The Challenge

The landscape for domain-specific transfer pricing software remains less mature compared to other fields. The number of available solutions and their level of sophistication are still evolving. Additionally, the market predominantly offers standardized software that provides little flexibility to adapt workflows, data structures, and logic architecture to specific needs. While fully custom-built solutions are developed on a contract basis, the high costs often outweigh the benefits for most tax teams. Several other factors limit buyers of transfer pricing software from achieving sufficient access, agency, and ownership over the technology. In the following section, we delve deeper into these challenges that hinder knowledge workers from fully leveraging the opportunity to provide expertise and utilize flexible software.

Barriers to access

Price

The challenge lies in shifting the market perception that niche domain software must be expensive. Due to limited competition, prices for transfer pricing software are often disproportionate to their value. Existing solutions are priced high because the prevailing business model targets a narrow segment of buyers (long tail) who may overestimate the software’s value or are overpromised its capabilities. This issue is exacerbated by asymmetric information between buyers and sellers, where high-level problem discovery sessions create unrealistic expectations, leading to disappointment once the software is in use.

Usability

Fragmented solutions, steep learning curves, and a lack of flexible configuration and selection options pose significant usability challenges. These limitations prevent users from fully tailoring the software to their needs or finding effective workarounds. While generative AI exists, interfaces that integrate it seamlessly into workflows are yet to be developed. As a result, consultants often juggle multiple applications, manually copying data back and forth, which compromises both efficiency and privacy control.

Support

A gap of shared understanding exists between buyers, advisors, and software vendors about how to use a particular software as intended. Even when a standard software solution fits the specific use case of a group, challenges remain in using it to produce robust outputs from a compliance perspective. Software vendors may face staffing shortages, making it difficult to provide timely and targeted support from qualified knowledge workers to guide users appropriately. Additionally, documentation is frequently outdated, incomplete, or devoid of rich, practical examples that address the unique challenges faced by multinationals.

Trust

Access to technology is heavily influenced by the trust users place in its security and privacy. Software vendors may not provide sufficient information about the product’s architecture, leaving users uncertain about its reliability. To build trust, solutions must be presented in a way that non-technical users can clearly understand their implications for security, privacy, performance, and other critical aspects.

Barriers to agency

Domain relevance

Over decades, experts have developed indispensable resources, including standardized text and data templates, analytical frameworks, decision trees, checklists, and an accumulated repository of relevant transfer pricing rules. These critical resources for knowledge work are typically managed through file managers and standard office software. Domain-specific software that fails to provide access to these resources, functionality for users to incorporate their own materials, or integrations with relevant information sources, does little to enhance the productivity or output quality of knowledge workers.

Specialized solutions must be thoughtfully designed to align with the day-to-day activities of domain experts. For new software vendors aiming to create a holistic solution that encourages knowledge workers to transition away from traditional office tools, the primary challenge is replicating the versatility and flexibility that these existing tools offer.

Knowledge work freedom

No report or analysis in transfer pricing is ever the same. Client data is provided in varying formats, structures, and levels of complexity. Knowledge workers generate transfer pricing outputs through diverse workflows, varying logic, and distinct data and content structures, all tailored to fit their specific practices and the use case. The challenges faced when using domain-specific software range from simple tasks, such as adding a column for another currency, to creating entirely new solutions to address evolving tax compliance requirements. Rigid software solutions often lack the flexibility needed to accommodate these customizations.

Barriers to ownership

Protection of knowledge

In niche fields like transfer pricing, knowledge is built over a long period of time through repeated engagements, each shaped by unique circumstances. This accumulated expertise becomes a valuable asset that requires protection to some extent. For instance, a model developed in spreadsheet software, refined over years, tested through multiple audits, and customized to capture a client’s specific situation should remain under the creator’s control. Organizations must have the ability to decide which knowledge to share, with whom, and under what conditions. Moreover, they should retain the right to take their work with them if they transition away from a particular software solution.

A misaligned sense of ownership discourages teams from fully utilizing software, contributing to its improvement, or fostering a collaborative environment where knowledge workers are incentivized to engage meaningfully with their domain. For professional services firms, any software-dependent business model must incorporate clear elements of ownership to align with their strategic goals and economic viability.

Usage terms

Ownership also extends to control over how the product is used—such as which types of engagements it supports, which tasks it completes, and which users are invited. For instance, Microsoft does not impose restrictions on how Excel is used or the number of users invited to collaborate. However, specialized B2B software vendors often enforce specific usage terms that can restrict consultancies from providing certain services to their clients. These limitations are further compounded when usage terms are defined in ways that ultimately influence the commercial terms.

Commercial terms

Commercial agreements between software vendors and consultancies frequently impose restrictions that hinder the profession services firm’s ability to market the software or its outputs to their clients. Such partnerships often fail to align economically with the consultancy’s interests. Software vendors, operating under value-pricing strategies, may set terms that make it difficult to attract collaboration with professional services firms. This lack of flexibility in commercial terms discourages buyers from adopting software solutions that could otherwise enhance their own work or benefit their clients.

---