Today we have more data available to us than ever before. The question is, how can we maximize it? For many, the most challenging task is locating a data integration tool capable of managing and analyzing a wide range of data from an ever-changing set of sources. That data, however, must first be removed before it can be examined or used. In this article, we define the term "data extraction" and analyze the ETL process in depth to understand the crucial function that extraction plays in the data integration process.

What is SAP Data Extraction?

The process of collecting or obtaining diverse types of data from various sources, many of which can be poorly organized or completely unstructured, is known as data extraction. Data extraction allows you to consolidate, process, and filter data so that it can be stored in a centralized area and modified later. These locations could be on-premises, cloud-based, or a combination of both (hybrid model). 

Data is a priceless resource! Others refer to it as the "oil" of the digital economy. Data empowers organizations to learn more about its clients and how to serve them better. It can also assist you in better understanding your business processes so that you can make them as efficient as possible.

You must first comprehend your data and identify hidden patterns, trends, and insights to do so. The initial step in this procedure is data extraction. Most businesses have data scattered across multiple sources, such as CRM systems, ERP systems, financial records, etc. That is where data extraction comes into place; it is the process of extracting data from these sources and transferring it to an analytics platform that can automatically generate insights, analyses, and predictions. 

SAP Data Extraction tools for Tax and Audit 

SAP standard solution for tax and Audit centralizes and automates tax controls to minimize compliance risks. It has, though, some pitfalls. The SAP standard solution is not a good fit when: 

• You need to consolidate data from multiple data source systems such as archived files, other SAP ecosystems, non-SAP systems, etc. You are required to submit SAF-T Cash 

• Register file. If You have some specific requirements e.g., collect data from custom tables and fields, RE-FX

• Resource constraints or time constraints to understand and implement the solution by yourself

The challenges faced by Tax and IT teams 

• Keeping up to date with the latest changes in legislation. The digital landscape for tax is fast evolving and keeping up with both region-wide and country-specific legislation is an ever-increasing challenge for businesses worldwide. 

• Short timeframes. Tax authorities continue releasing new versions with short notice time frames to get ready to get the right data to answer to such requirements. 

• Lack of standardization among countries. Although there are some standard formats like the Standard Audit File for Tax (SAF-T), the truth is that the tax requirements in Europe are very different from one country to another. Some countries, like France or Poland, have already introduced real-time reporting and B2B e-Invoicing mandatory (or they are planning to do so by 2024). Other countries, like Norway or Poland, are sticking to SAF-T Standards, while countries like Germany or the United Kingdom have, instead, adopted country specific regulations. 

• Room for errors with SAP standard extraction tools. SAP provides standard tools for Data Extraction, however these tools are difficult to configure. In the end, it is highly time consuming for Tax and Audit teams to fix all the errors and carry out reconciliations to avoid non-compliance and penalties. 

• Multiple Heterogeneous Data Sources. For companies that have multiple data sources in SAP ECC, SAP S/4HANA, other SAP systems or non-SAP systems, it is difficult to combine all data from multiple systems and create a single report.