What is TX?
TX is a form of tax technology & transformation that ensures high-quality tech initiatives are orchestrated such that people, processes, and data-driven technology adapt, converge, and transform as one over time, thereby improving ROI by 200-300%.
"How do you prepare for a world you do not recognize?" - Seth Mattison.
The answer to Seth Mattison's question is "at a pace that suits you," whether slow or fast. What's important is that progress is made, the target state has been identified, key stakeholders understand its value, and your journey is benchmarked.
Without TX, tech investments are typically driven by:
- pain points as perceived from traditional viewpoints, or
- the search for incremental improvements to processes constructed to old-world standards.
Root causes and the fundamental shift of digitalization remain hidden, as do the benefits.
TX breaks with the belief that just buying and installing technology causes transformation or brings the benefits that everyone knows are available but crimped by lowered expectations.
TX Law #1: Transformation drives value, not technology
The conditions needed to benefit fully from technology are predominantly human ones.
TX Law #2: 'Data' before Automation
Digitalization demands âtax data right first time at source,â not process automation.
TX Law #3: Tax owns Tax, No Exceptions
Technology enables tax to be responsible for tax and tax data at source company-wide.
TX Law #4: Transformation is a Journey, Not a Project
Transformation resists familiar frames of reference until experienced firsthand over time.
TX Law #5: Transformed skills are 80% âsoftâ and only 20% tax or IT
Effective taxtech & digitalization is 80% 'soft' transformation and only 20% Tax or IT skills.
What do the Five TX Laws mean for today's tax professionals?Â
The Five TX Laws are a form of universal truth. We know this because, after taking the tech-centric route for some time, astute individuals always arrive at the same conclusions.
Here is a conversational narrative that provides real-world context in everyday language. For this, we imagined chatting with an intelligent friend, sipping brandy in comfortable armchairs by a fire (mental imagery inspired by The Economist Style Guide).
 Fireside chat:
Taxologist: "OK, let's face it. There's no digital value proposition without technologyâthat's why we're all here in the first placeâbut the lion's share of that value is left on the table unless we rethink the conceptual framework around how it's realized. The big problem is mindset. People want digital, but they don't yet think digital. Culturally, their collective compass is set according to the business principle of successful arbitration of goods, labor, transport, and capital. If that's their hammer, then every problem looks like a nail. Lindsay Herbert calls it 'an industrial response to digital problems' in her book on digital transformation."
Intelligent Friend: "Come on! People know better than that. They understand that technology isn't the same as factories, workers, and delivery vans."
Taxologist: "Intellectually, yesâI'm generalizing, of course, but in practice, they have yet to recalibrate their daily thought patterns and ways of working for the digital aspects of business. When the rubber hits the road, deeply ingrained habits die hard. A troubled project history doesn't help either. If they've struggled in the past, they get tunnel vision about how, this time, they will move to the latest tech without mishap, and can easily lose sight of what it really means."
Intelligent Friend: "So, what does it really mean?"
Taxologist: "In simple terms, it means that technology alone isn't enough. And I'm talking about major enterprise solutions with vast data models and business databases here, not just workflows or personal productivity tools. The real value here comes from digital capability enhancing transparency, control, and insight on a scale beyond most people's usual field of reference. The tax authorities are starting to see that now. Take Italyâthey cut their VAT gap in half within a year of introducing e-invoicing. Now that's value!"
Intelligent Friend: "So, what's the problem?"
Taxologist: "The problem lies in how that actually works, the exact mechanisms, the vision needed to set it in motion, and the skills needed to keep it going in a constantly changing world. For instance, the Italians aren't sure how to halve that gap again or whether a different strategy would be better or worseâand they've barely scratched the surface in terms of finding answers in the data they've collected. You must remember that these systems are just representations of things that exist or events that happen in the real world, and they're far from perfect. They need a lot of helpâbut more from functional people, not IT. The people who know and work every day in that world must learn how their digital representations operate and the new ways they create valueâand that's quite different from the resource arbitration I just mentioned. As it turns out, most of that new value is only realizable from a transformed state. Without transformation, the technology costs too much and never works as well as it should anyway."
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Change is hard and does not happen overnight - there is no silver bullet - but lack of vision or a good plan leads to partial solutions, frustration as the true challenges of technology reveal themselves, and a fear or reluctance to approve further foundational investments.
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