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The time is now for ERP cloud migration and tax transformation: Part 1

Thomson Reuters Tax & Accounting  

· 6 minute read

Thomson Reuters Tax & Accounting  

· 6 minute read

ERP upgrades present a perfect opportunity to fully modernize your tax operations.

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The rapid pace of innovation means powerful new tools and capabilities are waiting for tax teams—if they can take advantage. Unfortunately, uneven tax modernization leaves many departments working across disparate, disconnected solutions. Meaningful transformation requires carefully re-evaluating tax platforms for gaps or overlaps, and asking some important questions:

Decision-makers often seek ways to work smarter, but finding the right time to switch can be challenging. Big transformation events like ERP upgrades offer a perfect opportunity to enhance functionality and fully modernize tax operations.

 

Highlights: 

  • Integrate tax tools during ERP upgrades for seamless modernization.
  • Strategic planning minimizes disruption during cloud migrations.
  • Dual-track modernization aligns tax and ERP transformations.

 

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Embedded systems should ensure peak operational performance

Upgrading your ERP? What about tax transformation?

Align leaders on core issues and share transformation resources

A dual-track modernization strategy helps minimize business disruptions

Seizing tax transformation opportunities in the digital age

 

Embedded systems should ensure peak operational performance

Important systems get that way by embedding themselves into, and eventually becoming, infrastructure. In construction, placing core systems such as electric and plumbing happens early and only after much thorough planning. This ensures systems operate at peak performance and efficiency while staying out of the way as people work or live.

Inside the enterprise, we see the same thing happen when core digital platforms such as ERP and tax solutions are carefully embedded into and connected with the business and other technologies. Over time, these applications become fundamental as more processes and decisions take place “in platform.”

But the same reach and connectivity that make these systems effective also make them difficult to replace. Those core digital systems are essential, like plumbing located under the floor and connected to almost every room in the building. The deeper they get built into the business, the higher the perceived cost of switching.

This aversion to change leads to inaction. One might endure low water pressure and even the occasional leak, still preferring these problems to the enormous uncertainty of replacing an entire system. Inside the enterprise, this dependence can lead to teams settling for suboptimal solutions that slow the tax department and the business down.

Upgrading your ERP? What about tax transformation?

While tax departments struggle with modernization, software makers continue to innovate. The SaaS paradigm and the rise of software-defined everything have radically reshaped how business tools can be delivered in the cloud. This is where the future of tax and finance are being built, making migration more urgent than ever.

Even as a Deloitte study showed that 40% of tax professionals said a unified cloud ERP was an ideal end state, many organizations struggle with timing. Leaders should consider the benefits of dual track modernization, where a critical ERP cloud migration serves as an ideal opportunity for tax platform change and transformation.

Align leaders on core issues and share transformation resources

Tax departments are unevenly modernized, often working across a disparate mix of manual and automated processes. Our 2024 look at the corporate tax department showed over 45% of tax departments felt like they were still operating ‘reactively’. During an ERP migration, take a strategic, big-picture view across all platforms.

This is also an excellent chance to align leaders around core issues about collaboration, governance, and compliance and work to leverage shared transformation resources. A lot of the same questions and challenges must be answered and solved for both ERP and tax upgrades. Stakeholders can collaborate more effectively, making shared decisions that impact both platforms.

  • Which processes still require automation?
  • Is our data ready? What about entities?
  • How do we solve data compliance and security issues?
  • What about business continuity?

Big upgrades often mean lots of hard work required just to get to those core systems—why not make the most of your efforts? If the floor must be removed to access plumbing, upgrading the electric at the same time makes the most sense. This CIO article has a complete list of things to consider on your next cloud ERP upgrade, and nearly every one of them also applies to tax transformation.

A dual-track modernization strategy helps minimize business disruptions

Big upgrades are always potentially disruptive, even with modern, streamlined processes. Generally, it’s not the technology itself driving the problem, but adjacent change management issues that impact how teams access and use the technology. A dual-track modernization strategy can leverage those shared resources across both paths.

It also lets an organization work proactively early on in both processes to best understand the potential impact of any upgrades. Once the processes begin, the organization minimizes the length and impact of any disruption. It’s not just about avoiding a loss of technical service, but a quick return to maximum productivity.

  • Do we need to acquire new skills or hybrid roles?
  • What comprehensive training and onboarding needs to take place?
  • What about communications plans? Who needs what information?
  • How will processes and best practices be affected?

In most cases, technology changes won’t be the biggest problem—it’s about workflow and governance. A little strategy and preparation can go a long way to minimizing disruption. If you are already shutting down to replace the plumbing or the electric, why not do both?

Seizing tax transformation opportunities in the digital age

As the urgency for tax transformation intensifies, businesses must find ways to maximize the impact of new technology. Embracing cloud solutions unlocks advanced capabilities for both ERP systems and overall business operations, while simultaneously creating an ideal opportunity for tax transformation. Choosing the right solutions takes thorough planning and consideration, while upgrades and replacements require the same due diligence. Your next ERP cloud migration could be an enormous opportunity for tax transformation. Is your tax team ready?

Learn more about the value of updating your tax operations from the beginning of your organization’s digital transformation. Download our e-book Maximizing ROI: Why Early Involvement of Your Tax Team is Crucial in Digital Transformation to ensure your tax department is included from the start.

 

Maximizing ROI in digital transformation

Maximizing ROI in digital transformation

Get your tax team involved in your organization's digital transformation initiatives

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Part 2: Navigating challenges in tax integration during ERP cloud migration

Part 3: Unlocking strategic benefits during tax integration and ERP migrations

 

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