This blog was last updated on February 21, 2024

Change is scary, but it is often also necessary. With sales tax solutions in particular, change management is often fueled by total cost of ownership (TCO), ROI and a desire for reduced manual work. But both the tax department and IT department can reap benefits through successful technology changes.

For example, more organizations are moving from an on-premises sales tax solution to one in the cloud. Making this type of switch is especially beneficial when migrating to SAP S/4HANA.

ASUG, the world’s largest SAP user group, conducted research in collaboration with Sovos to better understand the sales tax solution experiences and change management processes of customers that use SAP enterprise resource planning (ERP) systems. Specifically, the research reviewed challenges faced and top concerns in various departments when businesses change or update their sales tax solutions.

What drives change to technology systems?

The majority of respondents (72%) said that TCO was the key driver that led their organization to consider making a change to technology systems or solutions. ROI and reducing manual work were also cited by 63% and 53%, respectively. About one-third of respondents said they take a more proactive approach and evaluate changes on a regular cadence as a part of their technology road map.

The largest share of respondents (38%) consistently evaluate making changes to technology systems or solutions. When respondents stick to a schedule of evaluating change, the most popular frequency is less than once a year to every two years (28%).

What are top challenges when updating sales tax solutions?

Ensuring that a sales tax solution is up-to-date with changing rules and requirements was the top challenge cited (53% of respondents) in the survey. The risk of business disruption (49%), time required to learn the tax solution(s) (33%) and resistance to change (33%) were also top challenges.

Additionally, respondents who host sales tax solutions in a public cloud experience less risks of business disruption than other groups, while respondents who host solutions on SaaS cloud-based solutions were more likely to note experiencing no challenges.

The number one concern of the IT team related to change overall at their organization is inadequate staffing/internal skills (38%). Respondents said it is difficult to prioritize multiple projects at the same time, obtain the internal knowledge needed to support solutions and achieve an ROI for the business. The other top concerns cited were user adoption and training (35%) and high costs (26%).

What does a successful technology change bring?

Successful technology changes are based on the increased efficiencies gained while ensuring that the completion of training sessions take a back seat. The majority of respondents (77%) said that increased efficiency (measured in time for end users to complete processes) was the top way they define if a technology change is successful.

A reduction in support requests after the implementation or migration takes place (59%) was also a top definition of successful technology changes, followed by adoption rates (41%) and intuitiveness of technology/systems (38%).

Moving to a cloud-based sales tax solution will give your business major efficiencies to the IT team, allowing them to focus on more strategic initiatives. This happens because there is reduced manual work, better integration, faster updates, more automated processes and easier data management.