A Holistic Game Plan for Tax Transformation

Tax transformation done right

Most organizations capture less than one-third of the value they expect from digital transformation efforts. For tax teams navigating an SAP S/4HANA migration, that gap is costly. It is also avoidable. A holistic approach to tax technology transformation brings together tax, finance, and IT to close that gap and deliver lasting results.

This white paper, developed with DuCharme, McMillen & Associates (DMA), lays out a practical game plan. It covers how to recognize tax department challenges, define migration requirements, choose the right strategy, and build a business case that secures funding.

What tax departments are up against

SAPinsider research of 115 global business and technology professionals shows that e-invoicing and real-time reporting mandates are now the top challenge for tax teams, overtaking VAT/GST and sales and use tax compliance. The data also shows progress: fewer teams flagged traditional compliance as a top pain point in 2022 compared to 2021, a sign that tax automation is maturing. Emerging technologies like AI, robotic process automation (RPA), machine learning, and data analytics are accelerating that progress.

Beyond the tax engine

A successful tax automation solution is not just about the engine itself. DMA Vice President of Tax Technology Justin Barnes outlines six implementation practices that help tax groups get more from their investment: keeping master data complete and accurate, using advanced automation for use tax determination, conducting process reviews before migration, managing exemption certificates, leveraging data analytics for trend-spotting, and making post-audit improvements that can sometimes fund further enhancements.

Defining your migration requirements

Before selecting a migration strategy, project teams need a clear picture of scope: geographic regions, transaction types, and external systems. External systems are frequently overlooked, but anything flowing into SAP that touches a transaction has tax implications. Master data governance is equally critical: tax calculations are only as accurate as the data behind them.

Choosing the right migration approach

Three migration types (greenfield, brownfield, and bluefield) each suit different organizational needs. Rollout options range from a single.