The current state of ERP cloud migration: part 2

While most companies (78%) have adopted cloud technology solutions, substantial room for improvement remains, according to a PwC survey of 1,000-plus business leaders. Only a small portion of cloud adopters (10%) are leveraging their cloud investments to derive higher-value benefits – including annual revenue growth of 15% or more – compared to organizations that are not “cloud-powered.” With this in mind, we interviewed Oracle Group Vice President, ISV & Cloud Native Strategy and Business Development David Hicks and Vertex Global Director, Oracle & NetSuite Global Partnership, Marc Duclos to better understand what enables cloud migration success.

In the first part of our discussion, you highlighted the business case for cloud-powered ERP systems and tax engines. Once an organization decides to invest in a cloud-based ERP system, what actions help drive successful implementations?

David Hicks: ERP is often treated as the tip of the spear. Once an organization decides which ERP system to deploy, everything – including decisions regarding tax automation -- flows from there. A tax engine is one of the most important components of an ERP deployment, so it is crucial for them to have a seat at the project table. When tax groups share their requirements early in the planning process, organizations tend to implement a much more robust ERP solution.

Marc Duclos: The tax team always needs to gather data from the ERP system to fulfill its compliance and reporting requirements. If the tax group doesn’t share its data requirements at the beginning of the implementation conversation, compliance requirements are often neglected during the ERP rollout. In those cases, an 11th-hour fix must be performed, which takes time, adds cost and introduces additional risk. It’s best for tax and IT to work together from the start of the project while developing a shared understanding of tax data requirements and what the implementation roadmap looks like.

When figuring out which tax automation solution to integrate with the ERP system, which should buyers evaluate?

Marc Duclos: The length of the partnership between the ERP company and the tax technology provider is a good place to start. A long track history means that the two vendors have conducted hundreds of joint implementations, amassed lessons learned, developed deep and broad industry knowledge and figured out how to integrate the two systems as efficiently and effectively as possible. Vertex has enjoyed a strong relationship with Oracle for more than 25 years, and we’ve even taken one of our customer facing solutions which was on-premise Oracle e-Business suite applications and migrated it to the Oracle cloud infrastructure.

David Hicks: Our out-of-the-box, pre-built, supported, validated integration with Vertex is huge. Our shared customer base is also important to keep in mind. Oracle very much specializes by industry, and Vertex can do that with us on a global basis. Also, companies are no longer static. Ten years ago, if your company consisted of 10 people working from a garage in Kansas City, you were probably only selling to customers based in North America. Today, your 10-person company may be selling products to customers in 45 countries. When you make ERP and tax technology decisions, you should assess the breadth and maturity of the players you’re picking. You should also look beyond whether they can support your business today and assess their ability to support your needs as you expand and grow in the future.

Is there anything else that tax, IT, and finance groups assessing ERP systems and tax engines should keep in mind?

David Hicks: I think it’s interesting that systems integrators (SIs) no longer need to spend so much time on large implementations and extensive customization work because cloud-based ERP systems can be updated more easily, more frequently and at a lower cost. As a result, many SIs now spend more time training customers on their new solutions and sharing best practices. Plus, you can access these systems from any device in any location now. These changes mean that finance, tax and IT teams have more time to focus on generating revenue, innovating and enhancing the value they deliver to their customers.

Marc Duclos: Global functionality is extremely important, especially regarding tax compliance. It’s well-known that U.S. sales tax rates are complex, given that they constantly change. But setting up value-added tax (VAT) and goods and services tax (GST) compliance and reporting capabilities is also becoming increasingly complicated. These requirements vary country by country at a point when more are putting in place new e-invoicing and real-time reporting requirements. You want that functionality in a tax engine – and you need that tax engine to easily pull all tax-relevant transactional data from a product like Oracle Cloud ERP. Global functionality in a tax engine has to be there.

These shared considerations and insights highlight the crucial role of a cloud-powered ERP system in driving business growth and competitive advantage. The decisions to rightly integrate tax automation from the onset, choose a proven tax technology provider with a demonstrated partnership history and ensure multifunctional and global adaptability of your tax engine are pivotal for cloud migration success.  

The shift to the cloud isn't just about embracing new technology - it's a strategic move that can redefine the agility and efficiency of your tax, IT and finance functions. As companies strive to adapt to change, grow and navigate increasingly complex tax landscapes, integrating a robust cloud-based ERP and tax engine can enable them to turn these challenges into opportunities. This fosters not only compliance and reporting efficiency, but also a foundation for innovation and value creation that supports future business needs. 

For additional information on extending the value of your ERP, watch David Hicks and Sal Visa, Chief Technology Officer at Vertex, in their latest on-demand webcast.