SUGEN Digest 2023

I början av 2023 fokuserade SUGEN på initiativet "Guide to Growth", där användargrupper ställs inför nya utmaningar som att anpassa sig till molnbaserad strategi och öka engagemanget för verksamhetsinriktade människor. I utdraget från SUGEN Digest nedan sammanfattar Gianmaria Perancin, ordförande i SUGEN, deras möten mellan april och juni 2023 och diskussionerna som omfattade både geopolitiska förändringar och globala kriser. Det fysiska mötet i Heidelberg AppHaus med SAP:s VD Christian Klein men även det virtuella mötet med Thomas Saueressig, styrelsemedlem i SAP, markerade viktiga steg. Diskussionerna om SAP:s framtid, molnstrategi och artificiell intelligens bidrog också till att forma riktningen för medlemmarna. Trevlig läsning!

While closing S1/2023, we find SUGEN working on a new initiative called "Guide to Growth". Indeed, our User Groups are facing new challenges, and they have to pave their way for the future. How to educate members with the Cloud approach that SAP intends to apply, how to have more implication of LOB people, how to finalize the transformation to a new model after the 2020 and 2021 health crisis... in a world where geopolitics are completely shuffled and we are all experiencing world crisis that only ¾ years ago, we did not even think we could live in? Inflation is coming back with higher ratios than in the past, and technology also has to cope with all the new tensions arriving in different parts of the world.

These topics were also the unofficial red thread of our F2F that stretched between April and June 2023, with a lot of exchanges in person, when we met in the Heidelberg AppHaus in the beginning of spring and especially the one with Christian Klein, but also with a very deep and interesting virtual F2F with Thomas Saueressig beginning of summer, that somehow closed this cycle.

And while Christian clearly outlined how SAP foresees the future with a lot of cloud coupled with the impacts out of political tensions here and there around the globe, Thomas provided valuable insights on Artificial Intelligence and the questions of ethics behind it. In the middle, between these two moments, we lived SAPPHIRE, with its announcements about Green Ledger, Business Network and SAP leveraging AI.

If we look at the path we have walked out in these last 6 months, we have to admit the world is changing extremely fast. SAP world and ecosystem are also changing very fast: but as SUGEN members, we have the capacity and the will to influence it. Our members are asking this from us, and we will deliver this service to them.

Let's keep our momentum, and let's go more and more forward.

Executive Exchange with CEO Christian Klein – April 18

One of the main SUGEN ambitions is to be able to maintain a constructive and transparent dialogue with top SAP Executives: a dialogue that really goes in both directions, naturally from SAP to SUGEN members, but especially in the other direction, from SUGEN to SAP Top Management. Listening to SUGEN feedbacks, should be a way for SAP to continuously improve their solutions, their services and their approach to the market.

So, when SUGEN meets Christian Klein, SAP CEO and Member of the Executive Board of SAP SE, this is the realization of this main target.

In our last SUGEN F2F, Christian gave us the honour to kick off our exchanges between SUGEN and SAP Executives during the first in-person meeting in 2023.

SUGEN audience listened very carefully to the strategy that Christian described for SAP in the long term, as it was matter about what will be awaiting the SAP ecosystem in the upcoming months and even years. Christian did not spare any information and the exchange was very lively as usual due to the open and trusted relationship. Christian shared not just the strategic priorities for SAP and its customers but also touched the impact of geopolitical tensions on the global economy including how SAP helps its customers to grow under these challenging circumstances.

Christian was extremely clear, as he stressed loud and clear how the agility of cloud solutions remains one of the key priorities to address customers ́ needs. This was the very first time where SUGEN members could have SAP speak so straightforward about its cloud strategy, and especially the reasons behind it. We could even argue that an official statement would have not been so clear, compared to what Christian Klein shared with us all.

At the same time, it happens that many companies expect a strong impact by the still on- going international turmoil and high risks in supply chain disruption. The main point is that companies must rely on high-performance services, able to adapt and react in a very short glance. For this, we recognized that SAP had helped transforming the IT ecosystem, by giving it more and more agility: Christian reiterated that SAP would help its customers to face future challenges and support them into becoming resilient and intelligently run enterprises.

In the meantime, as many companies are reviewing their legal frameworks with regards to data storage and security compliance, SAP needs to keep a role of key-player in the sovereign cloud initiative to address future legal requirements.

Christian continued the discussion with a preview of technological advancements happening in regenerative AI like ChatGPT. SAP has announced several use cases within its portfolio at Sapphire. But the important topic here is that SAP considers AI as a focus topic for the near future, as it can really help companies to complete transformation and be able to cope with the new challenges out of the market.

With the ambition to become the number 1 enterprise application company in the cloud, the adoption of SAP S/4HANA public cloud will be, obviously, the key accelerator. With GROW with SAP, SAP supports new customers to begin their business transformation journey into the public cloud. Together with partners, SAP will drive the provisioning of localized content. For existing customers SAP has another well-known and proven offer:
SAP ECC to the new SAP S/4HANA private cloud edition. It is also important to consider that for little companies, Christian paved the way with SAP Business One, and clearly stated that there are ambitions for having one common data model between SAP BusinessOne and SAP S/4HANA, so to sustain transitions for those companies who start little and grow fast.

As part of its transformation, SAP is also looking more and more into new consumption based commercial models. This is an important step to give SAP ́s customers the flexibility they need to run their business at scale. Still, SAP ́s transformation goes far beyond just the move to the cloud and some new commercial models: it also affects the whole SAP ecosystem. An important tool to connect SAP applications with each other as well as other third-party systems is SAP Datasphere, which is a unified data layer and a decisive factor for the adoption of SAP's solutions.

Even though SAP is supporting all customers to move to the cloud and leverage the advantages of this new technology, Christian reassured the SUGEN members that nobody would be left behind or forced to the cloud. This is a point stressed by SUGEN members, who see a number of the users they represent still attached to the on-premise world, with a slow transition to the cloud, at least for the ERP world. This is underlined by SAP's commitment to maintain all SAP S/4HANA OnPrem systems till 2040. Furthermore, he stated hybrid landscapes would remain the most common model for the installed base in the next decade.

Executive Exchange on SAP Product Engineering – June 30

Thomas Saueressig, member of the Executive Board of SAP SE leading SAP Product Engineering, shared with the SUGEN members that SAP's strategy is going into the right direction and should come to fruition in the next years. The feedbacks that customers and analysts send to SAP are positive, and good foundations have been achieved: However there is still a lot of work to do, in order to make results more relevant. The company is still paving the way to become a cloud company, and in parallel it has now also the ambition to evolve into a business AI company. SAP's vision is centered around creating self-automating business systems and achieving continuous process improvement through the power of AI.

The AI strategy at SAP permeates across all parts of the organization, aligning with the company's ambitious goals. Thomas Saueressig recognized the significance of incorporating AI into all future cases and plans to develop built-in AI models specifically tailored for its cloud customers.

The integration of AI with business data is a key focus for SAP, as it aims to deliver more relevant results and leverage AI for the benefit of its customers. However, SAP acknowledges that for AI to be successful, it must be relevant, reliable, and responsible.

Excitingly, SAP has identified numerous AI use cases besides the cases already showcased at SAPPHIRE, with the first ones expected to be available in the third and fourth quarters of the year. These initial cases will focus on areas such as transportation and procurement. SAP envisions an ongoing pipeline of AI use cases, with ideation of opening up to the user groups after the successful execution of the initial business cases.

To ensure optimal performance, Thomas Saueressig stressed that SAP aims to leverage the best technology available for each use case. This includes utilizing multiple different language models from various providers, such as OpenAI, Aleph Alpha, IBM, and Google. Each model yields different results depending on the specific use case, and SAP strives to make the most of these capabilities. The architecture is designed to utilize the SAP Business Technology Platform (BTP) plugging into a Large Language Model (LLM). Thomas Saueressig recognizes that LLM costs are important as per today: but he is also convinced that they could go lower in the future: SAP will strongly follow the trends around this topic and see how it evolves in the next years.

It is worth noting that SAP does not use a ChatGPT public model but has decided to rely on a private GPT form model, to avoid leaking information public through the global model and therefore keep knowledge assets under control and protected. While protective measures are in place, the quality of answers may be slightly lower, and responses may not sound perfect: but Thomas Saueressig finds that this is a compromise we have to accept, and SUGEN member completely agree with him on this.

SAP's AI capabilities are further enhanced through the SAP Business Technology Platform AI core, an integration layer that seamlessly combines AI with the SAP S/4HANA Cloud, whether it is private or public. The SAP Business Technology Platform AI core comes with pre-trained models, which can be fine-tuned in collaboration with customers, ensuring optimal performance for specific use cases.

According to Thomas Saueressig, the current state of SAP's AI transformation presents an exciting time for the IT industry. The next few years promise to bring innovative advancements and groundbreaking developments in the realm of AI. With a focus on reliability, trustworthiness, and responsible implementation, SAP aims to revolutionize the business landscape through the power of AI.

SUGEN and Thomas Saueressig had also a final exchange about the role of SAP towards governments and European governance bodies: Thomas confirmed that SAP is strongly committed in working with the key EU actors, and to keep SAP strong influence while EU is promoting new regulations such as the European Artificial Intelligence Act, so to ensure applicability of the future legislation on such topics, in the interest of the companies and the customers.

Gianmaria Perancin