SAP: Keep the Core Clean for Tax and Compliance Part II

Scott Clevenger
September 18, 2024

This blog was last updated on September 19, 2024

In the first blog in our series, we introduced SAP Clean Core concept and how much is being made about its impact on business, specifically the ability to customize an ERP to meet operational needs.

For part two, I’d like to address how businesses can use the SAP Clean Core principles to create a system that better supports their business objectives and positively impacts their tax and compliance management.

Why Clean Core is Becoming a Business Priority

In an article in Forbes last year entitled, SAP: Why Modern Software Needs A ‘Clean Core,’ the author makes the argument, correctly so in my opinion, that the old way of adding functionality by customizing the core has often become overly complex, cumbersome and costly. He explains how a new model was developed that decouples two components: one focused on predictability and the other on exploration. This evolution model is known as ‘bimodal IT.’

Now, bimodal IT is not a new term. According to TechTarget it was coined by Gartner back in 2014 and was the subject of a Gartner report in April of 2015 entitled, “How to Achieve Enterprise Agility with a Bimodal Capability,” by analysts Simon Mingay and Mary Mesaglio.

So, why the history lesson on the subject matter? I think it’s important to establish the fact that over-customization of technology platforms is not a new concern. It has been around for a while, but what has changed is the environment surrounding it.

Today, digital economies are moving at a pace where traditional methods and countermeasures are no longer effective. Today’s environments demand more structure, standardization and flexibility so that they can react fast when called upon.

Why Agility is Essential

Over the last decade, we have seen an explosion across core areas of the technology sector that makes agility critical. Whether it is preparing for cyberattacks, or the ability to quickly analyze data to take advantage of business opportunities, agility is an essential tool in your arsenal and old methods simply aren’t cutting it.

Today’s digital economies are demanding the rapid adoption of new technologies. A crucial step in keeping up with these changes is to adopt agile business-critical connected technologies that aligns with the principles of SAP Clean Core.

Adopting a global compliance solution that aligns with Clean Core principles will become critical to ensure you can keep up with the pace of digitization as it continues to evolve.

Clean Core’s Impact on Tax and Compliance

There is perhaps no other business segment that has felt the impact of technology on a global scale more than the area of tax and compliance. Heavy investment by government tax authorities over the past decade has completely changed the process of collecting and remitting tax obligations.

In an effort to close or eliminate tax gaps, gone or soon to be gone are the days of collecting and analyzing tax data and remitting after the fact. Today, it’s all about real-time analysis across the complete spectrum of the transaction. This requires the use of automated tax platforms that can quickly adapt to changing regulatory environments, ensuring compliance across every transaction.

Through applying the principals of Clean Core businesses can now attach dedicated and highly functional compliance platforms into their technology stacks without the need to customize their core SAP environment. This eliminates the need for long testing cycles, customization and many of the manual process updates that would otherwise be required.

Coming Next

Stay tuned for the next part in this series, where we will dive deeper into how Clean Core impacts specific tax processes. Upcoming segments will cover:

Part III: Your business’ path to Clean Core

Part IV: Clean Core benefits and business performance

Part V: Eliminating Tax’ dependency on IT


erp-ebook-download

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Scott Clevenger

As VP, Global Sales Engineering at Sovos, Scott leads a world-class global team of solution engineers, solution architects and subject matter experts in helping spread the word about the power of platform over point solutions. He has more than 30 years of experience in ERP deployment and indirect tax technology, a deep knowledge of simplifying global tax requirements and driving value across Sovos customers.
Share this post

future of tax and compliance
North America
June 6, 2024
Observations and Predictions: The Future of Tax and Compliance

This blog was last updated on June 6, 2024 When I became the CEO of Sovos one year ago, I knew that I was stepping into an innovative company in an industry primed for a seismic transformation. However, even with this knowledge in place, I must admit that the speed and scope of change over […]

moneygram litigation settlement
North America Unclaimed Property
October 10, 2024
The Impact of the MoneyGram Litigation Settlement on Unclaimed Property Law

This blog was last updated on October 10, 2024 By Freda Pepper, General Counsel, Unclaimed Property The Supreme Court of the United States rarely addresses unclaimed property law, which made its ruling against Delaware in the 2023 MoneyGram litigation particularly noteworthy. The case focused on the escheatment of MoneyGram checks and similar written instruments. Following […]

motor insurance taxation in Italy
IPT North America VAT & Fiscal Reporting
September 26, 2024
Taxation of Motor Insurance Policies: Italy

This blog was last updated on September 26, 2024 In Italy, the insurance premium tax (IPT) code (which is being revised as of the date of this blog’s publication) and various other laws and regulations include provisions for taxes/contributions on motor hull and motor liability insurance policies. This article covers all you need to know […]

unclaimed property compliance
North America Unclaimed Property
September 25, 2024
The SMB’s Guide to Unclaimed Property Compliance

This blog was last updated on October 10, 2024 Unclaimed property compliance is often overlooked by small businesses, with many mistakenly thinking it only applies to large corporations. But this misconception can lead to serious financial and legal trouble. All businesses, no matter their size, must follow the same state regulations when it comes to […]

Minnesota Retail Delivery Fee
North America Sales & Use Tax
September 23, 2024
Understanding the Minnesota Retail Delivery Fee

This blog was last updated on September 24, 2024 If you are fulfilling a Minnesota Retail Delivery Fee, you should be double checking that you are considering all possible jurisdictionally-imposed fees due on the transaction. Depending on where you are delivering, you may need to collect a fee just for making the retail delivery itself! […]

What are Continuous Transaction Controls (CTCs)?
E-Invoicing Compliance North America VAT & Fiscal Reporting
September 20, 2024
Continuous Transaction Controls (CTC): The Future of Compliance

This blog was last updated on September 20, 2024 One key development shaping the future of tax compliance is the rise of Continuous Transaction Controls (CTCs). CTCs represent a shift in how governments monitor and enforce tax compliance, requiring businesses to submit transaction data to tax authority systems on an ongoing basis.  The models differ […]