Emerging Technologies for Revenue Agencies - Accenture Research

EMERGING
TECHNOLOGIES
FOR
AGENCIESAccenture Public Service
Emerging Technologies
Research
REVENUE

REACHING OUT TO A NEW
LEVEL OF CAPABILITY
EMERGING TECHNOLOGIES – advanced
analytics, predictive modeling, machine
learning, automation, biometrics and
natural language processing – have ushered
in a new era of capability for revenue
agencies, in much the same way that
computerization did in the 1960s and 70s.
But how far have revenue agencies
progressed with these technologies? What
exist to further development? And what can
be done to speed up their implementation?
Accenture’s Public Service Emerging
Technologies Research surveyed nearly 800
public service technology leaders, in nine
countries, to shed light on these questions.

Revenue agencies lead the way
Revenue agencies are well aware of the potential
benefits of this new wave of technologies – and they
know that these benefits are badly needed.
In fact, revenue agencies have a greater sense of
urgency than other public services, recognizing
the limitations and negative consequences of a
failure to adopt emerging technologies such as data
analytics and predictive modeling.
Many have already developed analytics functions
building capabilities in data collection, curation, and
the application of advanced analytics. These
capabilities are readily applicable to other
emerging technologies, so having these in place
speeds the route to intelligent automation, machine
learning, biometrics and others.
of revenue agencies
expect to be less able to
meet service demands
(Other public services:
56%)
If they don’t implement intelligent
technologies over the next two years:
of revenue agencies
expect to be less able to
attract skilled workers
(Other public services:
54%)
66%
63%

Building on progress in analytics
Revenue agencies have progressed further in their
use of advanced analytics and predictive modeling
than other public services.
Much of their progress has been in audit case
selection and prioritization, but revenue agencies
have also expanded their use of data into debt
management, customer service improvement and
non-compliance prevention.
They are also making greater use of open source
technologies, bespoke models for specific risk types
and unstructured data, and are integrating new data
of revenue agencies are
implementing/piloting
advanced analytics and/or
predictive modeling (Other
public services: 63%)
aware of advanced analytics
tax administrations in the OECD
are using advanced analytics for
audit case selection and
prioritization(1)
78%
96%
15 16

Turning analysis into intelligent action
Data analytics can’t redefine revenue agencies on its own: it
can’t complete tasks, answer queries, execute strategies or
process the overwhelming volume of transactions that
agencies must cope with.
Other technologies will be needed for agencies to become
more pre-emptive, collaborative and agile. Emerging intelligent
automation technologies already offer enormous potential in
this area - from robotic process automation(2) to systems that
continuously “learn” from interactions with users and other
digital systems.
While the vast majority of revenue agency respondents are
aware of intelligent automation, just a small minority have
implemented or piloted it. But the high awareness suggests
that intelligent automation will be a key focus for revenue
agencies in the near future.
aware of intelligent
automation
Implemented/piloted
intelligent automation
92%
21%

The fundamental shift for us as an
organization is to go from a regulator that
remediates things that have gone wrong, to
being a facilitator that helps things to occur
right from the start.
Mike Cunnington, Deputy Commissioner for Information Intelligence
& Communications at Inland Revenue New Zealand

The high-value workforce
Implementing emerging technologies requires
an evolution of human roles. These
technologies are decades from being a
replacement for human intelligence; instead, it
is designed to augment the capabilities of the
human workers and help relieve the burden of
mundane and repetitive jobs.
of revenue agencies believe
that emerging technologies will
boost current employees’ job
satisfaction
79%

The greatest impact of these technologies will
be the reduction of the amount of manual
labor that is needed to be carried out by the
workforce. Thereby, mistakes will be reduced
and compliance will be enhanced, while at the
same time employees will have to spend less
time on routine and time-consuming tasks.
Abuzer Firat,
(Department IT Automation for Tax/Revenue), Germany

Adapting to continuous change
Embracing the potential of transformative
technologies demands deep structural
reorganization – from high-level strategy to IT
systems, processes and job descriptions. On the
whole, respondents to our survey have already made
good progress in evolving their processes and
business models.
But change is slower when it comes to the habits,
preferences and job descriptions: only 41 percent
have made structural changes to their workforces to
implement emerging technologies.
of revenue agencies
changed their
day-to-day processes
To accommodate emerging
technologies:
have adapted their
business models
80%
67%

Case Study
The right framework and capabilities to evolve the workforce are
crucial – something the Dutch tax administration
(Belastingdienst) recognizes. It has formed a dedicated change
management team of psychologists and behavioral scientists
support of the workforce for the technologies and helps workers
– many of whom have been doing the same work, the same way,
for many years – to adjust.(3)

The new mandate for business and technical leaders
Yet it is not just the workforce that needs
support to adopt emerging technologies.
Our survey finds a significant gulf of
knowledge and support among senior
leaders – a deficit that may well prove to be
the major barrier to implementation.
While senior leaders are bringing in
experts from outside to work on the nuts
and bolts of transformation, their personal
confidence and mandate for this way
forward is critical. One strategy is to drive
demonstrations of technology in action.
of revenue agencies report that
senior leadership are informed
about emerging technologies
and their potential
identify a lack of leadership
support and/or understanding
as a top three barrier to
adopting more intelligent
technologies
39%
52%

Being able to put a working prototype app
– which included a voice biometric – in
senior executives’ hands, and let them
experience it, really was the linchpin that
got us over the line in terms of concept.
Venetia Blackman, Assistant Commissioner for Digital Program

R&D in the revenue agency
Emerging technology development will often require
research and development (R&D) and formal innovation
programs to tailor approaches to the specific requirements
of agencies. As such, revenue agencies need to fund and
support these programs to allow emerging technologies
to flourish.
Research in the private sector shows how important this is:
some 63 percent of companies that have innovation
strategies report being skilled at using big data to solve
business problems, compared with just 13 percent of those
without a strategy. Leading tax agencies are already
demonstrating that R&D is critical to success: many
already have innovation strategies in place and some are
using approaches that are much more Silicon Valley than
public service.
of revenue agencies have
employed dedicated
R&D/innovation leads
57%

Case Study
In mid-2015, the ATO launched a “sandbox” environment –
the RAD Lab – which allows for experimental projects, new
private sector. It has already had some major successes,
developing new capabilities and increasing the speed to
market for emerging technology applications.

The public service is used to getting a
funding allocation from government and
then spending it over several years, In
our world it doesn’t work
like that.
Greg Williams, Deputy Commissioner for the Smarter Data Program at
the Australian Taxation Office (ATO).

Private sector progress
Revenue agencies can learn a lot from
organizations that invest heavily in R&D. PayPal, for
example, assesses risks by combining several
analytics techniques – including conventional
(linear) algorithms, neural networks and complex
deep-learning systems. This creates something akin
to a panel, or a jury, of analytical models, with each
voting for an outcome (e.g. whether a customer is
trustworthy or not) and delivering verdicts in
milliseconds.(5)
Some revenue agencies are already experimenting
in these more advanced areas pioneered in the
private sector – often in applications that blend
various emerging technologies. For example, voice
authentication technology incorporates aspects of
biometrics, natural language processing and
intelligent automation.(6)
of revenue agencies
track the private
sector’s successful use
of new technologies
are open to
public-private
partnerships and new
commercial models
are considering
as-a-service models
in place of in-house
development
have been helped by
the private sector to
meet customer/citizen
demand
79% 68%
72% 67%

In certain circumstances, what I'm
hearing now is that the private sector is
actually looking at us as an organization
to follow.
Venetia Blackman, Assistant Commissioner for Digital Program

REMODELING REVENUE
According to the OECD research spanning 56
countries, 40 percent of tax administrations
are being asked to do more, including
managing additional activities and
amalgamating with other services. At the
same time, 60 percent are coping with fewer
staff, with significant reductions in Australia,
Netherlands, the U.K. and the U.S.(7)
It is a massive challenge for organizations to
maintain and improve services and
performance under this pressure to do more
with less. Automation, analytics, biometrics
and other technologies are a key
way – arguably the only way – in which
agencies can cope with demand and meet
expectations.
But it is about more than that. These
innovations represent a major transformative
shift. Once completed, the revenue agency
will be redefined as a seamless enabler of
economic activity and effective government.

OECD, Advanced Analytics for Better Tax Administration: Putting
Data to Work. OECD Publishing, 2016. (Research included Australia,
Canada, China, Finland, France, Ireland, Malaysia, Mexico, the
Netherlands, New Zealand, Norway, Singapore, Sweden, Switzer
land, the U.K. and the U.S.)
REFERENCES :
(3) OECD. Advanced Analytics for Better Tax Administration: Putting
Data to Work. OECD Publishing. 2016.
(5)
(6)
(1)
(4)
(2)
(7) OECD, Tax Administration 2015: Comparative Information on
OECD and Other Advanced and Emerging Economies. OECD.
Publishing Paris. 2015
Narrative Science. Outlook on Artifical Intelligence in the
Center to Drive Efficiency, Better Experience. 14 July 2015
Enterprise 2016.2016.
Eric Knorr. How PayPal beats the bad guys with machine learning.
InfoWorld. 13 April 2015
Robotic process automation uses software to automatically
complete repetitive, structured, rules-based tasks, such as transaction
processing, data manipulation and communication between two
or more digital systems.
AUTHOR :
David Regan,
Global Managing Director,
Accenture Revenue industry
group
https://ie.linkedin.com/in/davidreganaccenture
https://twitter.com/David_M_Regan

About the research
The Accenture Public Service Emerging Technologies Research
surveyed 774 IT leaders from public service organizations in nine
countries (Australia, Finland, France, Germany, Japan, Norway,
Singapore, the U.K. and the U.S.). The telephone survey (CATI) was
conducted by Longitude Research between April and May 2016. The
survey was supplemented by in-depth qualitative interviews with
experts across these countries.
About Accenture
Accenture is a leading global professional services company, providing
a broad range of services and solutions in strategy, consulting, digital,
technology and operations. Combining unmatched experience and
specialized skills across more than 40 industries and all business
functions – underpinned by the world’s largest delivery network –
Accenture works at the intersection of business and technology to help
clients improve their performance and create sustainable value for their
stakeholders. With approximately 373,000 people serving clients in
more than 120 countries, Accenture drives innovation to improve the
way the world works and lives.
Visit us at: Accenture.com
Copyright © 2017 Accenture
All rights reserved.
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Delivered. are trademarks of Accenture.

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