Issue

Vertex O Series software is used by the current ECCs systems and will still be required for SyWay. The current solution runs on AWS as IasS but Vertex also delivers a on-demand SaaS version of the tool. This KDD aims at deciding which hosting solution would suit best SyWay. We also add a part remated to some etxra tools delivering a smoother implementation.

This KDD does NOT include the Vertex Tax Returns piece.

Recommendation

The recommendation goes for the Vertex On-Demand (i.e SaaS) solution. It will lower the internal workload without compromising on any features. Plus we recommend using the additional extra toolsets provided by Vertex in the form of the Vertex Plus Tools and the Vertex SAP Accelerator.

Both those tools will also simplify the integration between S/4 and Vertex and reduce the workload.

Background & Context

VERTEX is an external software used by Syensqo to calculate taxes on customer and vendor invoices for US and Canadian legal entities.  Tax Rules are customized by legal entities in VERTEX based on Syensqo's Sales and Procurement processes.  The tax rules customized in VERTEX are based on directions from the Syensqo USA Tax Department.  Tax Jurisdiction Codes linked to the Country/State or Province/County/City/Postal Code are assigned to US and Canadian Customer and Vendor master data in SAP.  Tax jurisdiction codes also are assigned to company codes, shipping points, and storage locations for the US and CA.

When a SAP sales order, customer invoice/credit memo, purchase order, or vendor invoice/credit memo are processed in SAP, there is a Remote Function Call (RFC) from SAP to VERTEX to determine taxability of the transaction based on the customization. If the transaction is determined to be taxable, the tax rate is determined by the tax jurisdiction code specified on the customer, vendor, or plant/delivery address master record.  

VERTEX issues monthly updates for tax rule changes, tax jurisdiction code changes, and tax rate changes.  These monthly updates are applied to the VERTEX development, quality, and production servers to ensure tax calculations are correct.

Other critical updates are issued by VERTEX and are applied when requested by the Syensqo USA Tax Department.  Reporting functionality is provided, as are tax return filing capabilities.

Assumptions

SyWay needs additional Vertex instances and cannot re-use the current ones in order to benefit from the simplified integration (with the different tools) and not collide with the current parameters

It will help to start anew and not continue with some of the mistakes done in the initial design (back from Vertex first implementation)

Vertex On-Premise will be stopped and decommissioned with the end of the respective ECCs

Constraints

Vertex On-Demand might require additional licences

Impacts

Vertex On-Demand will reduce the infrastructure footprint for Vertex application (only SIC servers to be installed on Syensqo Azure). Thus high-availability could be easily achieved by setting up multiple SIC servers.

It will also help to restart from a cleaner perspective the configuration in Vertex web application.

Workload on technical team will be lowered as the monthly updates and other signicants updates will be conducted by Vertex (only SIC update to be managed by Syensqo). Technical administration will also be under Vertex' responsibility instead of Syensqo SAP Basis.

Implementation of the 2 additional features will also simplify the Vertex deployment and integration for an additinal but reasonable cost

Business Rules

Options considered

Option A: IaaS/OnPremise solution 

This is the current solution used by the ECCs systems. 

It is made of a 3-tier landscape (DEV+TEST+PROD). Vertex application requires a Database as a Service, an Windows server ton execute the application and the SIC component to interface with SAP backend systems .

Syensqo technical teams must apply every months the update to the jurisdiction code, it requires synchronization between technical teams and application teams

Backup/Restore policies, High Availability and DRPs are designed by Syensqo teams. (today there is no high availability onpremise for the application itself, it relies on AWS EC2 availability)

Syensqo teams can configure the application, loads certificates of exemptions... in the Vertex web access

Access is user/pwd based.

Licensing is based on company revenues

Option B: Vertex On Demand (SaaS)

Vertex On-Demand solution is offered as a SaaS.

Vertex takes care of the monthly updates and service releases

High availability, DRP, backups/restoire are managed by Vertex 

Syensqo teams can configure the application, loads certificates of exemptions... in the Vertex web access. It offers the same features as On-Premise version

Vertex SIC component must be installed on a Syensqo server to communicate between O Series and S/4

SSO can be integrated

Licensing is 

Vertex Plus Tools : 

Pros

• Offers advanced customization, real-time updates, and robust accuracy, ensuring customers always receive the correct tax calculation, even in complex scenarios
• Ensures up-to-date compliance with global and local tax regulations; automatically updates tax rates and rules as regulations change
• Provides detailed audit trails for transparency

Cons

• Higher license cost (to be discussed at contract time)
• Change management (improved business processes, so positive on long term)

Vertex Accelerator :

Pros

• It’s a suite of pre-built ABAP programs that are installed, activated and configured. 
• Addresses most common SAP tax gaps and replaces the need for custom development in SAP
• Faster deployment compared to building a custom integration
• Less need for in-house tax expertise required

Cons

• Higher license cost (to be discussed at contract time)
• Vendor lock-in => more dependency on Vertex. (Mitigation: Vertex has been a good solution for Solvay and now for Syensqo, re-selected via another KDD, worldwide top software provider for US indirect tax)

Evaluation

See also

Change log