Part 1: Essential Insights for Tax Functions in Multinationals
What a tax function needs to know
This is the first of a series of articles about the SAP Business Technology Platform with a focus on an overview of relevant functionalities for a tax function of multinational groups.
SAP BTP – A strategic product for SAP
Starting in 2023, SAP has relaunched its SAP Corporate Strategy positioning the SAP Business Technology Platform (BTP), which replaced the SAP Cloud Platform at the heart of SAP’s product strategy as the unified, business-centric, open platform of SAP. The SAP BTP plays a key role in SAP’s mission to enable every enterprise to become an intelligent, sustainable enterprise[1]. Therefore, if a tax function of a Multinational looks for a future-proved application the BTP is definitely a great choice due to both the fact that the BTP will be used across the whole company and that state-of-the-art technology can be used.
SAP BTP – What is it about?
SAP BTP is an open, business-focused, multicloud platform that gives you everything you need to make confident decisions and drive continuous innovations. It’s the fastest way to turn data into business opportunity with analytics, intelligent technologies, data management, integration, and application development. SAP can provide all of this on top of the infrastructure of your choice[2].
In other words, it’s a portfolio of SAP products, services, and solutions that are brought under one umbrella. It’s a collection of on-premise and cloud products and solutions grouped under four integrated technology pillars:
- database and data management,
- analytics,
- application development and integration, and
- intelligent technologies (see Figure 1.3)[3].
As you can see from Figure 1.3, the BTP supports all relevant dimensions of a tax technology transformation: Data (Management), Processes, Technology and People.
Let’s take a closer look at each pillar:
Database and data management: This pillar consists of everything you need to store, access, process, integrate, and interpret all relevant data in your (finance and tax) architecture. Figure 1.4[4] shows the key features and some products that are part of this pillar.
Analytics: Using the products under analytics, you can plan and forecast, make rapid decisions, and truly become insight-driven. Figure 1.5[5] shows the key features and some products that are part of this pillar.
Application development and integration: SAP BTP is designed for business transformation and not just technology transformation or optimization. The application development and integration pillar gives a company and therefore also a tax function everything needed for agile process innovation, extension, and integration in the cloud and across hybrid scenarios. Figure 1.6[6] shows the key features and some products that are part of this pillar.
Intelligent technologies: AI, machine learning are getting embedded into everything—both simple and complex business and tax processes. Figure 1.7[7] shows the key features and some products that are part of this pillar. SAP solutions such as SAP Intelligent Robotic Process Automation (SAP Intelligent RPA) and machine learning let you automate the kind of complex repetitive decisions that make up a significant portion of business processes. This frees up your most valuable resource of all, people, who can now focus on more valuable tasks like tax planning or new tax requirements, like e-Reporting, ESG and Green taxes.
Conclusion
e-Reporting, SAF-T Reporting, Tax & Sustainability, Pillar Two: all this already existing and new tax requirements – ideally embedded in a tax control framework – need technology to be managed. To be able to remain compliant, tax functions within Multinationals need state-of-the art and future proved technology. SAP provides with the SAP BTP a comprehensive platform for the digital transformation and therefore also for the tax technology transformation in the coming years. As a Head of Tax talk to your colleagues in Finance, from the Business and especially with the IT guys about the SAP BTP. Very often the platform is already in place.
Part 2: Exploring SAP BTP Functionalities for Tax Functions in Multinationals
What services are available on the SAP BTP?
In the meantime there are a huge number of services available on the SAP BTP (see link https://discovery-center.cloud.sap/viewServices?regions=all&category=all).
Some highlights are:
- SAP Analytics Cloud, embedded edition: Used for analyzing data from source systems
- SAP Build Apps: Used for low-code/no-code application development
- SAP Business Application Studio: Used for developing applications
- SAP Cloud ALM: Used for managing implementations of cloud solutions
- SAP Conversational AI: Used for creating chatbots
- SAP Data Intelligence: Used for parsing data with AI and machine learning
- SAP Data Warehouse Cloud: Used for storing and accessing data from source systems
- SAP HANA Cloud: Used for in-memory database management and application development
- SAP Intelligent RPA: Used for automating repetitive, rule-based tasks with machine learning
As you can see there are definitely some services, respectively functionalities which are interesting from a tax function point of view in terms of data management, analytics, application development and Robotic Process Automation.
Is SAP BTP a Platform as a service (PaaS)?
The SAP Business Technology Platform (SAP BTP) is an open platform as a service (PaaS) offering that delivers – as mentioned – different kind of products and services. In case of PaaS, the SAP BTP is therefore delivered as a resource (hardware+software) to the customer.
In general, PaaS is a cloud computing model where a third-party provider delivers hardware and software tools to users over the internet. A PaaS provider hosts the hardware and software on its own infrastructure.
Is the SAP BTP a Software as a service (SaaS)?
In this case the SAP BTP is delivered as a cloud service to the customer, that is, an entire cloud-based application is provided that customers can access and use In general, Software as a service (or SaaS) is a way of delivering applications over the Internet—as a service. Instead of installing and maintaining software, you simply access it via the Internet, freeing yourself from complex software and hardware management.
Therefore, the SAP BTP can be used in both ways, as PaaS or as SaaS.
What is the relationship between the SAP BTP and (SAP) hyperscalers?
Due to the fact that the SAP Business Technology Platform (BTP) is an open platform based on a multi-cloud foundation enabling it to run on top of different hyperscalers like Microsoft Azure, Amazon WebServices (AWS), Google Cloud & Alibaba Cloud. The partnership with these hyperscalers has made it possible for SAP to scale and offer SAP BTP across various regions.
In general, SAP hyperscalers refers to public cloud providers that SAP uses as hosting partners for their cloud solutions and services.
How do the license models of the SAP BTP work?
SAP BTP offers in general two different commercial models for enterprise accounts:
1a. Consumption-based commercial model: Your company receives access to all current and future services that are eligible for this model.
SAP Cloud Platform Enterprise Agreement (CPEA) is SAP’s first consumption-based pricing model. It lets customers buy, consume, and pay based on their use (with an upfront commitment.) CPEA reduces complexity and costs with self-provisioning and real-time usage and recording. Customers can turn the services they need on and off, then pay for what they consume.
1b. Pay As You Go (PayGo): Another commercial model SAP offers is Pay As You Go (PayGo). There is no up-front commitment as compared to the CPEA. Like when using a credit card, the customer is billed every month for the services they’ve consumed. There is a premium charged for the convenience of not having to commit.
b. Subscription-based commercial model: Your company subscribes only to the services that you plan to use. Especially, if it is about a specific use case with known usage of individual services the subscription-based model makes sense.
Therefore, there are different models to be considered by a tax function. Very often it makes sense to align with other stakeholders within the company to on the model.
If you have questions or if you need additional information, please feel free to contact: technology@rtcsuite.com
Ridvan Yigit, Founder & CEO, RTC
+44 7833 5373 88
Sources:
[1] How SAP Business Technology Platform (BTP) drives speed and value around the core | SAP Blogs, accessed 19 October 2023.
[2] , [3] , [4] , [5] , [6] , [7] Banda et al, SAP Business Technology Platform, Rheinwerk Publishing, 2023, p. 31, p. 33, p. 34, p. 35, p. 36, p. 36.
