For tax and finance teams across the world, the implementation of a tax engine as part of their SAP S/4HANA migration is a win-win situation. A tax engine brings enhanced regulatory compliance, increased accuracy for tax calculation, real-time reporting and its flexibility to scale. Integrating a tax engine in any SAP S/4HANA migration processes can be highly beneficial for all parties.
To ensure a successful implementation of a tax engine in the ERP migration, tax and finance professionals should be as informed as possible about specific SAP S/4HANA migration drivers, strategies and best practices.
The SAP S/4HANA Benchmark Report , based on survey respondents from 161 members of the SAPinsider community, offers a guide for tax professionals looking to improve their understanding of the best practices for ERP cloud migration. The report details numerous components of SAP S/4HANA migration including adoption status, the factors that are driving migration, deployment best practices and more.
One of the biggest takeaways from the report was that SAP’s upcoming end of mainstream maintenance date in 2027 is proving to be one of the largest drivers of migration. Christian Klein, SAP CEO, stated that SAP would not extend the end of mainstream maintenance beyond 2027. As such, it is critical that an organization’s finance and tax teams work with IT leadership to plan for the impact of a migration or a maintenance position post-2027.
The plan for financial transformation success
Although the report contains a treasure trove of insights to aid tax professionals in their migration initiatives, the key takeaway is a game plan designed to position any SAP S/4HANA initiatives for success.
Act now and be proactive, not reactive
The longer an SAP ERP system has been running for an organization, the more complex it is likely to be. The accumulation of numerous customizations to the system, a vast amount of historical data, or the system being the product of multiple upgrade cycles and patches are all factors that can complicate the matter. It also means organizations that have used the same SAP ERP system for many years will face a herculean effort to completely modernize or replace their system.
It’s likely that many organizations have tools available to determine if their system is ready for a transition, but if the inspections are not thorough enough, this can ultimately cause delays once the project has started. For tax professionals looking to either deploy any plans for a replacement, a move to SAP S/4HANA or to eliminate legacy code, the sooner the process is started, the better.
Don’t underestimate the timings for planning and deployment
The biggest challenge identified by survey respondents for moving to SAP S/4HANA was finding the necessary time to prioritize the project. Although on the surface this could suggest that a migration project could be deemed as unimportant to organizations, it in fact indicates that, as a lengthy and resource-intensive initiative, it proves difficult to dedicate enough resources from start to finish.
For example, the report details how one major transformation project involved over 250 internal team members for 12-18 months. For a certain subset of business team members, 50 percent of their time was allocated to the project.
It’s crucial that everyone involved with any migration project can dedicate enough of their time and resources, which will determine the overall success rate of the project.
Analyze what deployment options are available to you
There are numerous deployment options for SAP S/4HANA available and it’s fundamentally important that tax and finance professionals fully examine every deployment option and licensing requirements to gain full understanding of their ability. Many organizations rule out SAP S/4HANA cloud as they fail to differentiate between the public cloud, private cloud, hyperscaler and customer data center options. Collectively differentiating these terms could determine the implementation of the right software needed.
This can be the result of a lack of understanding and misconceptions about the capabilities, security and flexibility of a deployment model. If tax professionals take the time to understand the nuances and differences between the range of SAP S/4HANA deployment options, while raising any concerns to their S/4HANA project teams, they can ensure that any decisions made will be fully informed.
Determining the correct support partner
Any large-scale ERP deployment can be a massive ordeal and it’s important that organizations enlist support from partners and system integrators to allow for the migration journey to run smoothly. Typically, partners usually look after the project and change management processes; they can also assist with the optimization of workflows, help develop new code, share key knowledge and assist with data cleansing protocols.
While only a small number of organizations opt to not use partners in any move to SAP S/4HANA, for the majority that do, it is essential they enlist the support of the right partner; either one that has regularly been used for previous transformation projects or one that specializes in SAP S/4HANA. This will allow for the project to run smoothly and on schedule, optimizing time and resources for those involved.
As more organizations look to adopt their migration to SAP S/4HANA, it’s crucial they follow a clear plan of action to not only ensure that their ERP and SAP S/4HANA initiatives are deployed successfully, but that it sets a foundation for success in the years to come.
Tax teams must do their due diligence and raise any concerns to the IT teams in charge of the migration process, ensuring that any move to ERP cloud migration is completed successfully. Once you make decisions backed up with the correct knowledge, your business will continue making strides with your growth goals.
