Redefining Resilience For The Age Of AI

Key Concepts

• Sustainable Adaptability: Moving beyond simply bouncing back from disruptions to actively thriving and growing stronger in an ever-evolving environment.
• Foresight, Flexibility, Forward Motion: The three key pillars for enterprise success in the current era of change.
• SAP Business Suite: An integrated suite of applications designed to manage core business processes, harmonizing data models and user experience.
• Software as a Service (SaaS): A cloud-based delivery model for software, offering greater flexibility and faster updates compared to on-premise solutions.
• Open Source: Leveraging community-driven development for software capabilities, recognizing its value and efficiency.
• Agentic AI: AI systems that can perform tasks autonomously and collaborate with other agents to achieve complex, end-to-end processes.
• Co-innovation: Collaborating with customers to develop next-generation software and AI use cases, often by industry.
• Data Layer: The shift in ERP focus from transactional processes to leveraging the data generated by these processes for insights and innovation.
• Intelligent Apps: Applications built on top of the data layer, utilizing AI and analytics to provide advanced business insights.

The Evolution of Enterprise Success: Beyond Resilience to Sustainable Adaptability

Pascal Bornet, host of "Beyond Resilience," introduces the series' focus on enterprise success and adaptability in an era of relentless change. He posits that traditional resilience, the ability to bounce back, is no longer sufficient; it's merely an "entry ticket." True success now requires foresight to anticipate, flexibility to adjust in real-time, and forward motion to grow stronger after disruption.

Jan Gilg's Perspective on SAP and Adaptability

Jan Gilg, President and Chief Revenue Officer for SAP, joins Pascal to discuss SAP's role in enabling this shift. Gilg highlights the profound transformation SAP has undergone, moving from on-premise software to a Software as a Service (SaaS) model. This shift has fundamentally altered how SAP develops and markets its software, with a strong emphasis on customer success. This means not just selling software but ensuring customers implement it quickly, derive value, and are satisfied with its performance, driven by faster feedback loops.

Gilg emphasizes that his background in building SAP's platform provides credibility when discussing its value proposition, focusing on the outcomes technology can drive rather than the technology itself.

Redefining Resilience in a Changing World

Both Pascal and Jan agree that the definition of resilience has evolved. It's no longer about returning to a pre-crisis "normal" because that normal no longer exists. Resilience has become a fundamental characteristic of every company. Gilg points to the example of resilient supply chains, which became a critical focus during COVID-19. The pursuit of cost optimization and efficiency had led to fragmented and fragile global supply chains. Resilience now necessitates the ability to adapt quickly, which is where flexibility in IT infrastructure and systems becomes crucial. Cloud solutions are essential in this regard, offering the agility that was lacking in inflexible, customized on-premise systems that could take months or years to change.

SAP's Platform for Foresight and Agility

In response to the prediction that the next decade will see as many changes and innovations as the last century, SAP's platform aims to help companies seize opportunities and mitigate risks. This is achieved through:

• Cloud-based Solutions (SaaS): Offering best practices for processes derived from SAP's experience with thousands of global customers. This eliminates the need for companies to reinvent standard processes, such as accounts payable or receivable, where differentiation is minimal.
• Data Leverage: Standardized processes generate data that can be aggregated (anonymously) across SAP's customer base. This data is then used to drive foresight, helping customers understand how to continuously optimize their operations.
• Automation: A core value proposition of ERP systems, further enhanced by standardized processes.

The Evolving Role of ERP: From Transactions to Data and Intelligence

Jan Gilg outlines SAP's vision for the future of ERP platforms, emphasizing a shift from a purely transactional process view to a focus on the data layer. As business processes become increasingly automated and standardized, the ERP system itself becomes almost invisible. Innovation, therefore, occurs on the layer above, where companies tap into the valuable data generated by these processes. This data provides insights into how businesses run globally, enabling the identification of key performance indicators (KPIs) and benchmarks for specific industries and geographies. This forms the foundation for intelligent apps that drive insights previously unavailable to companies.

The SAP Business Suite: Integrated Rooms for Information

The SAP Business Suite is described using the analogy of a hotel suite, where different "rooms" represent integrated applications for areas like procurement, finance, and supply chain management. The key is that these "doors are open" due to their integration, and the "rooms look pretty similar" due to harmonized data models and user experiences. This harmonization ensures a consistent and intuitive experience for users. The suite focuses on transforming raw data into information by providing semantic understanding, connecting elements like shipments to orders and financial postings. This allows for true visibility and the derivation of actionable insights.

Open Source and Openness as Drivers of Adaptability

Gilg recounts SAP's historical apprehension towards open source, which has transformed with the advent of cloud computing. He acknowledges the immense value of the power of community in open source development, recognizing that it's often more efficient to leverage existing open-source capabilities for platform-level expectations rather than building everything in-house.

Furthermore, SAP embraces openness in the cloud era, acknowledging that customers operate in heterogeneous environments and do not exclusively use SAP solutions. This necessitates adherence to open standards, protocols, and APIs. The emergence of AI and agentic technologies further elevates this need for openness.

Agentic AI: Orchestrating End-to-End Processes

The conversation delves into agentic AI, a significant shift in the software industry. While optimizing siloed use cases, like Western Sugar Corporation's 25% invoice processing time savings, is valuable, the real challenge lies in orchestrating end-to-end processes across multiple agents and systems. Gilg highlights the complexity of multi-dimensional tasks that impact various departments like supply chain and procurement.

SAP's advantage lies in its business suite architecture, where agents can communicate "out of the box" and hand over tasks along a process, enabling complete end-to-end execution. This contrasts with the potential chaos of multiple SaaS solutions, each with its own set of agents, struggling to interoperate. Agentic AI, by not being bound by organizational silos, promises a new era of intelligent operations and significant productivity gains.

Purposeful Technology Implementation and Co-innovation

Both Pascal and Jan stress the importance of using technology purposely to mitigate risks and achieve business objectives, rather than implementing it for its own sake. Many customers are modernizing their ERP estates by moving to the cloud, recognizing that this is not just a technology upgrade but an opportunity to rethink business processes and ensure flexibility for the future.

SAP actively engages in co-innovation with customers, a concept that has been amplified by AI. This involves developing software and AI use cases collaboratively, often by industry, leveraging the insights of leading players to build next-generation capabilities that benefit the broader industry.

SAP's Strategy for Sustainable Adaptability

SAP's strategy for embodying the shift towards foresight, flexibility, and forward motion includes:

• Strengthening the Partner Ecosystem: Fostering collaboration with technology partners.
• Staying Open to Technology: Embracing new advancements and integrating them strategically.
• Focusing on Core Strengths: Supporting end-to-end business processes in an integrated manner.
• Enhancing User Experience: Utilizing digital assistants and similar tools to make enterprise software more accessible and intuitive.

Key Takeaway: Technology as a North Star for Modernization

Jan Gilg's concluding message emphasizes that companies have a significant opportunity to modernize their IT environments and embrace technology to achieve leapfrogging productivity gains and insights. This should serve as the "north star" guiding decision-making, particularly for ERP modernization. This approach is more powerful, helps justify business cases and investments, and addresses the C-level pressure to "do more with less." Technology, at its current mature stage, is capable of driving this efficiency and should be at the forefront of every business case.