Question

TaxWise has made several acquisitions in recent years as part of its growth strategy. While these acquisitions have helped the company expand its service offerings and client base, there have been challenges with integrating the acquired businesses. One challenge that TaxWsie has faced is the timeliness and inconsistent approach to acquisitions integration, which has created ambiguity of responsibility and impacted the time to close during month-end.

These integration and system challenges have had a significant impact on TaxWise. Delays in integrating acquired businesses can result in missed opportunities for revenue growth and negatively affect the overall performance of the organization. Moreover, maintaining separate systems and processes for acquired businesses can lead to duplicative efforts and increased organizational costs.
Despite steady growth in recent years, TaxWise is concerned about inefficiencies in its back office operations, which are causing the cost of running the back office to grow faster than revenue. This has become an even more pointed issue, as the organization is looking to grow significantly over the coming years, but is worried that back office costs may meet, or even succeed, the growth rate of revenue.
To address these concerns, TaxWise's management team is exploring the option of implementing a shared service model for the Finance, HR, and IT functions. Currently, each business unit has its own department for these functions. Adopting a shared service model could help TaxWise increase efficiency, reduce costs, and streamline processes. They are also considering investing in new internal systems, to help deliver services – specifically investing in a new cloud based finance and HR system, which would support self service and better data analytics for end users. The estimated cost of this system and transformation of processes is $20M, but it is unknown how they would generate efficiencies, and how long it would take to achieve a return on the investment.

Answer 1

When organizations acquire other businesses, integration challenges can arise, leading to missed opportunities for revenue growth and increased costs. TaxWise is considering implementing a shared service model and investing in a new cloud-based system to address these concerns and increase efficiency.

Step-by-step explanation:

When an organization grows larger through acquiring other businesses, it often encounters challenges with integrating the acquired businesses. One challenge is the timeliness and inconsistent approach to integration, which can create ambiguity and impact the time to close during month-end. This can result in missed opportunities for revenue growth and increased organizational costs.

To address these concerns, TaxWise's management team is considering implementing a shared service model for Finance, HR, and IT functions. Adopting a shared service model can help increase efficiency, reduce costs, and streamline processes. Additionally, TaxWise is exploring the possibility of investing in a new cloud-based finance and HR system to support self-service and better data analytics for end users.

The estimated cost of this system and transformation of processes is $20M, but the efficiency gains and return on investment are unknown.