What is it, what is it for and why is it important.
The huge quantity of information globally produced during the last years, and an increasing volume of posts, emails, purchases through the internet and others online transactions, having place minute by minute, has generated a disruptive change.
What has been modified is the conceptual framework for information management and data analysis.
In the same way as the rest of the information users from different disciplines, the current challenge for tax administrations has come to be finding relevant and meaningful information in the sea of available data.
However, technological advancement has done its part, bringing us lower costs and increased possibilities for data storage and information processing.
Nowadays advanced statistical tools and automatic learning techniques – just like other methods for the exploration and the discovery of knowledge in the data, like data mining- generates that our problems related to the data are different from the ones of yesterday.
A more accessible software and hardware are available, making possible to store large volumes of data and to process it in a more effective way, avoiding many of the delays and network congestion of the past.
There was also a transition from a static way of inspecting the information to one based on a continuous flow, which allows operating with updated data, almost in real time. This availability is not required in all types of data analysis, but it is a possibility very useful in some cases.
Advanced analytics is a collection of tools and techniques to manage, clean and cluster data and to discover patterns between them, in order to find specific results, make predictions, establish unknown associations between parts and generate recommendations based on risks and probabilities.
They are computational developments that apply statistical and mathematical models and can be used for a wide range of applications from health or business to anti-fraud initiatives.
Tax administrations are using this kind of tools to optimise custom service, being more effective and efficient and to discover tax fraud operations.
However, this phenomenon requires structural and cultural changes that the new technologies demand to effectively articulate those advances with the organisation’s needs and possibilities in the tax administrations.
In order to effectively manage advanced analytics projects in each administration, it is necessary to manage uncertainty and manage change, to design new models of governance and project management, and to implement a host of structural modifications.
These new approaches are essential in a global economy and are strategic in developing countries because they are key to prioritise actions in order to choose the effective intervention with the existing limited human resources.
The incorporation of analytics and statistics tools to predict and infer facts, from information about taxpayers and operations, both influence how to organise the work and arrive at the necessary results.
The meeting between these technologies and the adaptability of the human thought to the tools they impose will allow improving customer service and to give qualitative and quantitative leaps in the processes.
The importance of these new tools is to make it possible to implement a scheme of greater equity for people, through providing greater transparency on compliance control and also, through an optimisation of the return that those tax contributions will generate to improve the quality of life of our citizens.