SAP: Your Business’ Path to Clean Core

Sovos
January 6, 2025

This blog was last updated on January 10, 2025

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.

In part two, we addressed 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.

For our third installment in this series, I’d like to spend time talking about your business’ path to Clean Core and what that means for your tax and compliance programs and initiatives.

As outlined in our first two posts, aligning with Clean Core holds a number of significant advantages for companies including making them more nimble, efficient and cost efficient. It is a move I would encourage any business using SAP to consider sooner than later.

Readying for the Project

With any large-scale update, migration or platform change, getting your business ready for Clean Core is a process that takes advanced planning, a sound strategy and buy in from the highest levels of the organization to execute effectively.

In assessing your business’ readiness to adapt to Clean Core, it is important to understand both the short and long-term goals of the project and outline the specific actions that you will need to take to get there. My recommendation is to determine what your ultimate goal is, and then work backwards from there. This will help to ensure that no important steps are missed in the planning process.

With a project of this size and scope, it’s also critical to detail which parts of the project will be assigned to which departments and determine a method of oversight to ensure that all areas of the business are making progress and on track to meet associated deadlines.

When you are dealing with large, multi-faceted organizations, it is not uncommon for departments to move at different paces. This is where having executive buy-in becomes critical as it ensures that the project remains an organizational priority.

Outlining your Change Management Strategy

No two organizations are exactly the same in terms of their makeup and infrastructure. Therefore, you will need to conduct a self-assessment of where you are before you can determine which transformation trajectory makes the most sense for your business.

It is important to realize that an ERP transformation journey is a commitment that will require change. Assessing your organization’s appetite for change and the pace at which these changes can be implemented are critical success factors.

For organizations with the ability and desire to move faster, they will accelerate their time to modernization and be in a position to reap the benefits more quickly. However, I will caution that moving faster than your organization can realistically support can have serious consequences as well, which makes your initial assessment such an important part of your transformation journey.

The Impact on Tax and Compliance

Embracing the tenets of Clean Core can ensure that critical Tax and Compliance functions and decisions are no longer driven by complex and often difficult to maintain customizations within core ERP functions. Moving to an infrastructure with reduced complexity will enable your organization to more easily integrate specific tax solutions that are automated and maintained by third parties. This is an issue of great importance as governments and tax authorities around the world embark on their own technology journey and implement systems that are far more complex than previous generations.

Many countries have moved towards the complete digitization of tax compliance which requires real-time transactional data and complete transparency into your end-to-end transaction processes. Meeting these requirements can be the determining factor in your ability to conduct business within certain regions. Aligning with Clean Core is an important step in enabling your technology to react to changing regulatory conditions faster and more efficiently.

Concluding Thoughts

This type of transformation project should always be supported by and aligned with a solid business strategy. Having a set criterion of what you are trying to achieve and how you will measure effectiveness should be established up front. And global tax compliance should be a foundational element of any transformation event.

Tax and compliance are a great place to start your journey to begin unlocking the full power of aligning Clean Core principles with best-in-class tax solutions.

For more guidance on your journey, please download our free ERP Transformation eBook.

Sign up for Email Updates

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

Author

Sovos

Sovos is a global provider of tax, compliance and trust solutions and services that enable businesses to navigate an increasingly regulated world with true confidence. Purpose-built for always-on compliance capabilities, our scalable IT-driven solutions meet the demands of an evolving and complex global regulatory landscape. Sovos’ cloud-based software platform provides an unparalleled level of integration with business applications and government compliance processes. More than 100,000 customers in 100+ countries – including half the Fortune 500 – trust Sovos for their compliance needs. Sovos annually processes more than three billion transactions across 19,000 global tax jurisdictions. Bolstered by a robust partner program more than 400 strong, Sovos brings to bear an unrivaled global network for companies across industries and geographies. Founded in 1979, Sovos has operations across the Americas and Europe, and is owned by Hg and TA Associates.
Share this post

Climate Related Events Insurance Premium IPT
EMEA IPT
July 18, 2024
The Impact of Climate-Related Events on Insurance Premium Tax (IPT)

Climate related events impact all industries; the insurance industry is no exception. Here’s how it’s affecting Insurance Premium Tax.

North America VAT & Fiscal Reporting
April 3, 2025
The Rise of Pre-filled Returns in Greece

This blog was last updated on April 3, 2025 As governments worldwide continue to shift to Continuous Transaction Controls (CTC) systems, such as e-invoicing and real-time e-reporting, another trend organically unfolds as part of this move towards tax digitisation: pre-filled returns. With access to real-time transactional level data – and other types of data, such […]