A tax-compliant transformation Office Depot Europe B.V.

What was the problem?

After more than 20 years in operation, Office Depot Europe B.V. had accumulated so many different finance-related technologies that it was difficult to get work done efficiently. It had to pull data from multiple enterprise planning resource systems, for instance, while the disparate programs made meeting tax compliance requirements more difficult than it needed to be.

In 2016, the company was bought by private equity company Aurelius Group, which decided to transform Office Depot Europe B.V.’s finance technology. The old systems, it found, made it hard to calculate value-added taxes (VAT) and so it needed new ones to make that undertaking more reliable. “We needed to find a solution to be in control of the situation and our processes, which were all a bit scattered, needed a revamp,” says Kevin Engelen, Office Depot Europe B.V.’s director of European accounts payable.

What was the solution?

When it came to finding a software provider, the company knew it wanted to collaborate with partners that truly understood tax and Office Europe Depot B.V.’s business challenges. That led them to Oracle, which brought PwC in on the pitch. “With PwC there you immediately level the playing field,” Engelen explains. “They had the same (tax) expertise as our people and they could understand each other and talk to each other, and that builds trust.”

PwC’s approach to transformations was also key to winning the engagement. It doesn’t look at this kind of work as a technical implementation - anyone can install new software. Rather, it considers these assignments as business transformations, which involves helping clients understand their business challenges and potentially changing
the company culture to fit a new way of working, says Jelmar De Vries, a senior director at PwC Netherlands.

In this case, the implementation process was not without its challenges. The only way for a transformation to work is if both sides have a strong and trusting relationship. It also helped that PwC took an “adopt, not adapt” approach to this transformation, as it does to most of its engagements, where a client aligns its business challenges with the software as it is, versus spending time and money trying to customize the program. It took some time for Office Depot Europe B.V. to embrace that adoption, but once it did it was smooth sailing from there. “It’s something that many organizations and their people must realize,” says De Vries. “And when they do it’s awesome.”

What is the result?

The implementation, which is now complete, was done in two releases: the first, which took seven months, involved getting seven countries on Oracle Finance, which includes core finance functions, such as general ledger, accounts payables and receivables, fixed assets and more. The second release, which was the most complicated, and was for only three countries, had to do with order-to-cash – a key tax-related business process that tracks an order from the initial sale until a payment from the client gets made.

Both releases helped Office Depot Europe B.V. become tax compliant in key jurisdictions, says De Vries, while most of its processes are now harmonized. The company can more easily input data into Oracle’s finance cloud solutions – data entry is automated, too – and use that information to calculate its VAT costs. “Office Depot Europe B.V. is now tax compliant, has better insights, it can do more transactions and it’s ready for the future,” says De Vries.

For Office Depot Europe B.V., having a more modern and unified system in place has made life much easier not just for its finance team, but other business units as well. If it weren’t for the PwC collaborative approach, and the trust it built with the company’s new executives, this much-needed transformation would have been more challenging to complete. “PwC went the extra mile,” says Engelen. “They brought in different teams, from the tax person to the business consultant, and they made sure to deliver no matter
what they needed to do.”