Why Tax and IT Need to Work Together When Migrating to SAP S/4HANA

When IT drives an SAP S/4HANA migration, tax rarely gets a seat at the table early enough. That creates a problem. Native ERP systems handle VAT determination with a limited set of rules and country-specific customizations that pile up over time. When you move to S/4HANA, you can't just copy those settings over. You have to rebuild them. If tax isn't involved from the start, the risks multiply fast.

Why this moment matters for both teams

An S/4HANA migration isn't just an IT project. It's one of the best opportunities a tax department will get to modernize VAT operations. At the same time, IT teams are under real pressure: tight budgets, fixed timelines, and a mandate to keep disruption low. Those goals aren't in conflict. They're actually aligned, once both sides understand what a third-party tax engine can do.

The real cost of doing nothing

Without a dedicated tax engine, IT ends up building custom VAT solutions from scratch. These are solutions that haven't been tested, carry rework risk, and can become a showstopper for the entire project. Meanwhile, tax teams deal with coding errors, missed VAT deductions, manual processes, and growing compliance pressure from tax authorities who increasingly access transactional data in near real time. The status quo is not a safe option.

How a tax engine changes the equation

Vertex Indirect Tax O Series can evaluate more than 100 data elements per transaction, far beyond what a standard ERP considers. That accuracy reduces errors in both accounts payable and accounts receivable, supports centralization of VAT operations, and removes the burden of tracking legislative changes from your IT team. When tax law changes, Vertex handles the research, updates, and implementation, so your IT resources stay focused on core ERP delivery.

Building a joint business case

The key is timing. Bringing a tax engine into an ERP migration early (before budgets are locked) is far easier than retrofitting it later. Tax and IT need to build the case together, showing how a solution like Vertex reduces customization overhead for IT while giving the tax team the control and compliance confidence they need. A shared problem, approached as a shared solution, leads to a better outcome for the whole business.

For multinational businesses navigating global VAT compliance, an SAP S/4HANA migration is too important and too rare an opportunity to leave tax out of the conversation.