Total Economic Impact
Cost Savings And Business Benefits Enabled By Tax Workflow
A Forrester Total Economic Impact™ Study Commissioned By Thomson Reuters, September 2024
Total Economic Impact
A Forrester Total Economic Impact™ Study Commissioned By Thomson Reuters, September 2024
Thomson Reuters Tax Workflow, which includes software such as GoSystem Tax RS, UltraTax CS, and SurePrep, helps tax firms ensure compliance, streamline operations, and save employees’ time throughout the tax return process. With Tax Workflow’s automation capabilities, firms can eliminate data entry and error, reduce preparation and review times, and take on more clients. Additionally, the robust API capabilities available with Tax Workflow can deliver added flexibility and efficiency.
Thomson Reuters commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Tax Workflow, which includes GoSystem Tax RS, UltraTax CS, and SurePrep.1 The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Tax Workflow on their organizations.
To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed four representatives with experience using Tax Workflow. For the purposes of this study, Forrester aggregated the interviewees’ experiences and combined the results into a single composite organization that uses Tax Workflow for 5,000 tax returns a year.
Interviewees’ organizations deployed Tax Workflow by adopting GoSystem Tax RS or UltraTax CS and complementing them with SurePrep. Interviewees said that prior to using Tax Workflow, their organizations used legacy tax compliance software with limited automation and API capabilities. This left their organizations with a process for completing tax returns that was marked by poor data access, manual entry, and employee inefficiency.
After the investment in Tax Workflow, the interviewees said that employees saved significant time as the software delivered seamless data access, automation, and API functionality. Tax Workflow served as a comprehensive tax solution that handled all types of tax returns and improved efficiency and capacity. Key results from the investment include reduced preparation times, error elimination, a more effective review process, and cost savings.
Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:
Reduced preparation time by 85% with the automated transfer of data. Tax Workflow significantly reduces the time needed to prepare tax returns at the composite organization by automatically importing and intelligently mapping the necessary data. This streamlined and automated preparation process eliminates manual entry and saves more than 5 hours of employee time per tax return at the composite organization, which translates to $1.8 million over three years.
Reduced preparation time with APIs. The composite organization implements Tax Workflow through an API, which results in additional flexibility and time savings on top of those delivered by the software’s core import features. API functionality provides employees with easy access to work papers and any other data they need during return preparation without relying on specific import templates. Moreover, additional API functionality can be built out over time as needed. These efficiency gains equal $256,000 over three years for the composite organization.
Eliminated errors, resulting in a 95% reduction in employee time spent identifying and correcting errors. The automatic transfer of data with Tax Workflow has the straightforward benefit of eliminating human error at the composite organization. This greatly reduces the time needed to check and correct errors and is worth $331,000 over three years for the composite organization.
More effective and less time-consuming review process by 50%. Tax Workflow allows for seamless access to the relevant data needed for employees at the composite organization to properly review tax returns. Additionally, API functionality automates portions of the review process and provides direct access to work papers. This is worth $523,000 over three years for the composite organization.
Cost savings from decommissioning legacy solutions. Tax Workflow serves as a comprehensive tax compliance and automation solution, enabling the composite organization to decommission its legacy software. This saves it $211,000 over three years.
Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:
More time for higher-value work. The efficiency gains with Tax Workflow allow employees at the composite organization to focus more time on advisory work that delivers greater value to clients and the composite.
Capacity for more clients. The time saved with Tax Workflow also reduces workload compression at the composite and enables it to take on more clients throughout the year.
Integration and API capabilities. Tax Workflow is integrated with the composite’s other Thomson Reuters solutions and has robust API functionality. These features provide added flexibility and efficiency.
Costs. Three-year, risk-adjusted PV costs for the composite organization include:
Costs to Thomson Reuters. The composite organization pays Thomson Reuters for Tax Workflow subscriptions, implementation and professional services, and API capabilities. These costs are driven by factors like the number of users and tax returns as well as the scope of the implementation, totaling $816,000 over three years for the composite organization.
Internal effort for implementation, training, and ongoing management. A small group of FTEs at the composite organization dedicates some time to implementing Tax Workflow over the course of three months, and one FTE sets aside a small amount of time for ongoing management. Additionally, users spend an average of 2 hours learning the new solution. These costs total $97,000 over three years for the composite organization.
The representative interviews and financial analysis found that a composite organization experiences benefits of $3.10 million over three years versus costs of $913,000, adding up to a net present value (NPV) of $2.19 million and an ROI of 240%.
Return on investment (ROI)
Benefits PV
Net present value (NPV)
Payback
| Role | Industry | Revenue | Employees | Software Used |
|---|---|---|---|---|
| Tax automation manager | Tax | $1.3 billion | 6,500 | GoSystem Tax RS |
| Partner in charge of tax | Tax | $150 million | 1,200 | GoSystem Tax RS and SurePrep |
| Business technology manager | Tax | $600 million | 3,000 | UltraTax CS and SurePrep |
| Tax manager | Tax | $12 million | 100 | UltraTax CS and SurePrep |
Before deploying Tax Workflow, interviewees’ organizations used various legacy software to complete tax returns. The interviewees noted how their organizations struggled with common challenges with these solutions, including:
Time-consuming manual processes. Interviewees emphasized that a key pain point was their legacy solutions’ inability to quickly import and export data. This made tax preparation an overly manual and time-consuming process for employees. The tax automation manager noted: “[Tax Workflow] has a lot of import and export capabilities. That was a huge piece of our decision to invest.”
Limited capabilities. The existing tools at interviewees’ organizations sometimes lacked the necessary forms and sophistication to seamlessly handle all different types of tax returns. Interviewees noted the importance of having a comprehensive solution since their firms did work for a broad array of clients across various jurisdictions.
Desire for more modern and digital-first tools. A broad goal for modernization and digitization informed investment decisions at interviewees’ organizations. The tax manager said: “We needed to modernize and go digital as much as we could. Our research led us to believe that [Tax Workflow] was the best opportunity for that.”
Need for smooth integration and API capability. Existing solutions were often closed systems that were difficult to integrate with data sources or other tools. The business technology manager also noted the importance of API capability: “With things constantly evolving and changing, you want to have flexibility and the ability to try new things. Having an open, API-supporting structure — you need that.”
Based on the interviews, Forrester constructed a TEI framework, a composite company, and an ROI analysis that illustrates the areas financially affected. The composite organization is representative of the four interviewees, and it is used to present the aggregate financial analysis in the next section. The composite organization has the following characteristics:
Description of composite. The composite organization is a US-based tax firm with 1,200 employees. It completes 5,000 tax returns per year. Prior to implementing Tax Workflow, the composite used legacy software with more limited capabilities and options (e.g., in relation to import and export functionality, the number of tax forms, and API integration) to complete its tax returns.
Deployment characteristics. The composite organization replaces its legacy tax software with Tax Workflow, which is implemented through an API. There are 600 Tax Workflow users at the composite, and the software is used to complete 5,000 tax returns per year for clients comprising a broad array of sizes, complexities, and tax-related needs.
5,000 tax returns per year
1,200 employees
600 Tax Workflow users
| Ref. | Benefit | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|
| Atr | Reduced preparation time with the automated transfer of data | $715,275 | $715,275 | $715,275 | $2,145,825 | $1,778,783 |
| Btr | Reduced preparation time with APIs | $89,100 | $103,950 | $118,800 | $311,850 | $256,165 |
| Ctr | Error elimination | $133,238 | $133,238 | $133,238 | $399,714 | $331,343 |
| Dtr | More effective and less time-consuming review process | $210,375 | $210,375 | $210,375 | $631,125 | $523,171 |
| Etr | Cost savings from decommissioning legacy solutions | $85,000 | $85,000 | $85,000 | $255,000 | $211,382 |
| Total benefits (risk-adjusted) | $1,232,988 | $1,247,838 | $1,262,688 | $3,743,514 | $3,100,844 |
Evidence and data. Interviewees reported that Tax Workflow saved employee time throughout the tax return process, but they particularly emphasized the substantial time savings related to data preparation. The software provided easy access to the necessary data along with automated import and intelligent mapping, which eliminated manual entry and often saved hours of employee time per tax return. Across interviewees’ organizations, preparation times were reduced by 85% on average with Tax Workflow’s automated transfer of data.
Interviewees repeatedly described the data accessibility and automated import functionality with Tax Workflow as game changers. The imports with the correct mapping logic were also automatically created, which further streamlined tax preparation and saved employee time.
The tax automation manager said: “Accessibility of data is a top benefit of [Tax Workflow]. We don’t have folks spending additional time trying to copy and paste data in or out of the software. About 80% of a return is complete just through using the import capabilities, and that’s before using APIs.”
The tax manager added, “Having the data export features [with Tax Workflow] has been the biggest time saver and the biggest cost reduction for the staff [at my firm].”
Interviewees said that Tax Workflow served as a smart tool that knew what data to import from source documentation. They said that data was seamlessly imported from a broad array of sources, including 1099 consolidated statements, W-2s, Schedule M forms, trial balances, and white forms.
The Tax Workflow implementations at interviewees’ organizations entailed either GoSystem Tax RS or UltraTax CS, usually coupled with SurePrep. Interviewees said that the different software available with Tax Workflow worked together smoothly to organize data, delegate tasks, and automate the tax return process.
The tax manager described the value of UltraTax CS combined with SurePrep: “The integration of the [Tax Workflow software] is a huge time savings. SurePrep has the optical character recognition and the ability to export that data directly to UltraTax CS. That’s the biggest time-saver for me during tax preparation, and everybody in my firm would probably agree.”
Similarly, the partner in charge of tax spoke of the value of GoSystem Tax RS working with SurePrep: “[GoSystem Tax RS and SurePrep] both standardize how the tax return is prepared and automate that process. They’re tremendous software solutions for operational efficiency.”
The business technology manager added: “SurePrep is a superior product. It’s a differentiator. It provides time savings and efficiency.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite completes 5,000 tax returns per year. Prior to Tax Workflow, on average each return required 6 hours of employee time spent on importing data as part of the tax preparation process.
With Tax Workflow, employee time spent on data import is reduced by 85%.
The fully burdened hourly rate for employees is $33.
Risks. The benefit of reduced preparation time with the automated transfer of data will vary based on:
The number of tax returns and the amount of employee time spent on data import prior to using Tax Workflow.
The availability of tools that assisted with data import prior to using Tax Workflow.
The average fully burdened salary of employees.
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $1.8 million.
Time saved on tax preparation
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| A1 | Tax returns | Composite | 5,000 | 5,000 | 5,000 | |
| A2 | Average time spent per tax return importing data without Tax Workflow solutions (hours) | Composite | 6 | 6 | 6 | |
| A3 | Reduction in time spent with Tax Workflow solutions | Interviews | 85% | 85% | 85% | |
| A4 | Time saved per tax return with Tax Workflow solutions (hours) | A2*A3 | 5.1 | 5.1 | 5.1 | |
| A5 | Total employee time saved with Tax Workflow solutions (hours) | A1*A4 | 25,500 | 25,500 | 25,500 | |
| A6 | Fully burdened hourly rate for an employee | Composite | $33 | $33 | $33 | |
| At | Reduced preparation time with the automated transfer of data | A5*A6 | $841,500 | $841,500 | $841,500 | |
| Risk adjustment | ↓15% | |||||
| Atr | Reduced preparation time with the automated transfer of data (risk-adjusted) | $715,275 | $715,275 | $715,275 | ||
| Three-year total: $2,145,825 | Three-year present value: $1,778,783 | |||||
Evidence and data. Some interviewees’ organizations used an API with their Tax Workflow implementation and saw additional tax preparation time savings on top of those driven by the solution’s core data import features. APIs delivered added flexibility and time savings throughout the tax return process, and interviewees reported that preparation times were further reduced as these APIs allowed easy access to any data they needed, including work papers, without reliance on specific import templates.
The tax automation manager explained that their APIs with Tax Workflow provided efficiency in addition to that delivered software’s core capabilities: “With the API, we take data accessibility a step further. We’re not limited to specific imports. We can now pull any data point using the API. I can pull specific schedules, pull the information into my work papers, and then push it to the software. That’s a huge benefit.”
Interviewees said the APIs provided a direct connection between the software and work papers and that they could build the imports and mappings they wanted without relying on specific templates.
The tax automation manager added: “Being able to get partner information or admin data or apportionment [with the Tax Workflow API] has saved countless hours. … There isn’t any data we haven’t been able to push and pull when we needed to.”
Interviewees noted that over time, they could continue to develop new API functionality with Tax Workflow to meet their needs. Other examples that drive efficiency included automatically creating users and assigning permissions at the start of the tax return process as well as live sync connections between GoSystem Tax RS and SurePrep so that data only needed to be reviewed in one place.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite completes 5,000 tax returns per year.
With Tax Workflow APIs, employee time spent on preparation is reduced. On average, the time saved per return is 0.6 hours in Year 1, 0.7 hours in Year 2, and 0.8 hours in Year 3.
The fully burdened hourly rate for employees is $33.
Risks. The benefit of reduced preparation time with APIs will vary based on:
The number of tax returns and the employee time spent on tax return preparation prior to using Tax Workflow.
Whether an API is implemented and the capabilities built and utilized.
The average fully burdened salary of employees.
Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $256,000.
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| B1 | Tax returns | Composite | 5,000 | 5,000 | 5,000 | |
| B2 | Average time saved per tax return accessing work papers due to API with Tax Workflow solutions (hours) | Composite | 0.6 | 0.7 | 0.8 | |
| B3 | Total employee time saved with Tax Workflow solutions (hours) | B1*B2 | 3,000 | 3,500 | 4,000 | |
| B4 | Fully burdened hourly rate for an employee | Composite | $33 | $33 | $33 | |
| Bt | Reduced preparation time with APIs | B3*B4 | $99,000 | $115,500 | $132,000 | |
| Risk adjustment | ↓10% | |||||
| Btr | Reduced preparation time with APIs (risk-adjusted) | $89,100 | $103,950 | $118,800 | ||
| Three-year total: $311,850 | Three-year present value: $256,165 | |||||
Evidence and data. Interviewees explained that the automatic transfer of data with Tax Workflow had the straightforward benefit of eliminating human error. This greatly reduced the employee time needed to check and correct errors. Among interviewees who could quantify it, the employee time spent identifying and correcting errors was reduced by 95% on average.
According to interviewees, Tax Workflow’s automation eliminated the mistakes that would sometimes occur when employees used their legacy software and had to manually input data.
The partner in charge of tax said that employees still exercise judgment and effort to prevent error, but that Tax Workflow makes that significantly easier. They continued, “Because the [Tax Workflow] software automates the process, it greatly assists and complements the professional [in eliminating error].”
Interviewees added that the software specified if there were any issues with the flow of data, such as variance across related data. This meant that potential errors were easily identifiable.
More broadly, interviewees discussed how Tax Workflow’s increased accuracy ultimately mitigated risk. They noted that inaccuracy could damage client relationships and, in more extreme cases, lead to penalties.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite completes 5,000 tax returns per year. Prior to Tax Workflow, on average each return required 1 hour of employee time to correct errors.
With Tax Workflow, employee time spent on correcting errors is reduced by 95%.
The fully burdened hourly rate for employees is $33.
Risks. The benefit of error elimination will vary based on:
The number of tax returns and the employee time spent on error correction prior to using Tax Workflow.
The amount of errors and the tools in place to prevent and correct them prior to Tax Workflow.
The average fully burdened salary of employees.
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $331,000.
Time saved correcting errors
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| C1 | Tax returns | Composite | 5,000 | 5,000 | 5,000 | |
| C2 | Average time spent per tax return correcting errors without Tax Workflow solutions (hours) | Composite | 1 | 1 | 1 | |
| C3 | Reduction in time spent with Tax Workflow solutions | Interviews | 95% | 95% | 95% | |
| C4 | Time saved per tax return with Tax Workflow solutions (hours) | C2*C3 | 0.95 | 0.95 | 0.95 | |
| C5 | Total employee time saved with Tax Workflow solutions (hours) | C1*C4 | 4,750 | 4,750 | 4,750 | |
| C6 | Fully burdened hourly rate for an employee | Composite | $33 | $33 | $33 | |
| Ct | Error elimination | C5*C6 | $156,750 | $156,750 | $156,750 | |
| Risk adjustment | ↓15% | |||||
| Ctr | Error elimination (risk-adjusted) | $133,238 | $133,238 | $133,238 | ||
| Three-year total: $399,714 | Three-year present value: $331,343 | |||||
Evidence and data. Interviewees said that Tax Workflow allowed for seamless access to the relevant data needed to properly review tax returns. Additionally, some interviewees’ organizations used API functionality to automate key parts of the review process and provide direct access to work papers. At the interviewees’ organization, the tax return review process was 50% faster on average due to Tax Workflow.
Interviewees said that when using their legacy software or manual methods, such as spreadsheets or paper, employees who reviewed tax returns had to navigate multiple tabs or flip through pages to locate the needed numbers. In contrast, they said that with Tax Workflow, the needed information was highly accessible and easy to use. The tax automation manager reported, “We’ve cut down the review time by half.”
The same interviewee elaborated on the faster review process: “The review process sees a reduction of time [with Tax Workflow]. I can click one button, and it links to the needed number, so I immediately see it. I can breeze through the review almost to the point where all I need to do is look at the summary sheet, look at the printed-out tax return, and just compare numbers.”
Interviewees also noted that the review process was smoother by virtue of having a comprehensive tax compliance solution with Tax Workflow. This provided greater accuracy in real time and throughout the entire tax return process.
Some interviewees noted that they had API functionality built out for several important review points on the return, further streamlining the process and improving overall efficiency.
Tax automation manager explained: “We improve the efficiency of the review process [with Tax Workflow]. … We leverage the APIs to pull the tax return data right into the work papers and have a quickly staged validation, rather than printing a return and doing that side-by-side tick and tie.”
Interviewees added that employees could more easily conduct reviews across offices or in a hybrid workforce environment because GoSystem Tax RS and SurePrep could be accessed from anywhere.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite completes 5,000 tax returns per year. Prior to Tax Workflow, on average each return required 3 hours of employee time for the review process.
With Tax Workflow, employee time spent on review is reduced by 50%.
The fully burdened hourly rate for employees is $33.
Risks. The benefit of a more effective and less time-consuming review process will vary based on:
The number of tax returns and the employee time spent on reviewing them prior to using Tax Workflow.
The availability of tools that assisted with review prior to using Tax Workflow.
The average fully burdened salary of employees.
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $523,000.
Time saved on tax review
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| D1 | Tax returns | Composite | 5,000 | 5,000 | 5,000 | |
| D2 | Average time spent per tax return reviewing without Tax Workflow solutions (hours) | Composite | 3 | 3 | 3 | |
| D3 | Reduction in time spent with Tax Workflow solutions | Interviews | 50% | 50% | 50% | |
| D4 | Time saved per tax return with Tax Workflow solutions (hours) | D2*D3 | 1.5 | 1.5 | 1.5 | |
| D5 | Total employee time saved with Tax Workflow solutions (hours) | D1*D4 | 7,500 | 7,500 | 7,500 | |
| D6 | Fully burdened hourly rate for an employee | Composite | $33 | $33 | $33 | |
| Dt | More effective and less time-consuming review process | D5*D6 | $247,500 | $247,500 | $247,500 | |
| Risk adjustment | ↓15% | |||||
| Dtr | More effective and less time-consuming review process (risk-adjusted) | $210,375 | $210,375 | $210,375 | ||
| Three-year total: $631,125 | Three-year present value: $523,171 | |||||
Evidence and data. Interviewees said that Tax Workflow had all the forms, calculations, and capabilities their organizations needed. As such, the software served as a comprehensive solution that they used for all types of clients, from large corporations to individuals. Since Tax Workflow fulfilled their organizations’ tax preparation needs, their legacy tax solutions became unnecessary and were decommissioned.
The tax manager, whose Tax Workflow implementation centered on UltraTax CS, explained that the solution fully met their firm’s needs. They went on to state: “One of the biggest draws for me to UltraTax CS is I can do a partnership return and then do the Texas franchise tax return for it, for example. I don’t have to go find some other solution to do that.”
The partner in charge of tax using GoSystem Tax RS noted the comprehensive nature of the software: “Tax Workflow handles some of the most complicated organizational structures — Fortune 500 and other large multinational businesses with complicated structures. These are highly specialized tax returns and GoSystem Tax RS is the gold standard in the industry.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The legacy solution used prior to Tax Workflow cost $100,000 per year.
With the adoption of Tax Workflow, this legacy solution is decommissioned.
Risks. The benefit of cost savings from decommissioning legacy systems will vary based on:
The cost of legacy solutions.
The speed with which they are decommissioned.
Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $211,000.
| Ref. | Metric | Source | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|
| E1 | Cost of decommissioned legacy solutions | Interviews | $100,000 | $100,000 | $100,000 | |
| Et | Cost savings from decommissioning legacy solutions | E1 | $100,000 | $100,000 | $100,000 | |
| Risk adjustment | ↓15% | |||||
| Etr | Cost savings from decommissioning legacy solutions (risk-adjusted) | $85,000 | $85,000 | $85,000 | ||
| Three-year total: $255,000 | Three-year present value: $211,382 | |||||
Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:
More time for higher-value work. Interviewees indicated that with the time savings due to Tax Workflow, employees had more time for higher-value advisory work (e.g., focusing on adjustments or identifying additional tax benefits for clients). The tax automation manager said: “By using the automation and APIs with [Tax Workflow], we’re able to spend time on higher-value work. We’re not wasting time on data entry. We can actually add value for our clients as opposed to just making it to the finish line.”
Capacity for more clients. The employee time saved with Tax Workflow reduced workload compression at interviewees’ organizations and allowed them to take on more clients throughout the year. The business technology manager reported, “[Tax Workflow] allows us to have higher realization rates and open up the bandwidth to complete more returns.”
Integration and API capabilities. Interviewees said Tax Workflow integrated well with their other Thomson Reuters solutions and had robust API functionality. These features allowed for added flexibility and efficiency. The partner in charge of tax concluded: “The beauty with Thomson Reuters is that everything has seamless integration. They developed the system architecture so that all these individual software solutions work standalone, but also seamlessly together.”
The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Tax Workflow and later realize additional uses and business opportunities, including:
Comprehensive and scalable. Interviewees explained that in addition to providing an effective solution for their organizations’ present needs, the decision to invest in Tax Workflow was also about setting their organizations up for long-term success given the comprehensive and scalable nature of the solution.
Interviewees who were not currently using APIs with their Tax Workflow implementations nevertheless said that the feasibility of doing so was a benefit. For instance, the business technology manager said: “Having APIs opens the door to so much additional opportunity. While you might not see it today, having them keeps the possibilities open.”
Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Total Economic Approach).
| Ref. | Cost | Initial | Year 1 | Year 2 | Year 3 | Total | Present Value |
|---|---|---|---|---|---|---|---|
| Ftr | Costs to Thomson Reuters | $115,000 | $281,750 | $281,750 | $281,750 | $960,250 | $815,671 |
| Gtr | Internal effort for implementation, training, and ongoing management | $76,590 | $8,280 | $8,280 | $8,280 | $101,430 | $97,181 |
| Total costs (risk-adjusted) | $191,590 | $290,030 | $290,030 | $290,030 | $1,061,680 | $912,852 |
Evidence and data. Interviewees’ organizations paid subscription fees to Thomson Reuters for the use of Tax Workflow. Additionally, some interviewees’ organizations paid for an API integration as well as implementation and professional services.
Interviewees noted that their subscription costs were determined by factors such as the number of Tax Workflow users and how many tax returns were completed using the software.
Costs also depended on what specific Tax Workflow software was adopted. Most interviewees’ organizations used either GoSystem Tax RS or UltraTax CS along with SurePrep.
Interviewees expressed satisfaction with the support they received from the Thomson Reuters team. For example, the tax automation manager said: “Thomson Reuters does a really good job of being available for chats and calls. Anytime I’ve called, I’ve been able to find a solution.”
The same interviewee noted the beneficial customer support they received from Thomson Reuters in relation to their organization’s API implementation.
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
The composite pays $200,000 per year for the subscription to Tax Workflow.
For implementation and professional services, the composite pays $100,000 initially and $35,000 annually thereafter.
The API costs the composite $10,000 per year.
Pricing may vary. Contact Thomson Reuters for additional details.
Risks. The costs to Thomson Reuters will vary based on:
The scope of the implementation, including the number of users and tax returns.
The exact Tax Workflow software (e.g., GoSystem Tax RS, UltraTax CS, and SurePrep) adopted with the implementation.
The desired amount of implementation and professional services.
Whether or not an API is adopted.
Customer-specific pricing.
Results. To account for these risks, Forrester adjusted this cost upward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $816,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| F1 | Subscription costs | Interviews | $0 | $200,000 | $200,000 | $200,000 | |
| F2 | Implementation and professional services | Interviews | $100,000 | $35,000 | $35,000 | $35,000 | |
| F3 | API cost | Interviews | $0 | $10,000 | $10,000 | $10,000 | |
| Ft | Costs to Thomson Reuters | F1+F2+F3 | $100,000 | $245,000 | $245,000 | $245,000 | |
| Risk adjustment | ↑15% | ||||||
| Ftr | Costs to Thomson Reuters (risk-adjusted) | $115,000 | $281,750 | $281,750 | $281,750 | ||
| Three-year total: $960,250 | Three-year present value: $815,671 | ||||||
Evidence and data. Interviewees noted a small team of internal employees was involved in the implementation and ongoing management of Tax Workflow at their organizations. Moreover, Tax Workflow users spent a few hours training on the new system.
The implementation of Tax Workflow varied at interviewees’ organizations, but typically took around three months. Interviewees noted that the ongoing management of the software was minimal; on average, one employee spent around 10% of their time managing Tax Workflow.
Interviewees described user training on Tax Workflow as straightforward. The partner in charge of tax added: “Employees like the software. They quickly get acclimated on how to use the software and understand the functionality.”
Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:
Three employees dedicate 50% of their time to the implementation of Tax Workflow over the course of three months.
Once Tax Workflow is implemented, one employee dedicates 10% of their time to its ongoing management.
The fully burdened monthly rate for the implementation and management team is $6,000.
There are 600 Tax Workflow users. On average, they spend 2 hours training on the new software.
The fully burdened hourly rate for Tax Workflow users is $33.
Risks. The costs for internal effort for implementation, training, and ongoing management will vary based on:
The scope of the organization’s implementation.
The average fully burdened salaries of employees involved in implementation and ongoing management.
The average fully burdened salaries of Tax Workflow users.
The amount of time users spend on training.
The skill set of employees.
Results. To account for these risks, Forrester adjusted this cost upward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $97,000.
| Ref. | Metric | Source | Initial | Year 1 | Year 2 | Year 3 | |
|---|---|---|---|---|---|---|---|
| G1 | Length of implementation and ongoing management (months) | Interviews | 3 | 12 | 12 | 12 | |
| G2 | Internal team involved in implementation and ongoing management | Interviews | 3 | 1 | 1 | 1 | |
| G3 | Percentage of time spent on implementation and ongoing management | Interviews | 50% | 10% | 10% | 10% | |
| G4 | Fully burdened monthly rate for an employee | Composite | $6,000 | $6,000 | $6,000 | $6,000 | |
| G5 | Number of Tax Workflow solutions users | Composite | 600 | ||||
| G6 | Average time users spend training (hours) | Interviews | 2 | ||||
| G7 | Fully burdened hourly rate for a Tax Workflow user | Composite | $33 | ||||
| Gt | Internal effort for implementation, training, and ongoing management | G1*G2*G3*G4+G5*G6*G7 | $66,600 | $7,200 | $7,200 | $7,200 | |
| Risk adjustment | ↑15% | ||||||
| Gtr | Internal effort for implementation, training, and ongoing management (risk-adjusted) | $76,590 | $8,280 | $8,280 | $8,280 | ||
| Three-year total: $101,430 | Three-year present value: $97,181 | ||||||
| Initial | Year 1 | Year 2 | Year 3 | Total | Present Value | |
|---|---|---|---|---|---|---|
| Total costs | ($191,590) | ($290,030) | ($290,030) | ($290,030) | ($1,061,680 | ($912,852) |
| Total benefits | $0 | $1,232,988 | $1,247,838 | $1,262,688 | $3,743,514 | $3,100,844 |
| Net benefits | ($191,590) | $942,958 | $957,808 | $972,658 | $2,681,834 | $2,187,992 |
| ROI | 240% | |||||
| Payback | <6 months |
The financial results calculated in the Benefits and Costs sections can be used to determine the ROI, NPV, and payback period for the composite organization’s investment. Forrester assumes a yearly discount rate of 10% for this analysis.
These risk-adjusted ROI, NPV, and payback period values are determined by applying risk-adjustment factors to the unadjusted results in each Benefit and Cost section.
The initial investment column contains costs incurred at “time 0” or at the beginning of Year 1 that are not discounted. All other cash flows are discounted using the discount rate at the end of the year. PV calculations are calculated for each total cost and benefit estimate. NPV calculations in the summary tables are the sum of the initial investment and the discounted cash flows in each year. Sums and present value calculations of the Total Benefits, Total Costs, and Cash Flow tables may not exactly add up, as some rounding may occur.
From the information provided in the interviews, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in Tax Workflow.
The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Tax Workflow can have on an organization.
Interviewed Thomson Reuters stakeholders and Forrester analysts to gather data relative to Tax Workflow.
Interviewed four decision-makers at organizations using Tax Workflow to obtain data about costs, benefits, and risks.
Designed a composite organization based on characteristics of the interviewees’ organizations.
Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.
Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
Benefits represent the value the solution delivers to the business. The TEI methodology places equal weight on the measure of benefits and costs, allowing for a full examination of the solution’s effect on the entire organization.
Costs comprise all expenses necessary to deliver the proposed value, or benefits, of the solution. The methodology captures implementation and ongoing costs associated with the solution.
Flexibility represents the strategic value that can be obtained for some future additional investment building on top of the initial investment already made. The ability to capture that benefit has a PV that can be estimated.
Risks measure the uncertainty of benefit and cost estimates given: 1) the likelihood that estimates will meet original projections and 2) the likelihood that estimates will be tracked over time. TEI risk factors are based on “triangular distribution.”
The present or current value of (discounted) cost and benefit estimates given at an interest rate (the discount rate). The PV of costs and benefits feed into the total NPV of cash flows.
The present or current value of (discounted) future net cash flows given an interest rate (the discount rate). A positive project NPV normally indicates that the investment should be made unless other projects have higher NPVs.
A project’s expected return in percentage terms. ROI is calculated by dividing net benefits (benefits less costs) by costs.
The interest rate used in cash flow analysis to take into account the time value of money. Organizations typically use discount rates between 8% and 16%.
The breakeven point for an investment. This is the point in time at which net benefits (benefits minus costs) equal initial investment or cost.
Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
1 Total Economic Impact is a methodology developed by Forrester Research that enhances a company’s technology decision-making processes and assists vendors in communicating the value proposition of their products and services to clients. The TEI methodology helps companies demonstrate, justify, and realize the tangible value of IT initiatives to both senior management and other key business stakeholders.
Readers should be aware of the following:
This study is commissioned by Thomson Reuters and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.
Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in Tax Workflow. For the interactive functionality using Configure Data/Custom Data, the intent is for the questions to solicit inputs specific to a prospect's business. Forrester believes that this analysis is representative of what companies may achieve with Tax Workflow based on the inputs provided and any assumptions made. Forrester does not endorse Thomson Reuters or its offerings. Although great care has been taken to ensure the accuracy and completeness of this model, Thomson Reuters and Forrester Research are unable to accept any legal responsibility for any actions taken on the basis of the information contained herein. The interactive tool is provided ‘AS IS,’ and Forrester and Thomson Reuters make no warranties of any kind.
Thomson Reuters reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.
Thomson Reuters provided the customer names for the interviews but did not participate in the interviews.
Matthew Carr
September 2024
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