Get “fit” for an AI-led future

Stephan H. and Neetin Datar , SAP

Something significant happened with SAP’s Q1 2024 quarterly earnings call on April 22nd, 2024. SAP disclosed SAP Cloud ERP Suite growth numbers as a separate line item for the first time. In its evolved disclosure strategy, SAP has rolled up the financial results for cloud apps managing finance, supply chain, procurement, human capital management, commerce, travel, and more, as well as the fast-growing BTP, data, and analytics (Figure 1).

In Q1, revenue from the Cloud ERP Suite was up 32% and reached $3.48 billion US. This represents nine straight quarters of 30%-plus growth.

The impressive growth of SAP Cloud ERP Suite indicates an acceleration in the transition of enterprises and their IT workloads to the cloud. Enterprises want to modernize their business application portfolios and prepare for an AI-led future.

SAP’s R&D investments and innovations in cloud apps and AI

Stephan and I each have had the fortune to work at SAP for 20+ years on the product side of the house. As product experts and from our seat in the stadium, we see SAP continue to invest significantly in innovations and integrations across its entire portfolio of Cloud ERP, BTP, and all the Cloud LoB applications that make up the SAP Cloud ERP Suite. And now, with GenAI, the investments have gone up a notch. Our kudos to the SAP Board and Christian Klein for their laser focus on customers' needs to transform, be AI-ready, and drive business outcomes.

SAP is back to doing what has been its rich legacy – being a product-led organization. And customers love it!

Here are a couple of investments specific to the cloud apps that stand out:

Cloud software — modular and composable

Across SAP’s broad cloud portfolio, our product leaders strategically modularize the software and deliver a Suite specific to their solution areas.

For example, we have SAP S/4HANA Cloud Public Edition in the cloud ERP space, optimized for the mid-market segment. It has the core functional modules of finance, sales, procurement, services, mfg., and supply chain for enterprise management. Several BTP-based apps surround it as complementary modular apps. These BTP-based apps are purpose-built, deliver specific business outcomes, are loosely coupled, have a harmonized UX, are interoperable, API-based, and follow the strict Suite Quality guidelines, including common semantics. Another example of modularity in SAP S/4HANA Cloud Public Edition is its use of SAP SuccessFactors for all its HR-related capabilities, including People Data.

The advantage of software modularity is that customers are more nimble and agile and can better adapt to the prevailing market conditions. They can easily add the required business capability to recompose their processes. Besides giving customers the flexibility of implementing the core ERP scope modules and then adding industry-centric modules (Figure 2), here are some composable scenarios that our customers take advantage of based on their market needs, situations, and ambitions -

• Need to drive business model innovation in your company? Leverage SAP Subscription Billing. An enterprise may want to add recurring billing capability instead of one-time billing. SAP Subscription Billing, a BTP-based app, extends the SAP S/4HANA Cloud Public Edition’s Solution Order capabilities, making this easily possible. The common Fiori theme, master data, user identity, APIs, and use of boosters for implementation all help to make the addition easier.
• Need to add indirect goods buying capability for your employees to reduce cost and risk? Leverage SAP Ariba Buying, base edition. Buying indirect goods at companies is often a considerable challenge from a cost and compliance perspective. SAP Ariba Buying, base edition works seamlessly with SAP S/4HANA Cloud Public Edition and provides a slick, personalized buying experience while standardizing and streamlining the procurement process.
• Need to drive efficiencies and profitability while de-risking your projects? Leverage SAP Cloud for Projects. Any service company must manage projects on time and within budget while maintaining margins and customer satisfaction. This is where SAP Cloud for Projects, a BTP-based app with collaborative project and resource management capabilities, can help. It works seamlessly with SAP S/4HANA Cloud Public Edition to drive the orchestration of projects, resources, and teams across organizations, companies, and locations to deliver successful projects.
• Need to bring your HR (people) and CFO (money) offices closer? Leverage the out-of-the-box integration of SAP S/4HANA Cloud Public Edition with SAP SuccessFactors Employee Central. People and money are two of the most critical assets at most companies, and getting the HR and finance offices closer makes sense. SAP delivers out-of-the-box integration of SAP S/4HANA Cloud Public Edition (Finance capabilities) with SAP SuccessFactors Employee Central. People data is now consistent and shared between HR and finance teams. This way, HR and Finance offices can leverage people-related insights to drive talent decisions, e.g., budget planning, cost center assignments, and overall costs, performance, and risks.

Recently, Eric van Rossum, Chief Marketing and Solutions Officer of SAP Cloud ERP, wrote a blog titled “GROW with SAP: Add-On Packages Expand the Value of Cloud ERP for Growing Businesses.” It covered the new add-on packages with the GROW with SAP offering. These new add-on packages are uniquely tailored to the needs of finance and HR functions. Additional GROW with SAP announcement is expected at the upcoming SAP Sapphire events (Orlando, June 3rd to 5th; Barcelona, June 11th to 13th). Stay tuned.

Business AI

The Business AI era is here, and SAP is in the thick of it. SAP has been offering narrow, ML-based Business AI solutions for a while. Generative AI opportunities are new and transformative and have captured everyone’s attention. SAP believes customers best consume Business AI when embedded in the end-to-end processes, providing deep insights that are contextual, accurate (no hallucinations), explainable, and unbiased. In short, SAP’s goal is to deliver Business AI solutions that are relevant, reliable, and responsible.

This blog won’t do justice to this fast-paced topic nor to the amount of focus and work that is going on in Business AI within SAP. Instead, we highly recommend that you attend the upcoming Sapphire events. The keynotes, tracks, and product announcements will be exciting and worthwhile. Virtual attendance is also possible.

Adopt GROW with SAP or RISE with SAP: Get “fit” for the AI-led future. Be best-in-class.

Every company’s journey to the cloud and AI era is unique. Customers worldwide trust SAP and our ecosystem to bring out their best. A big reason for this trust is that they know SAP can future-proof their technology and innovation. Moving most, if not all, of their workloads to the cloud and leveraging the possibilities that GenAI promises is high on customers’ agendas.

SAP offers two avenues to do just that:

·?????? GROW with SAP is an optimized offering for net new mid-market enterprises, smaller subsidiaries, and acquisitions for their transition to the cloud.

·?????? RISE with SAP is a comprehensive transformation offering for our installed base of large enterprise customers transitioning to the cloud.

SAP and its ecosystem stand ready to assist every organization— enabling them to meet their strategic goals and be the best in class in the AI era.

Additional links:

• SAP Sapphire registration site: https://www.sap.com/events/sapphire.html
• PureTech Scientific Scores Leading Position in the Market with Move to the Cloud.
• Brussels Airport Company: Taking off to the cloud to build harmonized, connected, and efficient operations.
• Convista Harmonizes Workplace Culture with SAP SuccessFactors Employee Central and SAP S/4HANA Cloud Public Edition.