Down­load the full inter­view here.

Every rule writ­ten by a reg­u­la­tor even­tu­al­ly becomes a line of code. This con­nec­tion between pol­i­cy intent and sys­tem design is where Ray Grove, Head of Tax and Trade at Thom­son Reuters, has built his career. As gov­ern­ments move com­pli­ance into real time through con­tin­u­ous trans­ac­tion con­trols, the sys­tems that cal­cu­late and report tax are being reengi­neered in step.

Through Thom­son Reuters’ col­lab­o­ra­tion with SAP, Grove and his team are trans­lat­ing that con­ver­gence of pol­i­cy and tech­nol­o­gy direct­ly into SAP-native com­pli­ance capa­bil­i­ties. The scale is real, with the com­pa­ny deliv­er­ing 100 mil­lion rule, con­tent, and log­ic updates in a sin­gle year to keep cus­tomers aligned with shift­ing require­ments — while also inte­grat­ing statu­to­ry report­ing direct­ly into SAP applications.

In an inter­view with ASUG, Grove explained why tax must have a seat at the trans­for­ma­tion table, how clean-core prin­ci­ples and real-time inte­gra­tions with SAP cre­ate ​“truth in process,” and where arti­fi­cial intel­li­gence is begin­ning to turn com­pli­ance data into strate­gic advantage.

This inter­view has been edit­ed and condensed.

Q: How are evolv­ing reg­u­la­tions, tar­iff struc­tures, and geopol­i­tics reshap­ing how orga­ni­za­tions approach tax and trade in their busi­ness strategy?

Maybe I’ll go a lit­tle bit macro first in my response. There’s clear­ly a lot of change hap­pen­ing on the geopo­lit­i­cal side, and that has an impli­ca­tion on the reg­u­la­to­ry side. I think it’s help­ful to start with the core prob­lem tax is meant to solve, since it’s often not con­sid­ered in a clear, holis­tic way. From my view­point across dif­fer­ent areas of com­pli­ance, I see how this broad­er per­spec­tive is essential.

Most peo­ple see tax and trade oblig­a­tions as a way to fund gov­ern­ments or sys­tems, but they’re actu­al­ly not. It’s more about dri­ving the socioe­co­nom­ic struc­tures that we want to have in soci­ety. Tax and trade poli­cies are designed to shape eco­nom­ic and social sys­tems. Because they’re dri­ven by reg­u­la­to­ry bod­ies, they’re inher­ent­ly polit­i­cal — and con­stant­ly evolv­ing. As the world changes, so does the way that we design and shape it. Tax and trade pol­i­cy play a key role in sup­port­ing that evolution.

We see change around those ele­ments of tax that are more real-time, such as the trans­ac­tion­al com­pli­ance side, and with things like Pil­lar Two, or statu­to­ry report­ing require­ments. To achieve real-time report­ing depends on the avail­abil­i­ty and abil­i­ty of the gov­ern­ment, with tech­nol­o­gy, to be more pre­scrip­tive in focus­ing on those changes.

With the rapid expan­sion of con­tin­u­ous trans­ac­tion con­trols and e‑invoicing, real­ly chang­ing to a look-for­ward, real-time world of tax would reduce the tax gap, so it improves col­lec­tion, but it also reduces the  need for audits in the future for gov­ern­ment agen­cies — get­ting tax right the first time.

To give you a data point on trade, we oper­ate over 90% of the For­eign Trade Zones that are auto­mat­ed in the U.S. Last year, I did about 100 mil­lion changes to my trade appli­ca­tion based on con­tent, rules changes, and log­ic changes to meet com­pli­ance and reg­u­la­to­ry require­ments. We aver­aged get­ting those changes to our cus­tomers in about 0.62 days from when those changes were pub­lished. This year, by July, I had already done 86 mil­lion changes.

Q: Thom­son Reuters and SAP have a deep S/4HANA part­ner­ship. How do TR’s tax and trade solu­tions inte­grate with SAP, and how does that cre­ate an advan­tage for customers?

We’ve got an incred­i­ble rela­tion­ship with SAP. We have four cer­ti­fied apps, which is more than any provider, and we’ve embed­ded our statu­to­ry report­ing solu­tion into SAP Con­trol Tow­er for ESG report­ing and compliance.

Work­ing with SAP and being a big part of that ecosys­tem is crit­i­cal for us. When I look at what it takes to be right, to be fric­tion­less, and to be a good expe­ri­ence for my cus­tomers, I need to have those inte­gra­tions not just be a bunch of APIs that are super tech­ni­cal. We spend a lot of time and ener­gy to make sure that we have a clean-core offer­ing for our cus­tomers, and that these are test­ed, val­i­dat­ed, and man­aged like actu­al products.

If you don’t have con­nect­ed process­es with­in the ERP and in the flow of deter­min­ing tax, prepar­ing com­pli­ance reports, or man­ag­ing your e‑invoicing, you no longer have truth in data. If you don’t have truth in your data, you don’t have truth in compliance.

We’re usu­al­ly first to come out with a lot of things. We have rela­tion­ships to make sure we’re test­ing and man­ag­ing. Our solu­tions cov­er over 220 coun­tries from a com­pli­ance per­spec­tive, and we have best-in-class con­tent to deliv­er that. Many cus­tomers use us as part of their com­pli­ance oblig­a­tion with SAP. We try to max­i­mize val­ue for the prob­lem they’re solv­ing and give them ways to get it right the first time.

Q: When ASUG mem­bers move to or opti­mize with­in S/4HANA, how does embed­ding tax and trade ear­ly dri­ve mea­sur­able ROI? 

Peo­ple don’t real­ize this, but tax can pay for a mas­sive part of your trans­for­ma­tion, if not all. I’ve seen projects where just by imple­ment­ing a tax engine and tax pol­i­cy with rules and oblig­a­tions — keep­ing in mind that your indi­rect tax oblig­a­tions are your num­ber one book lia­bil­i­ty and have a mas­sive cash-flow impli­ca­tion — there’s a lot of savings.

Con­nect with Ray Grove on LinkedIn. 

A lot of peo­ple look at tax as ​“good enough” until they get tax advi­sors, but they start see­ing mas­sive oppor­tu­ni­ties to do things bet­ter. On those every­day indi­rect tax pieces, if you’re not appro­pri­ate­ly  cal­cu­lat­ing tax and you’re just going in stan­dard, you could be over-col­lect­ing or over­pay­ing. If you’re not check­ing what your ven­dors are charg­ing you, you could be over­pay­ing tax and nev­er know.

If you include tax at the very begin­ning, you can start look­ing at your item mas­ter and prod­uct clas­si­fi­ca­tion. Are you iden­ti­fy­ing the right prod­ucts, and are you treat­ing them the right way for how you cal­cu­late tax in the juris­dic­tion with all the dif­fer­ent rules?

Most of the world still uses native ERP with rate files for cal­cu­lat­ing tax. They’re leav­ing a lot of mon­ey and cre­at­ing a lot of risk. It’s risk mit­i­ga­tion, and there is cash flow you can uncov­er. On trade, being able to take advan­tage of trade pro­grams means you need the abil­i­ty, data, and automa­tion to man­age that.

A cou­ple of years ago, we bought a com­pa­ny called Pagero, the leader in elec­tron­ic invoic­ing, accord­ing to an IDC report. Part of it is the approach to e‑invoicing with an intel­li­gent busi­ness net­work and the broad­est cov­er­age of any provider.

Reg­u­la­tors want to know in real time what you’re charg­ing for tax. It’s start­ing with invoic­es, but when I refer to CTC com­pli­ance, they’re going beyond the invoice — those busi­ness doc­u­ments you exchange that have impli­ca­tions on com­pli­ance obligations.

The plan is to have sys­tems, appli­ca­tions, and providers to find that lev­el of trans­paren­cy so you can have a real-time, look-for­ward view of com­pli­ance ver­sus what it is today for most orga­ni­za­tions: look­ing back in time at imper­fect data and imper­fect process.

Q: You’ve argued that tax needs a seat at the trans­for­ma­tion table, espe­cial­ly in an S/4HANA pro­gram. Why is that involve­ment so critical?

A lot of orga­ni­za­tions are look­ing at his­tor­i­cal sys­tems and going through finan­cial trans­for­ma­tions to upgrade and sim­pli­fy their ERPs. The num­ber-one delay in a suc­cess­ful ERP imple­men­ta­tion is usu­al­ly tax, because it’s thought of at the very end of the project. Every deci­sion you make from day one of that ERP mod­ern­iza­tion has a tax implication.

How are we going to imple­ment these things? Are we going to use a tax engine? Are we going to use com­pli­ance tools? What orga­ni­za­tions can we work with? What are our oblig­a­tions? What are we cap­tur­ing so that we can get that part done? You need to bring these func­tions into the front end of the deci­sion process, so you don’t miss the date at the end.

The dual oppor­tu­ni­ty: read Thom­son Reuters’ guide to trans­form­ing tax oper­a­tions while migrat­ing enter­prise resource plan­ning sys­tems to the cloud. 

Q: AI is chang­ing enter­prise sys­tems over­all. How is Thom­son Reuters lever­ag­ing AI to trans­form tax and trade man­age­ment for SAP customers?

I have a sin­gle cus­tomer with 120 instances of SAP. It’s not always one big per­fect box. I can become that con­nec­tive tis­sue for com­pli­ance across the entire SAP estate. Maybe you have anoth­er ERP from an acqui­si­tion; I can be that con­sis­tent piece.

We’re work­ing to iden­ti­fy anom­alies as you process, auto­mate the work­flow of prepar­ing com­pli­ance returns, rec­on­cile the trans­ac­tions you cal­cu­late for pur­pos­es of tax to the ERP, clas­si­fy items for tax, and auto­mate chart-of-account mapping.

Because we have this con­nec­tiv­i­ty, rich­ness of data, and mar­ket-lead­ing con­tent, we can apply machine learn­ing, agen­tic AI, or gen­er­a­tive AI across that waterfront.

The next phase is our MCP strat­e­gy. We have a very rich set of APIs — over 600,000 end­points across all APIs. Our MCPs will allow peo­ple, whether using inter­nal tools for AI or ours, to devel­op more automa­tion with agents to help man­age the work. Many orga­ni­za­tions are look­ing at improv­ing busi­ness process­es and tak­ing away some of the bur­den on employ­ees to lev­el up the val­ue they cre­ate. That’s a big focus for us.

Q: Final­ly, how is Thom­son Reuters posi­tion­ing its prod­uct strat­e­gy to serve SAP-dri­ven orga­ni­za­tions in this next wave of intel­li­gent enter­prise transformation?

My goal is to deliv­er as per­fect as pos­si­ble of an expe­ri­ence for cus­tomers at that inter­sec­tion of com­merce and com­pli­ance. My prod­uct strat­e­gy exists in three core pil­lars: embed­ded, con­nect­ed, and intelligent.

Embed­ded means that it’s impor­tant for cus­tomers to do the work where they’re doing their work. A lot of the work with SAP and the inte­gra­tions we devel­op is to make those native SAP expe­ri­ences as much as pos­si­ble, where the cus­tomer doesn’t have to learn a new sys­tem or wor­ry that there’s a gap between systems.

Vis­it the Thom­son Reuters web­site.

Con­nect­ed gives us that truth in process, which cre­ates truth in data and com­pli­ance. Con­nect­ed isn’t just about SAP; it’s also with­in the broad scope of Thom­son Reuters solu­tions. I’ve got a full suite of indi­rect tax offer­ings, from deter­mi­na­tion to com­pli­ance to cer­tifi­cate man­age­ment to e‑invoicing, to trade offer­ings (FTZ, FTA agree­ments, import/​export), and all the direct tax and oth­er offer­ings. With truth in process and truth in data, my con­nect­ed appli­ca­tions can bring that pow­er to the orga­ni­za­tion so you can pre­pare — and get truth in compliance.