Business AI Drives the Cloud ERP Future at Sapphire

⇨ Business AI capabilities available through AI assistant Joule is how SAP expects customers to use AI in the future.

⇨ Transformation as part of the move to RISE with SAP is central to this year's messaging.

⇨ SAPinsiders should ensure that they understand what SAP is changing and how they will integrate AI with core business solutions.

Over the past year, SAP has focused on integrating artificial intelligence (AI) to unify data from solutions across the enterprise. This started with generative AI assistant Joule’s announcement and was further developed through the AI Foundation in the SAP Business Technology Platform (BTP). This year, part of SAP restructuring has been to focus on bringing AI use cases to every solution in the SAP portfolio. At Sapphire 2024, SAP announced multiple new Business AI capabilities that will be integrated throughout SAP’s business applications. This starts with the AI copilot Joule.

Joule was announced in September 2023 and was initially integrated only with SAP SuccessFactors and SAP Start. Since then, Joule has become available in SAP S/4HANA Cloud Public Edition and SAP S/4HANA Cloud Private Edition, and other products including SAP Build, SAP Build Code, and SAP Integration Suite. SAP plans to make Joule available in SAP Ariba and SAP Analytics Cloud and in supply chain management offerings in the second half of 2024.

SAP’s goal has been to analyze the tasks most frequently performed by its end users, enabling Joule to help manage them and allowing users to execute the same tasks with increased productively and improved quality. According to CEO Christian Klein, by the end of 2024, up to eighty percent of the most used tasks will be managed by Joule, and Joule will be delivered “out of the box” to all cloud customers. SAP also plans to integrate Microsoft Copilot for Microsoft 365 with Joule, allowing users to access data across environments no matter which copilot is used.

SAP is differentiating itself by infusing business AI capabilities directly into workflows and processes, which eliminates the need for an additional layer that is typically required by other vendors for incorporating AI into their systems. Only SAP can natively integrate AI directly into the business processes. In achieving this goal, SAP already has 50 embedded use cases available with plans to double that number by the end of 2024. Klein emphasizes that the priority will be on use cases that will have the biggest impact on the bottom line.

SAP anticipates organizations primarily leveraging Joule for many AI use cases, a sentiment fortified by demonstrations across the Sapphire event which showed presenters using Joule for most tasks— from creating summaries of data sets to writing ABAP code. Additionally, SAP has loaded up to two hundred thousand pages of learning content and 2TB of community knowledge into Joule to help 4,000 internal consultants save up to 2 hours each day with tasks like retrieving best practices, project specific recommendations, and writing code. Joule is fast becoming SAP’s vehicle for the business AI future.

Transformation Using Cloud ERP

RISE with SAP may initially have been introduced as a transformation-as-a-service offering, but over the last two years, SAP has downplayed that messaging. This year there is again an increased emphasis on the benefits of transformation when moving to RISE with SAP. During the Sapphire event, it was repeatedly highlighted that customers who completed business and process transformation as part of the move to RISE with SAP are seeing greater benefits than those that have simply completed technical upgrades. When asked about the upcoming 2027 deadline and recommendations for customers that are concerned they are running out of time, Klein specifically said that the answer is RISE with SAP. Klein emphasized that customers moving to RISE with SAP have the opportunity to work with SAP to transition incrementally, one step at a time, rather than having to do everything at once.

Speaking broadly about RISE with SAP, Chief Revenue Officer Scott Russell highlighted that over 6,000 customers have already moved to the offering with more than 1,000 going live during the past year. Russell also emphasized that organizations that have moved to RISE with SAP are outperforming their peers by 7%, though he did not provide details on how that number was calculated. Thomas Saueressig, Executive Board Member for Customer Services and Delivery also highlighted a powerful statistic, stating that 25% of the world’s commerce already runs through customers that use RISE with SAP. This is over and above the more commonly quoted metric that 87% of the world’s business transactions touch an SAP system at some point.

While SAP did not disclose the specifics of these calculations, it is evident that SAP is placing a considerable emphasis on moving to cloud ERP in general, and RISE with SAP specifically. This was evident in the customer keynote which featured four stories highlighting the adoption of RISE with SAP or GROW with SAP. Much of the conversation from the stage emphasized the role of CIOs in leading transformations within their organizations, and the benefits that RISE with SAP offers in bringing together capabilities for business and process transformation.

What Does This Mean for SAPinsiders?

Sapphire is about the story that SAP wants to tell. Throughout the event, while SAP consistently acknowledged that each customer is unique and has their own approach to doing business, there was a strong emphasis on business AI embedded in core SAP solutions that are facilitating cloud transformation that organizations need for the future. While Klein assured analysts that “no customer will be left behind” in relation to the upcoming 2027 end of maintenance deadline, he followed up by saying “I would not recommend going down that track”. Klein reiterated that SAP’s continued focus will be on transitioning customers to cloud ERP.

What is becoming obvious is that there is an acceleration in cloud ERP adoption. In March this year, SAP’s President of Enterprise Cloud Services Peter Pluim highlighted that there were 5,500 RISE with SAP customers. The number is now over 6,000 according to Saueressig, with over 1,000 going live in the last 12 months. SAP is highlighting these numbers because they represent an acceleration in adoption and support SAP’s messaging around RISE with SAP as the way forward for customers. But for customers that are still on the fence, there has been little change in available options.

SAP continues to hope that embedded business AI across their solutions will provide benefits that will attract customers that have been reluctant in embracing the cloud. Whether or not the increased focus on AI is sufficient to start moving customer interest is unclear, but it is certain that business AI will be embedded in SAP solutions moving forward. This will be true for all applications connected to the ERP core in addition to those supporting integration and development like SAP BTP.

SAPinsiders should ensure that they thoroughly understand what SAP is changing from a product perspective, how they intend to integrate AI into the business core, and whether those capabilities will provide benefits in the future. This will be key to evaluating the benefits of adopting cloud ERP and the technology stack that will bring AI into every aspect of the business. While some of these benefits may be obvious today, others are still to be identified, but SAP will keep focusing on how business AI will drive a future that is powered by cloud ERP.