Making the Australian tax system easier, cheaper and more personalized

SAS® assists with 'citizen relationship management'

Data mining technology will grow significantly over the next few years, predicts Kurt Schlegel, a senior research analyst at Meta Group, according to a recent report on SearchCRM.com. Data mining tools analyze large sets of data to provide insight and optimize business processes. When it comes to market leadership in data mining SAS is clearly No. 1, Schlegal says.

The Australian Taxation Office (ATO) uses SAS data mining software to make the administration of Australian tax law "easier, cheaper and more personalized." Specifically, the ATO is using SAS to understand customer needs, meet customers' expectations and to improve overall compliance.

Increased emphasis on client relationships
The ATO is the federal government's main revenue collection agency. In 2001-02, its collections totaled more than AUS$165 billion (US$128.5 billion), about 93 percent of all tax revenues collected in Australia. The ATO administers tax laws, with the aim of managing and shaping the revenue systems that sustain social and economic policy and fund services for Australians – an important task the agency seeks to do better.

The ATO faces two major challenges
The first is to improve the efficiency with which tax laws are applied and administered. The ATO wants to do business with clients electronically, enabling people to submit their statements and returns via the Internet and other channels. The ATO also wants to process taxpayers' statements and returns in a timely and responsive manner, ensuring that they receive their refunds or pay their debts on time.

The second major challenge is to be seen as a more client-friendly organization that helps taxpayers understand their rights and entitlements and see that they meet their tax obligations. The ATO is placing increased emphasis on client relationships and providing an "easier, cheaper and more personalized" service to clients. Client intelligence is vital to addressing these challenges, and this is one reason why the ATO is using SAS software to better understand clients and their characteristics.

In particular, the ATO is providing capabilities and establishing procedures to give employees who interact with the public the intelligence they need to respond to clients in a friendly, helpful and timely manner. To this end, the ATO has set up call centers that enable any person or organization to contact the agency to obtain the assistance they require. Client intelligence enables call center operators to understand better the people they are interacting with and explain how the tax system applies to their particular circumstances.

Data mining improves personalization As is the case in most developed countries, the Australian taxation system is very detailed and complex because of 'black-letter law,' since the way it is applied is not always simple and straightforward. It is therefore important that ATO employees make the best use of technology and information to ease the burden on taxpayers in meeting their obligations.

Clients regularly seek tax rulings on whether certain obligations apply in their cases, which deductions they can make from their taxes and similar questions. SAS Text Miner mines tax ruling requests. It can be used to categorize requests for tax rulings based on their content so that the ATO obtains a better understanding of what people want from the agency, to determine whether a precedent exists and to establish the information needed to answer specific requests.

In particular, the ATO uses SAS software to profile clients in order to customize responses to each client's unique circumstances. In the era of e-government, it is now possible to tailor responses rather than use a "one-size-fits-all" approach with clients. The ATO has found that data collected from clients and other sources enables a more personalized and responsive approach.

SAS offers scalability, ease of use Warwick Graco, a manager from the Analytics Project at the ATO, says SAS software offers several important benefits in this respect. One is its scalability: it can handle large data sets. Those who do analytics in the ATO generally deal with entire populations rather than samples, so industrial strength in the software is essential. Another advantage with SAS is the breadth of its suite of analytic tools. These tools are all tried and tested, which is important when it comes to choosing the most appropriate tool for a particular job.

SAS' ease of use is a third important asset for the ATO. "Obviously, you need some knowledge of programming, but SAS is easy to use because it involves many point, click, drag and run operations. For example, SAS software has a library of ready-to-use algorithms, so you don't have to spend a lot of time writing the code; you just call up the algorithm you need to do the job," Graco stated. "When you are in the business I am, under pressure to produce results within deadlines, the quicker you can get things done the better." He added that the visual programming features of SAS®9 boosts productivity even further.

Finally, Graco said, the widespread use and market penetration of SAS in Australia and around the world are significant benefits. "In a large organization it is important to have standards, and SAS has become a standard for data processing and analytics. There are a lot of people out there with SAS skills and experience, so it does not leave a gaping hole if you lose a key member of the staff. The extensive availability of people with SAS skills and experience gives us the confidence that we can replace staff that leave and can plan ahead with confidence while keeping costs under control."

Having worked as an organizational psychologist earlier in his career, Graco says he thinks the SAS organizational culture has been a benefit in making the company successful and establishing SAS software as an industry standard. "If you have a happy organization, then you are going to have a good product. This philosophy has paid off handsomely at SAS."

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