, including Rob Clary, former state tax manager with Ford Motor Company and now a member of PTS Services LLC, a boutique firm providing tax services to Ford and other companies; Linsey Morgan, senior tax accountant at DRB Systems, a technology and marketing company for the car wash industry; and David Shrontz, senior tax operations manager with Baker Hughes. Tax Executive’s senior editor, Michael Levin-Epstein, moderated the discussion.

Michael Levin-Epstein: When the pandemic burst on the scene, how did you start the management of your state tax department to deal with it? How did you discuss that process?

Linsey Morgan: DRB’s process is going to be a lot different than most other companies, as we had just brought all tax functions in-house at the end of 2019. The 2019 tax returns were the first year of gathering information, preparing, and filing all the returns. At the time of the pandemic, there were only two people in the tax department: my boss, Dennis McGregor, and me. I was responsible for all the tax functions, which included sales and use, state and local income tax, prepare K-1s, and prepare the federal return. I also needed to create processes for DRB’s new tax functions. My original plan was to write down the process I used to complete each task. I would then analyze the tasks and find out what worked and what needed to be improved. Well, let’s just say my original plan flew out the window at lightning speed early on in lockdown. What was most difficult was writing up processes for different tax functions when I or another employee was not in our “natural” work environment. On a positive note, I learned a lot, which I believe has better prepared me for the 2020 tax season. Also, my third grader learned about depreciation [and] sales tax and could probably prepare a tax return better than some adults.

David Shrontz: Around the time that the news of the spread of COVID-19 came out, we had had plans to hold some on-site management meetings, but those plans were immediately canceled, obviously. There was a brief scramble to cancel travel arrangements and revise the meeting format, and thankfully the meetings were held more or less as originally planned. There have also been many other similar situations where the traditional means of getting together for kickoff meetings, project workout sessions, etc., were no longer feasible for us to do in person. So, we had to get creative and rely on virtual meetings using Teams, Skype, and other tools to collaborate. Not being able to be physically together in a room and have a whiteboard where we could delve into the details face-to-face required us to rethink our approach. The timing of COVID was unfortunate, because we’ve had a lot of projects this past year. Most have been driven by organizational changes, while others are for simplification and consolidation of ERPs, tax engines, and other systems as well as for process streamlining and automation. The timing of the projects that we have had has been concurrent with the lockdowns and travel restrictions, so the teams have had to adapt. I have to say, however, that people have really done a great job of collaborating and figuring out how to achieve our goals virtually. Granted, it’s not quite the same not being able to be together in a room, and this is more evident with team-building efforts. It’s much more difficult in this environment to devise effective team building when you can’t be together face-to-face. Fortunately, we have been successful in overcoming most of the obstacles thrown at us to still achieve it.

Rob Clary: Our situation at Ford is different than Linsey’s and David’s experience. Before the world changed due to the virus, our team worked remotely on a regular basis. We are lucky that Ford is a very forward-thinking organization. Our access to technology is very robust. Pivoting to a fully remote experience was an easy adjustment. Technology implementation and management is a key responsibility for me. Remote access is a key part of implementation. I would not say there were no obstacles to going completely remote, but it was not a major disruption for our process. We have been paperless for more than ten years. Through the use of various virtual tools and our being available in a central location or through cloud access, we have been able to function at a high level without disruptions. The challenge we did experience was the loss of interaction with our non-SALT colleagues. Our function is very much influenced by international and domestic federal. It is very convenient to walk down to someone’s office and ask a question. We have lost that, so you must become organized as to who you need to talk to and when. Overall, the change to 100 percent remote access was relatively easy for our team.

Role of IT

Levin-Epstein: What role did IT play in dealing with this situation?

Morgan: Like Rob, DRB already had a lot of virtual tools in place for our remote employees. I already had access to be able to work from home remotely, so the transition from an IT perspective was seamless. DRB’s IT team did an amazing job getting all of our employees to be able to work remotely. I am sure they worked long hours making sure everyone was able to work from home effectively. In the beginning, it was hard to log into the VPN [virtual private network] at eight a.m., but after a few weeks this issue stopped. My biggest issue was my Wi-Fi, because me and my daughter were both online at the same time. I finally had to put in a time schedule for when I ran reports so that she could complete her schoolwork. From a software standpoint, there was a lot of coordination in order to download all the different add-ins needed to use the new software. I can be very impatient when it comes to technology and I hate not being able to download add-ins for myself. When you are in the office you can just walk over to IT and ask them to download the add-in for you; this can’t be done when all the employees are physically working from different locations. Therefore, I would have to email IT and wait for help to download anything I needed for the tax software to run. I must say that our IT team always responded quickly and for me there was not a lot of waiting or downtime because of IT-related issues. DRB’s IT department stepped up to the plate and did an amazing job.

Shrontz: Similar to what Rob had mentioned, Baker Hughes as a multinational has people spread all over the globe. As an example, we have a large center in Kuala Lumpur [Malaysia], and there is a twelve-hour time difference between Kuala Lumpur and where I am in Florida. You therefore get accustomed to managing the challenges of collaborating with people spread across multiple time zones. We also have had a lot of people working remotely for quite a while, even before COVID hit. Particularly in the IT area, it’s rather common for people to work remotely, so that hasn’t changed as significantly. In that regard, COVID has not brought about such a significant change for us; a lot of us were already accustomed to remote working. Those who work in offices or in the centers where they traditionally work together in person on-site, though, have felt some impact. From an IT perspective, however, the IT team has really risen to the occasion and has done a tremendous job of working through the issues and has not really missed much of a beat. The greater challenges are encountered more when you want to have a focused workout for a project, and you would prefer to get together somewhere on-site to work out the particular design details. That need does lend itself to be an activity you would rather do together in a room. It doesn’t mean that you can’t achieve the same results virtually, but it can require a bit more effort and creativity. Overall things have worked well despite the obstacles COVID presents, and I haven’t really noticed a significant negative impact. The projects have been progressing, and I haven’t seen any significant delays that I would attribute directly to COVID. That attests to, really, the ability of people to adapt and come up with ways to deal with the circumstances that we’re dealt.

Clary: The support we have received from the IT team has been very positive. The tax office has a member of IT assigned full-time. That gives us the ability to directly address access issues, software updates, and internal control procedures. Because we were remotely focused prior to the impact of the virus, we did not experience significant change. If we need IT support, our assigned professional contacts the right people.


Levin-Epstein: How difficult was it to team-build during a pandemic?

Morgan: I was lucky at the time of the lockdown because, as I mentioned, there [were] only two people in the department, my boss and me. So, from March to August, I really did not have to worry about a new employee or team-building. In August, DRB finally hired our first new employee to the tax team. I believe this was one of the happiest days of my life, because I could finally focus on just the state, local, and federal tax returns. The biggest challenge for me was to do the interview and training remotely. I prefer in-person interviewing and training, because you just can’t get a good read on someone from a computer screen; it is just so impersonal. Quickly I found that using cameras during Zoom meetings and making sure to ask how your team member is doing and discuss some personal things before you get into the training or the meeting has helped. I also like to send text messages to see how they are doing or a phone call so they know I am here if they need anything. Training has not been as difficult as I thought it would be in the beginning. I really love using Microsoft Teams for communication, planning, training documents, and meetings since it has a lot of different functions. I could not even imagine what I would have done if this was in the nineties or prior. Technology has come such a long way to be able to have that connection with team members that you have only met in person a couple of times. Although software programs help, I really miss the lack of random interruptions and conversations from other employees.

Shrontz: I would say that in many ways we face some of the same situations. Obviously, communicating back and forth with people via email is not always ideal. Whenever possible, it’s better to be able to hold a meeting. Of course, if you can have video meetings, then it’s about as close as you can get to being there in person. I do believe that when communicating with people that a phone conversation is better than email because you get immediate feedback. You can hear a person’s tone, and generally you can achieve a better understanding. The communication level is also better than in email correspondence. We establish rhythm calls to make sure that we stay in touch with one another and to ensure the projects and initiatives are staying on track, and those things are important. I do notice there are some aspects about the impact of COVID that I can actually say I like a little bit better as to what’s happening, because I find that people, now that they’re in their home with their families and whatnot, are spending more time with their loved ones, and I’m learning a little bit more about people than I might have learned absent this environment. From a team-building perspective, the simple act of taking a few minutes to interact with others, asking them how they’re doing, and just bringing in the human element and checking on one another—I do like that change. We’re doing more of that now, because there is more stress on everybody. Like I said, for team-building it’s not the same as being together in a room to hold some kind of team-building activity, but as long as everybody just makes a little bit of effort, it’s not that hard to check on one another to make sure people are doing OK. Sometimes people just need to take a minute to have somebody listen. Although it can feel like we’re alone in this because we’re all separated in our individual homes, we are all going through this collectively and share a lot of the same experiences. So, just take a minute out of the day to have a little conversation with somebody and get some of the stresses off your chests. It can help alleviate some of the strain people are experiencing.

Clary: Our team has a standing check-in call every Monday morning for half an hour. It is usually not business related. Everyone talks about what is going on in their lives. Let’s face it—these types of water-cooler discussions happen in an office environment. We have regularly scheduled meetings during the week that are business related. We have technology status meetings as we have many projects in place. There are also “town hall meetings” for the entire organization, which happen once a month. Senior management provides feedback about the organization and where the business is headed. Even though we do not have that personal interaction with our colleagues, everyone is still connected. We feel that we are still a team. The communication has been good. Some people are a little shy when it comes to using their cameras. We good-naturedly rib those that will not let us see what they look like. We have found ways to stay connected even though we are not able to see one another in person.

Possible Changes in 2021?

Levin-Epstein: What do you think managing a state tax department in 2021 will be like?

Morgan: DRB is in Akron, Ohio, so some employees began to start going back into the office in July. I believe we will continue a hybrid-type work environment for a while yet. Me personally, I want to be back in the office, but there are a lot of roadblocks right now. The biggest issue is the employees with kids or those with chronic illnesses. Me, for example, my husband drives a tanker for Kenan Advantage, so he is not home during the day nor does he work in an environment where he can just drop what he is doing and work from home. The schools are trying to keep kids safe and healthy, so there is always that lingering issue of, will the kids be learning remotely, or will they stay in person? So, it is just easier for me to have a hybrid work week or just work from home full-time. Also, companies need to think of what is good for their employees without causing major disruptions to business operations. I am so lucky that I work for a company that does care about us as employees and they understand that the employees have families. My hope is that everyone is back in the office by third quarter of 2021, but I believe it will not be back to in-person working until the beginning of 2022.

Shrontz: COVID obviously has made organizations reevaluate how they do business day-to-day, and it doesn’t just involve the in-office stuff or the internal things that must go on. Obviously, we have a focus on tax in this discussion, but it also impacts how you are doing business in general and impacts how you do business with your customers. There has been some impact across the entire organization, not just in our area, and in some cases how we must render services for our customers, particularly for on-site services. We’ve been reevaluating how we do things, but whether working remotely or virtually, we are trying to limit the impact, and it’s working quite well overall. Not to say, however, that there are not some things that are difficult to get the same exact results. As an example, I recently attended a conference, which was held virtually for the first time. Attending the sessions and learning about the different things that are going on and hearing people share their best practices and experiences, whether doing so physically together in a room or whether you’re attending that virtually, was not so significantly different for me. Where there was more of a difference was in the networking. Let’s face it, when people go to a conference, obviously you’re there to learn new things, but you’re also there to share ideas and discuss issues and topics with other people. It helps you build your network and enables you to share experiences and get insight on how people have dealt with similar situations within their organization. I did find that the networking component was much less effective in a virtual environment, because it’s not like you can just sit down next to a person to have a coffee and to start a casual conversation. How do you do that virtually? That’s something that is more difficult to do, so I do think that that is something that we may have to rethink. If more conferences are done virtually, how do you ensure that effective networking remains? In that regard team-building and networking can work the same way. It’s more of an informal interaction and information sharing and is more natural in a face-to-face setting.

Clary: Ford has announced that remote status will remain through June 30, 2021. I expect that will be extended. I predict that the new year will be the same as 2020. I do not expect there will be a migration back to a traditional office environment that existed before the pandemic. I predict the experiences that we are having will become more common. There has been a fundamental change in the work environment. The technology that we have available provides the ability to be productive without being in a traditional office space. I would not want to be in the rental office space business right now [laughter]. I am hoping the virus is defeated, or at least is in substantial remission, by the vaccine becoming available to everyone. That is to be determined. I have my fingers crossed.

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