Thomson Reuters is building bridges with NetSuite and other vendors’ enterprise resource planning software, tying its sales tax technology to theirs.
Last month, Thomson Reuters announced it has integrated its ONESOURCE Indirect Tax sales tax technology with NetSuite’s cloud-based ERP system (see Thomson Reuters Integrates Indirect Tax with NetSuite). Thomson Reuters hooked into NetSuite’s ERP system through an application programming interface.
“NetSuite has historically not offered an API, which is new in their 16.1 release,” said Chris Carlstead, managing director of Thomson Reuters’ indirect tax and property tax business. “Before, we would have had to build a custom integration and maintained that custom code, so we’re the first to market with a standard integration. That will then be released with every NetSuite release going forward. That offers the customer a more streamlined approach in implementing a tax engine, as well as bringing them access for the first time to the Thomson Reuters engine.”
Carlstead is looking to differentiate Thomson Reuters’ sales tax technology from the competition.
“Where we really started to differentiate ourselves and where the growth, especially over the last few years, started to pick up is that we are one of the sole providers of our own content, and we went global,” he said. “We got to that global market faster than our competition and as a result it’s really helped us in that space.”
When he joined Thomson Reuters a year and a half ago, the company had already integrated with Oracle and SAP. But he saw opportunities in building links to ERP systems for small and midsize businesses.
“Clearly there was a movement afoot in that midmarket to SMB space,” said Carlstead. “Folks we didn’t even expect to be competition, like Avalara, have done a good job of creating a market down there. We internally looked at where we stood, and from a product standpoint, we knew we had the right offering, and from a content standpoint, we knew we needed the right offering. What we needed to do was really start focusing on that market. We didn’t want to do a ‘me too.’”
Other corporate sales tax software vendors like Vertex have also been focusing more on the SMB market.
Carlstead admitted that Avalara has managed to build links to hundreds of other vendors’ software, but Thomson Reuters is taking a more targeted approach.
“From the standpoint of Avalara and their 400 integrations, maybe in time we aspire to get there,” said Carlstead. “But we’re more targeted in terms of having strategic relationships. We also are working very closely with Microsoft and particularly with the Dynamics product, and focusing on those new markets initially as our strategic kind of entry point. Within the Microsoft category we have an integration with GP as well as an integration with AX on 2012, and we’re now working with Microsoft on an AX 7 integration as well. On the NetSuite side, we did our first integration with their SuiteTax API, which just launched in March. Through those two channels, and just given the number of customers of those product offerings, that’s where we’re really looking to focus the growth.”
Thomson Reuters has recently added a developer community to engage third-party software developers to build further integrations from its tax software to their systems.
Overall, Carsltead sees great opportunity in the sales tax technology market as more businesses go international.
“I would have defined a multinational a couple of years ago as a many-country, multibillion-dollar company,” he said. “Today, with current trends, multinationals can be mom and pops that just opened up on eBay. One day they’re selling just to the U.S., and the next thing you know, they’re getting goods from China and they’re selling into Latin America and facing all the complexities of Brazil. That is a direct result of cloud enablement and e-commerce and in general the acceleration of technology. It’s put these SMB companies in a great position to grow their businesses at a lower cost structure, but the corresponding impact is that they’re now engaged very heavily in a tax world that they’re not prepared for. That’s really the opportunity for us in the software space.”
Thomson Reuters is able to leverage its international presence to provide its customers with global tax research content.
“We have organically built content built by a team around the world that holds the same data integrity and consistency in processes to ensure that the quality across the globe and the depth of that content is available and ultimately pretty easy for our customers,” said Carlstead. “We feel we’re unique in that way. That greatly differentiates us in the marketplace against our competition. The second area of opportunity is just the global nature of our offerings and being able to bring that enterprise benefit, if you will, into the SMB market, which is getting more and more global and finding themselves more impacted by global taxes than they have been in the past.”
In addition to sales and use tax and indirect tax, ONESOURCE also includes software for property tax, transfer pricing, workflow, and global trade management. “From soup to nuts, we can handle everything with a single vendor in a shared platform,” said Carlstead.