Is it a micro solution? Micro solutions,solve only one problem. Cost-Benefit Analysis, is it worthen?

Real technology: Are you buying bunch of services disguised as a tool

Is the implementation going to bea nightmare? Low implementation costand solution scalability.

CHECK LIST QUESTIONS FOR FINDING A TRANSFER PRICING TOOL

It was only a few years ago that the market began to turn towards new technologies to achieve more efficient processes in the area of finance and taxes. While working as an in-house expert, I had the opportunity to see many attempts by start-ups and big consultant offices to offer what they called “tools with new technology” for transfer pricing. In all cases they felt like a tool, but at the end were only services disguised as new technology. In my search process I decided to make a check list to try to analyze the options. The first thing I tried to define was what should be automated or improved in terms of processes.

From my point of view, there are two activities:--Operational processes and-Compliance activities

Operational issues include, for example, automatic pricing with a pre-established policy, which in simple cases is automatically resolved with SAP. P/L segmentation by legal entity and by activity, automatic calculation of net margins, comparison of company results with benchmark results etc. On the other hand, the transfer pricing aspects related to compliance include the generation and analysis of the CbCR, documentation at group and local level, and the analysis of the supply chain, among others.

What type of technology are you buying? In this new ocean of technology the trends we can find can be grouped in four main groups:

- The user centricity technology: Location-based services, Social Analytics, Digital identity, Truth identification or fact checking among others. - The Connected World Technology: Deep Mapping, Open API, Industrial IoT, Open Data etc. - Artificial Intelligence: Knowledge Graphs, Machine Driven Decisions, NLP and Speech Recognition, Computer Vision, Robotic Process Automation etc. - Disruptive Technologies: Cloud Edge, Cloud Enablement, Quantum Computing Swam Intelligence etc.

TTherefore, if you are going to buy a product you need to understand what is behind the product in terms of technology and how this technology will facilitate your work and especially the dialogue with all stakeholders including auditors.Services disguised as products generate more costs in the long term, lead to human error, make the company dependent and without full control.

Last, you need to feel comfortable while using it, it should be a user friendly tool that you enjoy!

If real new technology is behind, you will be able to solve several oper-ational processes or compliance activities with the information that is feeding the technology. Not only documentation, but risk analysis, CbCr, Value Chain analysis etc. The outcome should not be something you can achieve with good Excel formulas, the use of SharePoint or even a good knowledge of Word.

The right tool should have a low cost and effort for the user to start using the solution. It should be easily and in predictable manner scal-able based on need and available resources. For example, starting a documentation solution with couple of entities and bit by bit expanding to whole group. You have the chance to test if it is the right tool for you without entering all the MNE information and a lot of resources.One of the headaches of finance departments is that everything be-comes a mega-project. Even buying a tool that should solve problems becomes a problem. Months of installation with the costs involved and the investment in employee time internally. The most convenient is to implement quickly with low costs.

If the legislation or environment changesa development is possible

We are constantly experiencing drastic changes in tax matters and the solution must cover constant updates. If the legislation changes, the company that develops the tool must have the technical and financial capacity to adapt to the changes and be able to continue serving the customer without the latter having to make additional investments for these modifications.

In order to "sell" internally the idea of buying a tool it needs to repre-sent an attractive ROI. The product has to be sufficiently accessible and do more in less time than what the tax department can do or achieve. For example, a controlling department within a company that has a sophisticated ERP and BW system can segment the P/L in a matter of hours. What are the benefits in terms of cost and time? Is the tool going to full fill pure compliance? Or is it going to allow you reach a ddeeper level of analysis?

These are the four questions I decided were the first relevant aspects to consider while looking for a transfer pricing tool.

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