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Case studies

Deciding upon a global service provider should be straightforward. You need a firm with the greatest scale and global network (reach), the ability rapidly to manage change through an effective transition process (readiness), and the firm with the longest track record of working in the global compliance market (reliability).

"PwC has significantly overachieved in areas of flexibility, relationship management, responsiveness and understanding the business."

– Chief revenue officer, global telecoms company

Transition approach gives PwC the edge over competitors

"‘I was impressed with PwC’s approach to transition. The transition specialist was clearly very experienced and ensured that the process, which could so easily have been painful and time consuming was efficient and effective."

The issue

Our client, a global transportation and logistics company, previously used their auditors to carry out their worldwide corporate tax compliance. However, post Sarbanes-Oxley, the company decided to seek an alternative service provider and put the work out to tender. The remaining three of the big four firms were invited to propose and after careful consideration the company awarded the work to PwC.

One of the main reasons for choosing PwC was our approach to transitioning the corporate tax compliance work from the existing provider to PwC.

Our approach

The transition began with planning meetings, held in each of the three regions: the Americas; Europe, Middle East and Africa (EMEA) and Asia Pacific. The meetings were organised and run by a team of PwC transition specialists comprising both global and regional members. Each meeting provided a forum for the client’s international tax director and regional tax manager to meet and get to know the key PwC team members. The PwC team then worked with the client to prepare a transition action plan specifically tailored to their needs in each region. For the largest region, this meant formulating a plan to transition 19 countries in two months.

We set up a global compliance solutions database for the client, as a central repository for compliance information and also to provide status information and reports. With input from the client, this was tailored to their specific requirements not just in terms of the actual content and report formats but also filing protocols which were agreed and communicated to the local PwC teams. All the initial data regarding the countries, companies and people involved was collected and input to the database by PwC, including compliance timetables for each company which had been agreed between the client teams and PwC.

Once the practicalities had been addressed, formal service agreements were drawn up for each country with PwC coordinating this exercise centrally for the region to ensure that the agreements were consistent with the global template and reflected the discussions held and decisions made.

PwC also provided a training seminar for the client and her team supported by a comprehensive user manual and a quick reference guide.

The outcome

One of the client’s key expectations was that PwC would quickly understand the business and the terminology used throughout the company. In order to address this, we arranged a briefing session for partners and managers from the local PwC operational teams at which the client presented an overview of the company. This approach ensured that the local meetings and conference calls that followed proceeded quickly and efficiently without the need to repeat these details each time.

The client was particularly impressed with the skills and experience of our transition specialists and appreciated the fact that they were kept fully informed of progress and issues.

In the largest region, the regional tax manager for the client commented that this was the first time she felt that she could see the way ahead with regard to managing deadlines and felt confident that there would be no last minute panics.

PwC provides a better coordinated service

"I always get what I need from the monthly calls with our global compliance relationship manager. PwC’s is a properly coordinated service and the communication with the PwC offices outside the US is good."

The issue

Our client is a large, global software company headquartered in the US. PwC had no historical relationship with the company but from time to time had presented them with tax planning ideas and projects. One such idea that they wanted to explore further was outsourcing their corporate tax compliance. PwC was asked to present a proposal alongside their existing auditors (another Big Four firm).

In the event, the company found it impossible to choose between the two firms and decided to award a one year contract to each firm for approximately half of the work and see how they performed in practice. Their existing auditors were awarded the corporate tax compliance work in the EMEA region. PwC was awarded the corporate tax compliance work in the Latin American and Asia Pacific regions.

Our approach

PwC demonstrated its commitment to the client straight away through a comprehensive transition process which included flying one of our transition specialists from the UK over to Singapore to run a conference for the relevant regional PwC and client people, to communicate the approach and allow them to meet face-to-face. After the initial transition period, PwC ran the contract well, providing strong coordination through a compliance relationship manager in each region and good use of our GCS database technology. Feedback from the client was very positive, particularly in respect of our Asia Pacific compliance relationship manager with whom they were very impressed.

Towards the end of the initial one year contract period, the international compliance manager in the US visited the UK and agreed to meet with us to discuss how PwC might be able to work with them in the future on corporate tax and other aspects of compliance. The client’s EMEA tax director also attended this meeting and fed back his experience of dealing with the other Big Four firm in EMEA. He explained that he felt the coordination provided by the other firm could be improved as the only way he could get the information he required was to go directly to the individual country contacts.

The outcome

Following on from this meeting, PwC was awarded the full global contract for corporate tax compliance. We are now well in to the operational phase of the new five year contract for global compliance and the client has admitted to being very satisfied with the service PwC is providing.

PwC partners with clients to find the best compliance model to suit them

"I would like to compliment you and your team on a professional, efficient and quality re- proposal that has lead to the awarding of the contract. I particularly appreciated the way that the team worked to offer the best delivery model to suit [our] needs."

The issue

In 2001, our client, a global telecommunications company, created a new division to provide specialist services to wholesale customers. This involved setting up a number of local subsidiaries in each major European country. However, these subsidiaries needed very little in the way of supporting administrative infrastructure and the company decided that outsourcing the accounting, VAT and corporate income tax compliance to a third party specialist provider would be the most efficient way to ensure that the local compliance obligations were met. In a competitive proposal with another big four firm the three year contract was awarded to PwC.

Our approach

PwC put in place local in-country teams to provide the specialist local accounting and tax knowledge that the client needed, together with an overall compliance relationship manager (CRM) to coordinate the service and provide the client with a single point of contact.

Our compliance service was also linked in to PwC’s network of specialist telecom tax advisers who were available to provide the client with valuable advisory assistance, identifying planning opportunities and dealing with technical queries arising from tax authority audits.

During the three year life of the contract, PwC quickly built a strong relationship with the client and achieved an efficient, smooth running service. We worked with the client to ensure that we continually adapted and improved our service to accommodate the changing needs of the business.

In close consultation with the client, we identified a number of ways in which we could add further value through our compliance services. These included refining the scope of services at a more detailed level, providing greater transparency and flexibility in our fees, and moving the coordination of the accounting work geographically closer to the chief revenue officer (our key contact with the client). We also worked with the client’s finance function to introduce a new automated operating model for VAT compliance which allowed us to significantly reduce our fees for this service.

The outcome

After the initial contract period, the client’s internal policies required the contract to be put out to tender again. PwC was asked to re-propose alongside another big four firm.

This client has a strict approval procedure for procurement and our proposal was assessed not only by the chief revenue officer, but also by his senior and ultimately by the senior finance vice president for enterprise solutions and wholesale markets. The decision was unanimous to retain PwC to look after the group’s compliance. The client was convinced that our service, which had been co-developed with their own team, truly addressed their needs.

The client’s chief revenue officer, stated that the effectiveness of the coordination activity exceeded his expectations. He valued the flexibility and responsiveness of the CRM and his commitment to achieving the company’s goals for compliance.

Contacts

Buddy Tinley: Global compliance services leader; Tel: +1 (678) 419 8838
Andy Morris: GCS global client solutions leader; Tel: +44 (121) 232 2166

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