The power of collaboration for SAP S/4HANA upgrades – building bridges between IT and tax professionals

An over-the-shoulder view of a senior IT manager, dressed in yellow. They are working at their laptop, plugged into a monitor behind it, and looking at raw data for tax insights.

Navigating SAP S/4HANA upgrade: a cross-functional approach between IT and tax professionals

In today's increasingly digital world, businesses are constantly exploring ways to evolve and streamline their operations – underscoring the importance of creating synergies between the Information Technology (IT) and tax departments. One way businesses achieve this is by upgrading to a robust Enterprise Resource Planning (ERP) software, like SAP S/4HANA. This type of upgrade can be complex (requiring intricate knowledge of both technological systems and fiscal regulations) and makes a cross-functional collaboration essential to the upgrade’s success.

The role of IT and tax professionals in the upgrade

When deciding to upgrade to SAP S/4HANA, it’s important to understand that it’s not just an IT project –but a business transformation exercise which impacts other teams across an organisation (most notably the tax team) and why collaboration is so important at every step of the way.

For example, IT professionals bring technical knowledge to the project, handling tasks such as data migration, system integrations and implementing enhanced functionalities. On the other hand, tax professionals have the critical role of evaluating and assessing the vast number of tax workflows and capabilities within the new platform and ensuring they align with the organisation's tax compliance requirements. The result is a robust system upgrade that meets both technical and tax-related requirements and creates a seamless transition to the new technology, along with improved business performance.

Realising the benefits of a coordinated IT & tax taskforce for SAP S/4HANA migration

There are significant benefits to integrating the IT and tax teams during an SAP S/4HANA upgrade. For example, it can help enhance compliance capabilities – with tax professionals providing insights into complex tax laws and regulations and the IT team helping ensure that the upgrade meets the necessary technical requirements.

Navigating pushback during the upgrade process

An upgrade is a major initiative and change management is another important component of the project. Tips for success include:

  • Communicate clearly and often: Make sure to explain the benefits of the SAP S/4HANA upgrade in terms that are relevant to team member’s interests and role. It’s also important to highlight the long-term efficiency gains, cost savings and improved decision-making capabilities.
  • Demonstrate value: Prepare case studies or statistics demonstrating the positive impact SAP S/4HANA upgrades have had at similar businesses.
  • Involve key stakeholders: Engage key stakeholders from the beginning. Their buy- in can help drive support from other team members.
  • Provide training: Offering training sessions to familiarise the team with SAP S/4HANA and its benefits can alleviate the fear of change and help smooth the transition to the new technology.

Why a third-party tax engine should be integrated into a S/4HANA upgrade

Bringing in a third-party tax engine during the S/4HANA upgrade process is a strategic move that helps further enhance the efficiency and compliance of the system. These tax engines are designed with advanced features to handle complex tax calculations and rules, making them a valuable addition to the collaborative efforts of both the IT and tax teams.

In terms of compliance, third-party tax engines are regularly updated to reflect changes in tax laws and regulations across different geographies. This means that the IT infrastructure will always be aligned with the current tax rules, minimising the risk of non- compliance and potential penalties.

Efficiency-wise, these engines automate intricate tax processes, reducing the time and effort needed to compute taxes accurately. This allows the tax team to focus on more strategic tasks, rather than getting embroiled in routine tax calculations.

Lastly, a third-party tax engine increases the financial accuracy of the system. By providing precise tax calculation and validation features, it ensures that financial reports reflect accurate tax amounts. This is crucial for maintaining the financial integrity of the organisation.

For more information, watch my recent webinar: The Benefits of IT and Tax Department Collaboration, Cooperation, and Partnership.

Blog Author

Kiran Seshagiri

Kiran Seshagiri

Functional Practice Leader

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Kiran Seshagiri serves as the Functional Practice Leader at Vertex's SAP Consulting Practice. He is well experienced in all stages of SAP and Vertex O Series software implementations. Kiran has over 20 years of transaction tax expertise and systems knowledge. To provide Vertex solutions, he combines his skills in process analysis and design, system configuration, team leadership and tax and telecom knowledge.