SAP Is Taking Care Of Business, AI

AI means business. It’s a term that has almost too many meanings. AI means business because (as we know) the discipline itself is currently basking in the glow of a renaissance brought about by the advent of generative artificial intelligence and the breadth of the large language model universe. AI means business because it is impacting almost every single modern enterprise technology platform and every commercial application across all industry verticals. But perhaps most of all, AI means business because AI is first and foremost being applied to business applications and use cases for the greater good of productivity, efficiency and sustainability.

That’s some of what SAP means by business AI, but it still only describes part of how the Germany-headquartered softwarehause really wants to express its intent in this space. In SAP terms, AI is for business challenges, business problems and business conundrums that need not just solutions, but workable functional resolutions.

Vorsprung durch Technik

It takes a fair degree of corporate self-belief and bravado to attempt to coin a trademarked product name relating to business AI at this stage of its evolution; even more so if you’re going to simply call it Business AI, but that’s what SAP has done. Fellow German homeland engineers advertised Audi automobiles with the slogan Vorsprung durch Technik (which translates to progress through technology) and didn’t worry about the fact that the original German was largely uninterpreted by most English speakers. Why then would an organization with a similarly pragmatic mindset worry about borrowing a foundational descriptive term and using it as a brand? It didn’t.

“The Business AI innovations we’re [currently] announcing in 2024 will not only change how people work with SAP solutions, but how people work overall,” said SAP CEO Christian Klein. “[Our] AI announcements and partnerships build on our commitment to deliver revolutionary technology that drives real-world results. By infusing Business AI across an enterprise cloud portfolio that powers the world’s most mission-critical processes, SAP is igniting a new wave of insight and ingenuity in global business.”

What Is SAP Business AI?

But what is SAP Business AI, really? Is it just AI used in business units, is it AI applied to problem-solving for real-world business operational mechanics, or it is AI applied to practical real world commercial scenarios? SAP would probably like us to answer yes, both, all three. The company has used a recent user convention to explain how examples include new generative AI capabilities in SAP S/4HANA Cloud Public Edition that let sales managers create orders by scanning unstructured data; AI-generated reports in SAP SuccessFactors designed to aid human resources managers by making employee compensation recommendations; and forecasting capabilities in SAP Sales Cloud that predict combinations of salespeople and products most likely to drive sales.

To put those examples in simple terms, SAP Business AI all about taking the dirty and messy data related to the information behind real-world decision making and digitizing it into carefully prepared forms and formats so that AI engines can act upon it and make smart decisions for us.

“SAP’s natural-language generative AI copilot Joule is also expanding throughout the solution portfolio to become the company’s single interface. Joule quickly sorts and contextualizes data from multiple systems to surface smarter insights. It launched last fall and is now embedded into SAP S/4HANA Cloud solutions and others including SAP Business Technology Platform, SAP Build and SAP Integration Suite. Further expansion by year-end will include SAP Ariba and SAP Analytics Cloud. Joule also now speaks and understands languages including German, Spanish, French and Portuguese,” noted the company, in a technical blog.

A key part of all of our education in the AI realm has been a new and pressing mandate to ensure that AI is created and developed responsibly, without bias and without the hallucinations that can lead intelligence engines to think that they are right, when they are quite clearly (in human terms) absolutely wrong. With this key requirement in mind, SAP says it is redoubling its commitment to the principles of relevant, reliable and responsible AI. The company has explained how it is adopting the 10 guiding principles of the UNESCO Recommendation on the Ethics of Artificial Intelligence, which seeks to ensure that AI technologies are developed and used in ways that respect human rights and in evironments that promote fairness and contribute to sustainable development.

Almost none of these technology developments happen without the use of cloud computing.

Even in disconnected (or occasionally connected) computing scenarios out on the edge in the Internet of Things, the bulk of the compute, analytics, connectivity, network and storage process here all happen in the cloud… with an ever-increasing amount of that estate also being cloud-native from the start. To dovetail with the industry-wide initiatives running at this level, SAP says it is seeking to improve time-to-value for customers transitioning to RISE with SAP (a branded “bundling” of SAP assets and services that coalesce to help organizations transition to new digital platforms) and help them find the partners they need with the expertise needed for complex SAP S/4HANA Cloud transformations.

Towards A Clean Core

Additionally, new capabilities in the SAP Build low-code and pro-code solution, as well as ABAP Cloud, are promised to advance customers’ journeys toward what SAP calls a “clean core” and ensure customers can easily maintain, upgrade and adapt their ERP systems to take advantage of the latest innovations. This clean core concept is SAP’s take on how application extensions and customizations (a business inevitability in most industries) should be handled as strictly separate from the core SAP application suite – the concept being that too much new custom-built clunky software insertion ultimately leads to brittle systems prone to failure.

Further developments allied to and featuring within the company’s Business AI approach are designed to hold businesses accountable to their sustainability commitments and their need to sustain what are often (post-pandemic) still-fragile supply chains. New features in SAP Sustainability Control Tower and Sustainability Footprint Management track carbon footprints more accurately and help businesses meet regulatory standards. Meanwhile, the SAP Business Network portfolio is now more tightly integrated for supply chain, material traceability and freight collaboration to increase supply chain resilience, while an expanded partnership between SAP and Google will help businesses predict supply-chain risks and find alternatives to navigate disruptions.

Embrace Public Cloud

Looking at why the public cloud is so crucial to SAP customers, the company says that many customers have now moved to switch off on-premises applications for everything from HCM to financials and more so that they can then move to public cloud services more directly. The key impetus factors driving this move is the opportunity to achieve a wider and broader level of standardization across an enterprise’s technology stack – and, secondly, because the formation of public cloud services at this level are essentially modular, there is a more defined ability to be more flexible and extensible in terms of post-deployment enhancement. It’s all about being “more evergreen by default” as Humannad Alam puts it in his role as member of the executive board for SAP product engineering.

In line with this news thread, SAP confirmed a number of partnership extensions designed to underpin its efforts in the AI implementation space. SAP and Google Cloud are among the key partnerships as the firms now bid to use Business AI to help enterprises predict and mitigate supply-chain risks to minimize disruptions and maintain optimal inventory levels. The companies will integrate Joule and the SAP Integrated Business Planning for Supply Chain solution with Google Cloud’s Gemini models AI assistant and Google Cloud Cortex Framework’s data foundation.

“SAP will leverage Meta Llama 3 to generate scripts that render highly customized analytics applications in SAP Analytics Cloud. Meta’s next-generation AI model excels at language nuances and contextual understanding, making it an ideal candidate for translating enterprise business requirements into tangible outcomes. SAP will also add new large language models from Mistral AI, a global company headquartered in Paris specializing in generative AI, to the generative AI hub capability in SAP AI Core,” noted SAP, in a press statement.

Das Neue SAP?

All said and done then, is the SAP of today the new (neue in German) SAP – and if so, what does that new corporate and technical entity represent? Talking to press and analysts about how the company stands today, CEO Klein reflects on the arguably someone bloated stack of software that SAP was known for around half a decade ago. With all of its own product developments and the wide-ranging nature of the company’s acquisitions, this was a time when integration was tougher i.e. not just to external sources and platforms, but also inside SAP.

“The total SAP platform has now been far more richly integrated both internally and externally as it has itself been deeply integrated to SAP S4/HANA. Is there still work to do? Well yes – there’s always work – but the move to modernize and progress towards a single unified public cloud approach is unmatched. If you look at Salesforce, or Microsoft Azure or elsewhere, the work carried out inside SAP is unparalleled. Did we lose some people along the way, yes of course i.e. not every engineer can get their head around cloud modernization in the way that’s needed,” said Klein..

Having previously launched its Leonardo brand back in 2017 as a means of attempting to simplify SAP platform deployment, Klein is brutally honest about that strategy not being quite right for the company. So then, does he think that the newer SAP RISE and SAP GROW business transformation-as-a-service brands will suffer the same fate?

“No, this will not be so. We have some 7000 customers on SAP RISE and we work with these companies every day to make sure they are spending more time working with functional ERP applications and less time working on the software implementation. That implementation element has traditionally taken up far too much time (as much as x10 more dollars are often spent on implementation and customization than on the software itself), which is why we put so much effort into making sure a clean core approach is eminently achievable for customers,” said Klein.

The new SAP appears to have become slightly more humble too. Rather than always trying to build everything it needs itself as an SAP product, the company is now more directly working with partner technologies such as Microsoft Copilot and OpenAI to establish AI functions that would be wasteful to attempt to reinvent the wheel for. This appears to be a genuinely new SAP compared to the ship that ran under the tenure of the previous CEO Bill McDermott. Klein is vastly more technical and much faster to tell customers what not to do, understanding platform engineering and software architecture mechanics as he does. It feels like a new (or at least healthily refreshed) SAP from the outside.

What’s In A Name?

Has SAP done more than simply coin (we might say directly borrow) a snappy name for its approach to the new implementation of AI in modern enterprise software systems? Perhaps yes, perhaps no. What it has done for sure is to get quite pragmatic, real-world and almost matter-of-fact about over AI and how it should now work better, faster, slicker, greener and cleaner. That might just be German efficiency for you.