KPMG & Bruker Corporation – Boosting Tax Department Efficiency with Leading Practices for the Implementation of ONESOURCE WorkFlow Manager and DataFlow – Year 2

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SESSION # DW110

KPMG and Bruker Corp.:

Boosting efficiency with leading practices for the implementation of OWM and DataFlow – Year 2 resultsSANDY FISHER (KPMG)JOE HABAK (KPMG)GREG YEARGAN (KPMG)JOHN CARR (BRUKER CORP.)

• The following information is not intended to be “written advice concerning one or more Federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.

• These materials are copyrighted to the company of the presenter presenting them.

• Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates.

NOTICE

• Sanford “Sandy” Fisher is a managing director in KPMG’s National Tax Transformation (TT) practice based out of the New York office. He has over 25 years of tax experience, helping tax departments enhance, optimize, and improve their resources, processes, technology, data, strategy, and controls. Sandy has managed a significant number of transformational projects related to tax provision software implementations, tax accounting performance improvement, tax technology solutions, MS SharePoint configurations, tax data warehousing, IFRS/ASC 740, and solving operational issues related to the financial reporting for taxes.

• Sandy is a ONESOURCE Certified Implementer and uses these products to help a tax department become more effective and efficient. He has authored articles for Accounting Today, and the Association for Computers in Taxation. Sandy was featured and interviewed in an article by NJBiz entitled “Accountants – Software Creates Less Taxing Environment”. Sandy has an MBA from Fordham University and a BSBA from the American University.

SANDY FISHER

• Joe is a Tax senior manager in KPMG LLP’s TT practice and is the national lead for OWM and DataFlow (ONESOURCE Certified Implementer in OWM and DataFlow). Joe has over 11 years of experience in tax process/data management improvement services, helping clients to create holistic and global tax transformation and technology solutions by connecting their tax data sources, processes, and people into a globally aligned, centralized, standardized, automated, and integrated platform.

• Before joining KPMG, Joe worked at another Big Four accounting firm and with Thomson Reuters Tax & Accounting, performing tax technology and related process redesign services that improve and help achieve enhanced tax processes and leading practices in tax departments/functions (specializing in OWM). Joe has a BCom in Accounting and Management from the University of Wollongong.

JOE HABAK

• Greg is a Tax manager in KPMG’s TT practice and is a member of the national team with emphasis in OWM and DataFlow (ONESOURCE Certified Implementer in DataFlow). Greg has over 10 years of experience in documenting and refining work flow process and data management improvement services, while connecting clients’ tax data sources, processes, and people through an all-inclusive design and implementation approach.

• Before joining KPMG, Greg worked at Thomson Reuters Tax & Accounting, performing corporate tax technology implementations and professional tax work flow redesign services that improve and help achieve greater efficiencies in tax processes (specializing in OWM and DataFlow). Greg has a BA in General Studies with emphasis in Marketing, Communication, and Spanish from the University of North Texas.

GREG YEARGAN

• John is the Global Head of Tax for Bruker Corp., a $2 billion manufacturer of scientific instruments. He has been a tax professional for nearly 30 years. He has over 10 years of experience developing and leading high-functioning tax teams, as well as implementation of process improvements and technology platforms that enhanced the performance of those teams.

• John has a variety of industry experience, including life sciences, automotive, publishing, and financial services. He holds a Master of Business Administration and a Bachelor of Business Administration from the University of Michigan.

JOHN CARR

• This presentation will increase your understanding of how KPMG’s TT team worked with Bruker Corp. over the past two years to design and implement a holistic tax data management and tax process improvement solution for their worldwide provision and compliance, using OWM and DataFlow and helping Bruker Corp. to:

- Create increases in efficiencies

- Save employee time and costs

- Increase controls

- Reduce risk.

• Upon completion of this session, attendees will be able to:

- Identify the key components and challenges of KPMG’s driving tax performance

- Understand how worldwide tax processes can be improved through the use of OWM and DataFlow.

OBJECTIVES

• KPMG: Driving tax performance

• Bruker Corp: Current state of tax data/process management

• KPMG: Holistic tax transformation view, using OWM and dataflow

• Bruker Corp: Future state of tax data/process management

- Year 1 (2015)

- Year 2 (2016)

- Qualitative benefits

- Quantitative benefits

• Q&A

AGENDA

KPMG: DRIVING TAX PERFORMANCE

Business issue

When companies initiate finance and tax processimprovement projects, they are faced with fundamentalquestions such as:

1. What are the company’s goals and how dothose goals contribute to overall corporate goals?

2. How can the tax department drive value to thecompany—and balance risk?

3. How should the company utilize technology toenhance its processes?

4. How should the company evaluate and communicateits progress?

DRIVING TAX PERFORMANCE

Driving business

value through tax

HighPerforming

Teams

Embedded Processes &

ControlsTimely and Accurate

Information

EnablingTechnologies

MeasuringPerformance

Reporting to Stakeholders

Tax Function Strategy

Driving tax performance

A KPMG leading practices framework to evaluatethe current state of a company’s tax function to helpclients:

1. Create a clear future-state strategy for the taxfunction

2. Identify improved process and technologyenablers

3. Develop an enhanced tax strategy, riskmanagement, and communication plan.

DRIVING TAX PERFORMANCE (continued)

Driving business

value through tax

HighPerforming

Teams

Embedded Processes &

ControlsTimely and Accurate

Information

EnablingTechnologies

MeasuringPerformance

Reporting to Stakeholders

Tax Function Strategy

Key components

• Tax function strategy – Department objectives

• High-performing teams – Review of staffing roles and training needs

• Embedded process and controls – Review current processes and controls

• Timely/accurate information – Review quality of source data and timeliness

• Enabling technologies – Review interfaces with financial reporting technology, the current tax provision, and tax return technology employed

• Measuring performance – Review of metrics for evaluating the tax function performance

• Reporting to stakeholders – Communicating progress and evaluating effectiveness in meeting stakeholder needs


Common obstacles to a leading practices tax function

• Inefficient and outdated processes and technology that excessively utilize Tax Department resources

• Inefficient processes creating a lack of resources to provide stronger tax planning and partnering with the business units

• Personnel spending too many hours on manual processes that create a less favorable work environment

• Manual processes creating “surprise” risks:

- Security and accuracy issues related to spreadsheet-based models

- Manual processes in moving data from provision to return

- Maintenance of deferred tax inventories with manual return to provision true-up processes

- Non-tax-sensitized ERP data


KPMG Tax Department Benchmarking Study 2.0

• No cost to participate—takes approximately 1.5 hours to complete online

• Over 400 companies surveyed in various industries and sizes

• Customized report prepared and delivered to participant

• Customized report benchmarks your company to peer companies by industry and revenue

• Includes debrief session with a KPMG Tax Transformation and Technology professional

• Confidential


BRUKER CORP: CURRENT STATE OF TAX DATA/PROCESS MANAGEMENT

• Bruker Corp., an international multibillion-dollar company, covers a broad spectrum of applications in all fields of research and development, which are used in all industrial production processes.

• Bruker Corp. has over 90 entities in over 90 locations in all continents.

• Bruker Corp. maintained inefficient and highly manual MS Excel spreadsheet package-based process for managing their global interim/year-end provision and compliance data collection/management

BRUKER CORP: CURRENT STATE

These manual processes proved an administrative burden for their U.S. tax dept.:

• Multiple, nonstandardized tax packages

• Tax packages were difficult to track and maintain/update

• Communication/collaboration with foreign controllers (i.e., entities) was cumbersome and noncentralized (e-mail-driven)

• Collected information was not captured in a centralized database

• Foreign controllers spent a lot of time filling out the same data in the packages that they had completed in prior quarters.

• A lack of automation meant that collecting and then consolidating the data from the multiple packages for review, analysis, reporting, etc., was complicated, time consuming, and performed manually, making it prone to potential errors/oversight.

• Also, the packages proved untimely and difficult to rollover from quarter to quarter.

BRUKER CORP: CURRENT STATE (continued)

Bruker Corp.’s MS Excel spreadsheet packages also had some internal control pain points:

• Limited version control (i.e., tracking latest versions when sending packages back and forth to/from controllers)

• Restricting/controlling access to certain critical cells (e.g., formulas, links, etc.)

• Limited ability to review/check the internal design/validity of the packages and external mapping of data to the correct end source(s)

• Data entry concerns that created risk that controllers could enter any description for changes to tax adjustments in the packages without the requirement to enter any explanations

• Finally, Bruker Corp. had limited integration of their tax packages with their ONESOURCE Tax Provision (OTP) and ONESOURCE Income Tax (OIT) systems, requiring the timely manual rekeying of data into OTP and OIT.

• In addition, tax adjustment codes and unit/company names and numbers were not fully standardized across OTP and ONESOURCE Income Tax (OIT), making data integration difficult.


• The typical quarterly interim provision cycle for Bruker Corp. lasted approximately 10 days and involved five tax staff for an equivalent of approximately 400 FTE hours.

• The typical worldwide year-end provision cycle for Bruker Corp. lasted approximately 25 days and involved seven tax staff for an equivalent of approximately 1,400 FTE hours.

• The typical foreign compliance cycle for Bruker Corp. lasted approximately 40 days and involved three tax staff for an equivalent of approximately 960 FTE hours.

• The lack of automation of Bruker’s interim/year-end provision and foreign compliance process added inefficiencies to the process, with a lack of a clear evidence of review and limited ability to tie the interim/year-end provision data in their OTP system and foreign compliance data in OIT directly back to their source tax packages.


KPMG: HOLISTIC TAX TRANSFORMATION VIEW, USING OWM AND DATAFLOW

• KPMG’s holistic approach to OWM/DataFlow designconnects all tax data sources, processes, and peopleinto a globally aligned, centralized, standardized, andintegrated platform.

• KPMG will design OWM/DataFlow to satisfy our clients’big picture compliance and reporting solution and thenimplement it in a manageable and scalable/phasedmanner, helping ensure that all the pieces will fit cohesivelyand deliver value both now and in the future.

KPMG: HOLISTIC OWM/DATAFLOW VIEW

OWM/DFplatform

WorkFlowFileRoomCalendar

Entity MgmtReportingTracking

Integration todownstreamTax SystemsReview

andAnalysis

StandardizedData

Collection

Third-PartyProviders

ProtectiveStakeholders

OWM is a custom-configurable Web-based platform (hosted by Thomson Reuters), with fully integrated Web-based modules that include: • Entity manager – Central database to store and manage entity data• FileRoom – Store and manage all documents in standardized manner in one central

database, with advanced search capabilities.• WorkFlow manager – Automated work flow system that creates a standardized electronic

binder for core tax projects/work.• Calendar – Single database of global due dates (maintained by Thomson Reuters) for

enhanced due date management.• DataFlow – Tax data collection/management tool for creating secure and standardized

Web-based Excel tax packages (with enhanced capabilities), with automated distribution, tracking, storage, extraction, consolidation, and reporting/analysis of data from a central data repository (within OWM).

• Platform – Home page for OWM and ONESOURCE. Contains configurable gadgets and dashboard reports with real-time info.

OWM – A TAX PROCESS AND DATA MANAGEMENT SOLUTION

1. Utilize OWM as a central Web-based collaborative platform, that standardizes all tax processes, due date management, legal entity information management, document management/archive and overall tax data management, in a centralized database/platform accessible across ONESOURCE applications, with real-time tracking and reporting

2. Consolidate and strengthen controls around your Excel workpapers/tax packages and processes by converting them into standardized, secure, and dynamic Web-based DataFlow Excel tax workpapers/packages, with all data managed/captured in a central data repository (within OWM); embed DataFlow packages within OWM work flows to further streamline and standardize data management processes

3. Share (push/pull) a common set of tax data across the tax/data life cycle, by utilizing DataFlow and existing ONESOURCE integration (ONESOURCE Excel Add-In) for “one source” of the truth. Data residing in DataFlow repository should be utilized for domestic/global provision and compliance workpapers and transferred into end tax source systems.

- Existing DIRECT integration with ONESOURCE Income Tax (OIT), ONESOURCE Tax Provision (OTP), ONESOURCE State Apportionment (OSA), ONESOURCE Estimated Payments (OEP), ONESOURCE Uncertain Tax Positions (OUTP), General Ledger Manager, etc.

- Third-party tax/finance source system integration capability.

OWM – KPMG’S LEADING PRACTICES

OWM – KPMG’S THOROUGH APPROACH

Third-party Tax Systems

OIT/OTP/OSA/OEP/OUTP

Data Request Templates

Extraction File (Excel or CSV)

Analytical/Consol. Templates

Administration Templates

Global DataFlow Repository (in

OWM)

Other data(e.g., qualitative)

Finance/ERP/GL Systems

GLM (central master chart of

accounts)

DATA

PRO

CESS

OWM Work Flow Manager

Events/DueDates

Work FlowTasks

Documents

DataFlow

Work FlowChecklists

Notes

IntegratedTools andReporting

KPMG is a Certified Implementer of ONESOURCE tax applications and tools.

• Our KPMG TT professionals are OWM and DataFlow industry leaders and have undergone in-depth training and certification for OWM and DataFlow.

• We have the experience and have developed leading practices in the full cycle implementation of OWM and DataFlow, which covers the overall design, build/configuration, testing, training, and rollout support of these systems.

• Combining our tax technical, tax process, tax technology, and project management knowledge, KPMG’s TT practice is able to provide our clients with an OWM and DataFlow solution that helps create a next-generation leading global tax department that achieves optimal levels of efficiency and productivity.

OWM – KPMG’S LEADING PRACTICES

BRUKER CORP: FUTURE STATE OF TAX PROCESS/DATA MANAGEMENTYEAR 1 (2015)YEAR 2 (2016)QUALITATIVE BENEFITSQUANTITATIVE BENEFITS

• KPMG’s TT team worked with Bruker Corp. to significantly improve their inefficient global interim/year-end provision and compliance data collection/management processes, by using KPMG’s leading practices for the design and development of a holistic tax technology and transformation solution using OWM and DataFlow.

• At the onset, KPMG conducted a number of white-boarding sessions to assess Bruker’s current state, determine key requirements, and design an efficient and effective future state.

BRUKER CORP: FUTURE STATE YEAR 1 (2015)

Once the future-state OWM/DataFlow process and design were agreed upon, the implementation/build phase began.

• DataFlow was used to create a standardized tax package for Bruker’s interim provision process for all entities, with automated distribution, collection, tracking, storage, and extraction/consolidation (for reports, analysis, review, etc.) of data from a central DataFlow repository.

• KPMG designed and built the future-state interim provision DataFlow package to integrate with Bruker’s OTP system, allowing for the same set of data to be leveraged across their provision data life cycle (i.e., from wide-ranging systems).


Scaling out from Year 1 enhancements, KPMG worked with Bruker to achieve the following Year 2 integrated improvements:

• DataFlow was used to create a new standardized tax package for the worldwide year-end provision process for all entities (for end of 2015) with integration to Bruker’s OTP system.

• DataFlow was used to create a new standardized foreign compliance tax package with integration to Bruker’s OIT system.

- This package also pulls data from the worldwide year-end provision package.

- This package will also push data to Bruker’s Q3 (i.e., interim) provision package (see next page).


• Currently, KPMG is updating the interim provision DataFlow package to accommodate a Q3 hard-close for Bruker

- This package will pull data from Bruker’s foreign compliance package.

• For Q4, KPMG will create one overall worldwide provision tax package in DataFlow that will incorporate both interim and year-end processes (with rollover functionality between quarters and year-end) with integration to Bruker’s OTP system

- This package will push year-end/Q4 provision data to Bruker’s foreign compliance package.


Qualitative Benefits of Bruker’s Future State with DataFlow:1. Standardization

• Standardized work flow processes via electronic work flow tasks and checklists, with automated e-mail reminders and task due date reminders

• Standardized provision and compliance tax packages in the form of DataFlow templates with full version control/history; sent to Data Providers in form of DataFlow Request (via e-mail with link) and completed by Data Provider in familiar Excel environment (over the Web)

• DataFlow templates/requests are easily updated and automatically disseminated back to foreign controllers, without affecting previously collected data

• Standardization of tax adjustment codes between OIT and OTP and entity names/numbers across OWM/OTP/OIT allows for a more seamless integration between DataFlow and tax source systems and maintains consistency

• Data providers must select from a list of tax adjustments that have been prepopulated by U.S. tax team; helps standardize information from country to country

BRUKER CORP: FUTURE STATE BENEFITS

Qualitative Benefits of Bruker’s Future State with DataFlow:2. Administrative

• Seamless rollover of tax data and balances from prior periods to current period

• Automated assignment/tracking of DataFlow requests with full version control and history

• Centralized data collection, storage, and management via DataFlow repository

• Flexibility to make changes to administrative lists (e.g., permanent and temporary tax adjustments code listings)

• Once data is in DataFlow repository, it can be easily consolidated/extracted for reports/analysis, reviewed, and scrubbed

BRUKER CORP: FUTURE STATE BENEFITS (continued)

Qualitative Benefits of Bruker’s Future State with DataFlow:3. Internal Controls

• DataFlow templates undergo automated diagnostic checks to evaluate the spreadsheets internal design for errors/validity (formulas, links, etc.) and to help ensure data outputs are properly mapped to desired targets (i.e., OTP); design errors must be corrected before final conversion to a DataFlow template in OWM

• Data providers cannot make changes to formulas or structure of the DataFlow Request; they can only enter information in designated input cells (color coded)

• Integration of collected data via DataFlow pushed directly into OTP and OIT—eliminates manual data entry/rekeying and potential for errors - Provides an automated flow of data between tax packages and tax source systems all

in the one centralized place, for “one source” of the truth


Qualitative Benefits of Bruker’s Future State with DataFlow:3. Internal Controls (continued)

• Data providers cannot make changes after they have completed DataFlow request (becomes read only); U.S. tax team then reviews entered data and can easily send back the DataFlow Request to Data Providers for additional input/changes, etc.

• Data providers are required to enter explanations for certain “Other” tax adjustments, etc; built in balance checks and verifications in DataFlow Request

• Creates an “Audit Ready” tax dept. with electronic evidence of tax data collection/management/review and reported tax information in OTP and OIT that ties directly back to electronic tax data packages and processes in OWM/DataFlow


Qualitative Benefits of Bruker’s Future State with DataFlow:4. Data Providers/Foreign Controllers

• Less data entry required now from data providers—removed information that was unnecessary and/or could be rolled over from prior period such that this information is not required to be entered multiple times

• In addition, information that could be integrated into DataFlow (from sources like GL system/s, etc) removed burden off Data Providers manually entering this information

• U.S. tax dept. receives automated e-mails when DataFlow requests are assigned/completed to/by Data Providers, with automated due date reminders for completion

• Communication/collaboration with Data Providers is now electronic and centralized within the DataFlow Request, with added ability to exchange documents


Quantitative Benefits of Bruker’s Future State with DataFlow:

• Increased efficiency/productivity (faster interim/year-end provision and compliance cycles/close) with saved employee time and costs

• Reallocation/redistribution of resources to more value-added activities (to improve employee retention and skills growth)

• More time spent on review and analysis of data (less time spent on data collection)• Enhanced interim provision process has saved two days for an equivalent saving of 80 FTE

hours• Enhanced worldwide year-end provision process has saved four days for an equivalent

saving of 224 FTE hours. • Enhanced foreign compliance process has saved eight days tax for an equivalent saving of

192 FTE hours. • Most importantly, the savings from processing time have been repurposed to review time,

allowing the tax department to provide greater insights to management and external auditors.


Summary of overall benefits:

• With KPMG’s guidance and leadership, Bruker’s transformed tax environment for their interim/year-end provision and foreign compliance data collection/management has resulted in faster cycle times, enhanced efficiency and productivity, stronger internal controls, improved accuracy, and reduced risk of manual processes/error.

• The new leading practice tax function is centralized, standardized, automated, and integrated across the tax/data life cycle, using customized technology and related process redesign/improvement.

• With a scalable transformation methodology in place, next steps include further improvement to Bruker’s year-end tax provision and U.S. compliance processes, along with expansion to other tax and nontax types/functions.


Not permissible for KPMG audit clients and their affiliates.

THANK YOUSome or all of the services described herein may not be permissible for KPMG audit clients and their affiliates.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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