Throughout the US, governments are tackling a tough balancing act. On the one hand, they have to secure revenue to fund schools, keep the streets and highways from falling into disrepair, and keep the hospitals running. On the other hand, they are doing so under mounting strain. Outdated systems, increasing caseloads, and citizens who expect the efficiency of modern apps from institutions still tied to decades-old workflows. The stakes are high. A study notes that organizations lose an average of $5.87 million in revenue from a single non-compliance event. For state agencies charged with safeguarding billions in tax revenue, the risks are amplified.
Tax collection, by its very nature, is complicated. It combines enforcement with service, policy with practice. For years, the process has been marked by inefficiency. Auditors were overwhelmed with piles of paperwork, the routing of cases was done manually, and taxpayers got notices that sometimes conflicted with each other. A small delay or mistake when multiplied by millions of taxpayers can have a considerable impact on the system.
California at the Crossroads
Nowhere, perhaps, is this tension termed more sharply than in California, where personal and corporate income taxes are administered by the Franchise Tax Board (FTB). The Division of Audit and Collections is supposed to ensure that revenues are flowing in; yet, its processes have been stretched to breaking point. Legacy systems and manual workflows were no longer up for the challenge of volume and complexity. Something had to be delivered.
The state turned to the Pega Platform, a rules-driven system for case management and intelligent automation. It promised not only efficiency but also a way to apply tax laws consistently and transparently. Yet software alone cannot bring about such change. The transformation required people who could translate regulatory requirements into systems that worked in practice. One of them was Chennaiah Madduri, serving as Lead System Architect.
Building Systems for People
Chennaiah's role has been less about flashy innovation and more about painstaking design. Audit Management, for instance, has shifted from being largely manual to automated. Case intake, assignment, and tracking are now handled by workflows that ensure consistency. Auditors, who once had to navigate multiple systems to piece together information, can now work within a unified view.
In Collections, intelligent case routing directs files based on risk and payment history. Customer communications that had to be drafted and mailed by staff previously are now automated while keeping within regulatory bounds. Managers can now watch case evolution in real time. Audit trails ensure accountability.
"Every decision we made was about scale and reliability," Chennaiah says. "The system had to handle millions of cases without slowing down, but also be simple enough for staff to use effectively. Balancing those two needs was the real challenge."
Early Signs of Change
The effects of these changes are already emerging. Backlogs have begun to ease as routine tasks are automated. Auditors report fewer errors and more clarity in their assignments. Taxpayers receive notices that are timelier and more consistent. By cutting down on manual effort, the FTB has lowered the risk of mistakes, a gain that matters not only for operations but also for California's fiscal stability.
While this work pertains to one agency, its implications run broader. Around the world, governments face similar questions: how to modernize without losing track of equity, how to automate without degrading humanness, or how to enforce rules without immobilizing citizens. California's own experience shows that intelligent systems really can help, but only if they are designed with excellent care, splitting attention evenly between policy and practice.
Beyond Technology
There is a tendency to view modernization efforts as stories of software. But the real work often lies in the translation between abstract rules and lived practice. Professionals like Chennaiah occupy that space. They anticipate how staff will respond, where rules may clash, and how exceptions can be handled without derailing the system. It is an unglamorous role but a decisive one.
For the FTB, the outcome is not only about efficiency. It is also about trust. When taxpayers receive consistent communication, when audits are carried out transparently, and when cases are resolved in a timely manner, the trust in the institution grows. That trust is as precious as any revenue number.
The Road Ahead
The modernization is not finished. Large systems rarely change overnight; they evolve through iteration, testing, and adjustment. California's tax administration will continue to refine its processes, guided by the foundation now in place. But already, the outlines of a different kind of institution are visible, one that can adapt to volume, enforce compliance fairly, and communicate more clearly with the public.
For most Californians, the story will remain invisible. They may never hear of the Pega architecture or the professionals behind it. What they will notice is subtler: notices that arrive on time, processes that feel less opaque, a system that functions without friction. In that sense, the work of architects like Chennaiah Madduri is most successful when it goes unnoticed, shaping the experience of millions without ever appearing on the surface.
