To respond to this accelerated need for digital transformation, companies should lean on available federal and state tax incentives as a way to secure much-needed funding.
A simple rewards program can tackle the most egregious offenders by offering incentives, but more comprehensive plans can be put in place to handle even smaller, everyday medical expenses. We’ve seen return on investments of over 20 times from some of the best programs. They need to be simple to use and accessible from anywhere to make a difference. Employees don’t want to handle a ton of paperwork to get their rewards and fraud is next to non-existent since the company employs them.
Even as large segments of our country’s workforce begin their transition back to the office, companies are coming to terms with the fact that in some instances, remote work may be necessary. However, 41% of employees in America said they would actually prefer a long-term hybrid model, with the flexibility to work both in person and from home, as opposed to a fully remote schedule.
When it comes down to it, face-to-face interactions with co-workers and clients will always be the gold standard, and employees are certainly looking to continue this tradition. But, with the pandemic still impacting regions across the country, organizations must institute new technologies to streamline their hybrid workflows and better serve their clients during these turbulent times.
As businesses prepare for this shift in operations, many are realizing they can no longer afford to put their digital transformation projects on the back burner while we wait to return to “normal.” New research from alliantgroup found that 29% of C-suite executives believe the U.S. is already lagging behind other countries when it comes to embracing digital transformation, and one out of five of those surveyed said the U.S. wasn’t embracing new technology as aggressively as other countries.
The time is now for businesses to address their digital limitations and seek out the technical infrastructure to rise to the occasion. From cloud-based solutions to increased cybersecurity, AI assistants and more, these innovations must be prioritized and will prove essential to streamlining both internal operations and everyday client relations.
So, how can companies still plagued by the ripple effects of a global health crisis find the resources to pursue these ambitious projects?
Roadblocks to Innovation
While the pandemic illuminated why adopting the latest enterprise technologies is so crucial, it also made it exponentially more difficult to allocate time and resources toward these large-scale projects. Our economy took a significant downturn, and businesses across all industries faced financial hardships due to partial shutdowns, diminished workforces and the general growing pains that came with completely adapting daily operations. For example, 36% of C-suite executives surveyed cited the pandemic as having accelerated the need for digital transformation, but 29% said it actually hampered their organization’s capacity to pursue related projects.
Incentives offer a path forward
To respond to this accelerated need for digital transformation, companies should lean on available federal and state tax incentives as a way to secure much-needed funding in the wake of COVID-19. Significantly, more than one out of five (21%) C-suite executives say more government support like tax credits would be key to accelerating their companies’ digital transformation efforts, and nearly a quarter (24%) are even supporting candidates lobbying for similar legislation. Although these financial resources are built into the U.S. tax code, they’re too often overlooked by businesses that already qualify and need them most.
For example, Section 41 of the U.S. Tax Code – the Research and Development Tax Credit – Is one of the largest incentives currently available to businesses pursuing innovation in the US. Originally created in the 1980s to incentive onshoring and accelerate the growth of American companies, this tax credit has saved businesses up to millions of dollars each year and enabled them to pour ample resources back into more R&D efforts.
But it’s not just scientists in lab coats or aerospace engineers that can receive financial benefits under Section 41; everyone from big box retailers and large corporations to local eateries and small businesses can be eligible for the R&D tax incentive. Specifically, organizations across virtually every industry can qualify if they design or develop products, processes, techniques, formulas, inventions, or software, or even just implement, advance, or improve upon existing products or processes.
In the context of digital transformation, pursuing cloud integration, building intelligent cybersecurity systems, or trialing new AI technologies could all qualify your company for sizeable returns. Businesses can even look back to their open tax years and retroactively claim incentives they may have been eligible for based on past R&D efforts.
Claim your share and kick-start innovation
Businesses should work in close consultation with their CPA to document R&D activities and confirm eligibility, but it’s clear the R&D tax credit can significantly help many companies secure the financial resources to actively pursue long-awaited digital transformation projects and build resilient, hybrid teams.
Tax incentives will provide necessary economic support to all industries as they slowly start to rebuild post-pandemic. Implementing new technologies will be a core part of this rebuilding process, and those businesses that hit the ground running and fully embrace digital transformation will no doubt be best positioned to lead their workforce into the future.
About the Author
Dhaval Jadav is Chief Executive Officer of alliantgroup, America’s leading provider of credits and incentives for businesses of all shapes and sizes. Jadav co-founded the firm in 2002 and; since its inception, his passion to help and serve U.S. businesses (and their CPA firms) has resulted in alliantgroup assisting thousands of businesses claim powerful cash-generating credits and incentives.