AI and SAP

The series of official SAP events in 2023 ended with TechEd. The AI marketing journey started already Q4 2022. In those 12 months, AI was everywhere. Not because AI was in the news thanks to SAP and their intelligent ERP. The news and expectations regarding AI were driven by others. SAP accepted the challenge and started their AI journey earlier the year at Sapphire with the announcement of a wide range of AI powered applications (highlight: analytics can now do forecasting). In the following months, it was a challenge to not get in touch with an AI related announcement or demo by SAP. This shows that SAP is committed to the topic. Many of the events prior to TechEd 2023 were aimed at a non-developer audience. This makes it easier to announce ideas and talk about visions. Yet, at one point in solution selling, marketing slides must be transformed to products. This is where an event like Teched derives its benefits, or justification, in the event calendar.

Announcements

Throughout the year 2023 and at TechEd there were enough announcements to make SAP’s marketing happy and to deliver enough content for analysts and journalist to keep SAP in the news. Talking about ideas is not enough. Ideas must be transformed into products, and these need to be delivered to customers and proof that they work and add the expected value. In that regard, TechEd was filled with way too many announcements of things yet to come. SAP used TechEd as a continuation of their previous events and talked about their ideas and plans with AI:

• “SAP Build Code will be made available to select customers and partners initially and is planned to be generally available in Q1 2024.”
• “These advancements in AI technology are planned to be available in 2024, making it easier for ABAP developers to generate, analyze, and manage code.”
• “These innovations are planned to be available in Q1 2024.” (HANA vector capability)
• “It is planned to be available by Q1 2024.” (intelligent asset and services operations)
• “The first release of the application is planned to be available on a subscription basis in Q1 2024.”
• “The LPM and the process and KPI recommender capability are planned to be available in Q2 2024.”

Plus, things that should be available in Q4 2023. TechEd was in Q4 2023, so why not release at least there during TechEd?

There were many product teasers mentioned at Sapphire. Why not show how these were transformed into products? SAP is an IT company, TechEd is an IT event, therefore this kind of announcements should be considered normal? It is not common to see Apple announcing a new iPhone and stating: you may be able to buy it in 6 months. Microsoft announces and releases software products in very close together in time. If not still while the event is running. The lack of speed to get a product ready and to usage at customers is a risk. Just look at Github Copilot. It is available since 2 years. You can simply buy and start using it. Microsoft is adding Copilot to other products too. At the same time, SAP struggles to get a similar feature to their cloud coding environment:

“SAP Build Code will be made available to select customers and partners initially and is planned to be generally available in Q1 2024.”

Don’t worry, you could sign up for a preview. Super easy process that SAP build to make it as easy as possible for the target group: you sign up to show your interest in the Build Code preview. And than to get an email, that asks you to fill out a form (“We ask that you take the time to fill out the following questionnaire to be considered for this pilot. Please provide your responses in a reply email.” – yes, it is not an app to use, respond in text to the email. If SAP would now only have a tool to easily build apps …), and the data management is up to you (“Note: We received multiple requests from some companies. This questionnaire is being sent to everyone who signed up and verified their email address. It may be helpful to coordinate your response to help streamline the process.”). I doubt that the answers are transformed automatically (with use AI?) into a system / database. Seems save to bet that this is done manually. Is this still irony? If I were working for SAP: this is maxing out the Fremdschämpotential.

From SAP, for SAP

So far TechEd seems to be searching its justification in the event calendar. A justification why an SAP professional should attend it or block time to assist the sessions. Doing hands-on on only soon to be released products is problematic. The announcements are something you can expect for Sapphire, but at TechEd these must be ready to use. As someone commented in a private discussion: What SAP does and what customers want, have rarely been so far apart.

Ready to use and provide meaningful value at customers is what is generally missing when looking at the 2023 product announcements. Let’s try to look back at 2023 and SAP’s AI initiative and how these fit together. I read once in an article about the Signavio acquisition that the dream of Christian Klein is to go to a customer, plug in Signavio and show where and how SAP can optimize the business processes. This vision goes from top down to the actual usage of the apps by the end users. Honestly, this is an end-to-end driven vision that you rarely get from SAP. SAP should foster more on such visions and share their plans on how to make them a reality. Yet, there are rarely these kinds of visions presented, nor how the announced products fit into them.

My impression about the current AI strategy is: the C-level announced that AI is the strategy. It’s the future. Everything that is not aligned to AI must prove that it is generating enough profit to not be canceled. Teams are now trying to get somehow AI into their products. What is easy to do will be released. Harder things to achieve, and mostly the ones where a real AI strategy is needed (aligned with demand, across teams, products, etc.) are put on the waiting list. The result: many announcements of products that use AI. But this is not an end-to-end demand driven product portfolio. Build Code is nice for SAP, but who on the customer or developer side was asking for this? For CAP development, VS Code is mostly used. GitHub CoPilot is an IDE people use when coding in JS/TS. Providing a plugin for AI supported CAP development for GitHub CoPilot is what developers are waiting for.

End-to-end

As we know, SAP aims to deliver AI to their cloud customers. For on premise or ECC customers this means: they are out of focus of SAP’s product strategy. I tried to create a simple overview of how the AI announcements fit to customer’s areas of interest: business and processes, key users and development. Putting this information into a graphic, I came up with this (maybe I’ll detail the graphic in another post):

The graphic shows the usefulness of SAP AI announcements for the 3 areas of interests as well as the SAP software in use. For the business processes area SAP is offering solutions that can be useful for all their customers. Who doesn’t want to be able to analyze processes or get access to process data? Although the older the SAP ERP is, less benefit to gain is possible. Key users and development won’t be able to use the AI tools: no cloud, too old release, not supported. The more a customer goes to the right, the more benefit is possible to get from SAP AI. An S/4HANA cloud customer will be able to get the most out of SAP’s AI announcements. The more SaaS solutions are added, the better it gets. Developers get less benefit in SaaS, as the best usage would be to minimize development to the absolute necessary. The more customers are bought into SAP’s vision and cloud, the more they benefit from SAP’s AI. This should be no surprise at all. The reasons and benefits for SAP are obvious.

Even for customers that are using whatever SAP is currently selling, even for them the AI strategy shows: there are still gaps. In the above graph these can be considered negligible. Let’s change the perspective a little bit. Let’s not ask: what do you need to use from SAP to get the most benefit? Ask: are the AI announcements helping you in an end-to-end scenario? What does it help to see in Signavio that a process should be improved, but the solutions offered by SAP do not allow to implement the improvement? When the process could be improved with a better notification to key users, or a better app to capture data needs to be developed?

The gaps are increasing. Older relapses, and that also includes the S/4HANA on premise customers, are left with none or just little AI driven end-to-end solutions. While in an on-premise scenario it is possible to go from process to key user, going further down is complicated. Using AI features means to go to SAP Rise and cloud. Customers need to go to SAP cloud to get a significant benefit from SAP’ AI. Customers must be fully committed to SAP Cloud and better to SAP’s SaaS solutions. If not, SAP’s AI announcements are nice, yet it is hard to benefit from them. Even for S/4HANA public cloud customers that use SaaS and BTP it is hard to get a significant benefit from SAP’s AI announcements. Is AI supported ADT? Can it be used to convert reports from an ECC system to RAP services? When a business analysis shows that a process can be improved by optimizing a data capture form, is this a one click action? Or if a custom app is identified as obsolete, can it be removed automatically and without disruption via AI?

The conclusion from both graphics is a simple: cloud is needed to profit from SAP’s AI announcements. It is not enough to be on S/4HANA or have gone through some upgrades lately.

Reality

SAP focuses on their future. The AI announcements are targeted at the happy customers. The ones that are already bought into SAP’s strategy. But what about the rest? It puzzles me to see that SAP is focusing on customers that already went through the work to get to cloud. First, depending on where their journey started, it is hard to believe that these still have enough resources left to continue investing as before. Second, these still represent only a fraction of the SAP customers. Not every customer is already in the SAP cloud. There are so many customers out there that are still on their journey, if they started at all. These are ignored by SAP. But why? Why not offer AI powered solutions to them? Why not offer a full set of AI supported tools to help those customers to get from ECC to S/4HANA? There are many things these customers do have in common: legacy systems, complex integrations, too much customizations, too many custom apps that can be replaced by standard apps. Why not focus on AI tools that help these customers to clean up their core, to move to S/4HANA? Isn’t it better to focus on real customer problems and demand than to say at keynotes: “Why don’t you move? Here is the case of another customer that spent millions in their S/4HANA transformation and that only did a system conversion. Don’t do that.”

Stop complaining about customers that struggle with their S/4HANA transformation. Stop mentioning that they spent money without benefitting from the features that come with S/4HANA. Why not provide the AI tools to migrate to S/4HANA and at the same time clean up the system, ensuring that they get the most out of S/4HANA? Why not use AI to sell the benefits of S/4HANA and BTP? A customer that saw first hand the benefit of AI and Cloud from SAP during their S/4HANA migration, that customer will stay with SAP. And buy more cloud services.

All I can see here is win-win situation.

Current reality: getting no help from SAP. And afterwards, there is still the problem of adopting BTP and getting value out of SAP’s cloud.