1. Introduction

At the recent SAP Sapphire 2023 conference in Orlando, SAP made several announcements showcasing its responsible AI, sustainability and “empowering customers to navigate complex challenges and transformations” in the cloud era.

In this article, SAP says it wants to help customers transform business models in the cloud, achieve greater visibility around sustainability and bolster Supply chain resilience. While AI algorithms have been around since the 1960s, it took decades to make the training and inference of these models affordable for everyone except national security agencies. Today, AI and machine learning permeates many of the applications we use today.

Foundational models offer new applications for text, programming, numbers, images and videos that results more what everybody thought of when we thought of “AI.” With tech company fortunes ebbing and flowing on how investors and customers see vendors applying AI, SAP wanted, understandable, to lean into AI more than it naturally would.

Integration of AI capabilities across ERP:

The SAP S/4HANA cloud will now include SAP's AI capabilities. The new features include SAP AI Business Services, which will assist finance teams in controlling costs and reducing risk by quickly identifying and responding to changes in customer sentiment. Sales teams could benefit from the automation of sales order functions, streamlining order processing by eliminating manual data entry.

Spend management software and the SAP Business Network will now leverage AI to better help procurement professionals navigate market dynamics, engage with suppliers and enforce compliance. Features such as intelligent invoice conversion and AI-powered guided buying in SAP Ariba Buying will simplify procurement processes.

SAP will embed AI into industry-specific solutions as well. For instance, SAP Predictive Replenishment will use AI to optimize inventory management by automatically calculating and ordering products. Sales teams can also utilize SAP Intelligent Product Recommendations, which suggests optimal product configurations based on AI-driven sales data analysis.

Ledger-based accounting for carbon tracking:

There is a growing need to track, measure, monitor, and report on carbon emissions. SAP is extending its ERP software's definition of resources to include carbon, thus introducing the green ledger initiative. This initiative allows companies to manage carbon emissions with the same transparency and reliability as financial data. SAP is also updating its Sustainability Footprint. Management solution and introducing the Sustainability Data Exchange application to facilitate the exchange of standardized sustainability data with partners and suppliers.

Industry-specific networks to enhance Supply chain resilience:

SAP also announced the SAP Business Network for Industry, which enables customers in specific industries to improve and extend key business processes with trading partners.

SAP Business Network for Industry targets common supply chain collaboration use cases in specific industries. These industry-specific use cases are paired with industry best practices and are all prepackaged for quick implementation and ready use. Today's focus sectors are consumer products, high-tech, industrial manufacturing and life sciences with more to come.

AI enhance SAP's Human Experience Management:

The portfolio by streamlining human resources management. SAP SuccessFactors will leverage AI to understand the workforce's skills, allowing HR teams to provide continuous development opportunities and align employees to support the company better. The SAP SuccessFactors talent intelligence hub will offer employees a foundation to build and maintain a skills portfolio, with AI assisting them in showcasing skills and providing personalized recommendations for career paths, training projects and mentors.

Considering the booming interest in AI and particularly generative AI applications, SAP's announcements could not be timelier. SAP customers should sleep well knowing that SAP is planning to leverage generative AI across the ERP suite in ways that are relevant to business needs, designed responsibly and aligned with ethical standards.

2. Literature Review

In today’s rapidly evolving digital landscape, companies are embracing innovative technologies to streamline operations, enhance productivity, and gain a competitive edge. One such technology that is transforming industries across the globe is Artificial Intelligence (AI).

SAP, a leading provider of enterprise software solutions, recognizes the potential of AI and has been actively integrating it into its platform to help businesses achieve their digital transformation goals. Microsoft and Google Cloud, announced cutting-edge collaborations with SAP in the realm of AI and Data, respectively, this is a historic moment. The world of generative AI has taken the imagination of consumers and enterprises alike by storm.

What customers are achieving with SAP solutions and cloud services for AI:

AI is quite new in SAP but still have many examples set of its success and there are many client stories.

# The finance ministry of the city state of Hamburg was entrusted with creating a cultural aid-application platform for artists who were negatively impacted by the COVID-19 pandemic restrictions throughout Germany. SAP Business Technology Platform along with several integrated solutions and advanced technologies made this possible within a very short time frame. AI based decision support and highly automated process to evaluate government aid applications by 2.7 million documents automatically evaluated and classified.

# There is one more successful AI example of Villeroy & Boch Group: Improving Operational Efficiency Using Digital Assistants and Intelligent Bots. With a rich heritage that dates back to 1748, Villeroy & Boch Group is one of Europe’s oldest brands. Sold to customers in 125 countries, its premium bathroom ceramics and tableware combine timeless style with innovative design. To optimize productivity, the company needed its processes to be as efficient as possible and wanted to reduce time spent on repetitive tasks. By harnessing the latest intelligent robotic process automation and artificial intelligence technologies, the manufacturer has developed automation bots to carry out routine, low-value tasks and make SAP ERP processes intelligent. This is enabling improvements in operational efficiency and frees up staff to spend time on non-routine and higher-value activities.

# According to the Director of HR, Telefonica “With support from SAP, we have been able to extend the functionality in SAP SuccessFactors solutions to create an innovative solution that helps employees identify and develop the skills that will be vital in the digital world and the future of our company”. With the help of this automated process 91.5% of employees use the reskilling applications and 77% of talent profiles completed, enabling intelligent matching of candidates to positions.

# Other best example is Nestle with 275000 employees worldwide have a single point of entry to all SAP applications. One of the first areas of Nestlé’s digital transformation was the transformation of HR systems. The company used SAP SuccessFactors to standardize and automate HR processes that support everything from recruitment to retirement. Nestlé also uses SAP Business Technology Platform (SAP BTP) to develop custom extensions of SAP SuccessFactors for situations such as high-volume hiring during seasonal surges. By creating a hiring application that allows for batch handling and validation of employment data, Nestlé speed up the hiring process and made it much less cumbersome. Additionally, Nestlé now has a chatbot that speaks over 20 languages and answers simple and common questions from thousands of candidates each week without input (interactions) from HR professionals, providing a more seamless experience to the candidates and allowing the Nestlé team to focus on other work.

3. AI (Artificial Intelligence) Foundation in SAP

AI Foundation is SAP’s all-in-one AI toolkit, offering developers AI that’s ready-to-use, customizable, grounded in business data, and supported by leading generative AI foundation models.

SAP Business Technology Platform (SAP BTP) brings together application development, data and analytics, integration, and AI capabilities into one unified environment optimized for SAP applications. SAP BTP is the technological foundation for all SAP applications and Intelligent Enterprise.

At SAP, AI delivery that is available from day one, as it is already built into the SAP applications that power the most critical business processes. It works for an entire business because it is developed using extensive industry-specific data and deep process knowledge. Organizations can use it with confidence, as it is created using responsible AI practices. In essence, SAP AI is AI built for business.

At SAP Sapphire 2023, they announced 15 new business AI capabilities, many powered by generative AI. They have also expanded their partnership with Microsoft on generative AI.

Let’s have a closer look at a few of these new capabilities.

3.1. Strengthening Human Capital Management

A company’s greatest asset is its workforce. SAP’s focus for human capital management (HCM) is to use AI to help organizations attract, retain, and skill their employees. New generative AI capabilities in SAP SuccessFactors Recruiting enable hiring managers to create compelling and accurate job descriptions that capture the desired skills and attributes of each role. Integration with Microsoft 365 Copilot in Word allows them to fine-tune further and then seamlessly publish back in SAP SuccessFactors software. Generative AI capabilities in the SAP SuccessFactors solution also generates interview questions tailored to specific job descriptions and candidates’ resumes, helping ensure inclusive language. The combined effect of these business AI capabilities saves hiring managers precious time and improves interview quality, maximizing the effectiveness of the hiring process.

3.2. Growing Supply Chain Resilience

In supply chain, SAP using AI to help predict, prepare, and respond to rapidly evolving demands. New generative AI capabilities in SAP Transportation Management enable automotive and manufacturing companies to automatically process the tens of thousands of deliveries notes they receive daily in different formats. The automation avoids data entry errors and works out of the box without requiring curated training data. Additionally, in SAP Extended Warehouse Management are introducing an intelligent slotting capability that uses AI to suggest how to optimize warehouse organization, stocking, and replenishment based on a product’s characteristics, demand, or forecasts. This capability helps maximize warehouse space and increase the efficiency of warehouse management.

Users can take advantage of the intelligent slotting capability today; intelligent goods receipt is planned for availability later this year.

3.3. Increasing Efficiency and Compliance in Procurement

In procurement, SAP using AI to help users contain costs and increase compliance across different markets. The new intelligent invoice conversion capability in SAP Business Network makes it easier for procurement teams to onboard new suppliers by automatically extracting and processing relevant information from supplier invoices. A close feedback loop improves the mapping accuracy over time, further expediting invoice processing and accuracy.

SAP also using AI to enhance the employee purchase experience with personalized recommendations in SAP Ariba Buying. The guided buying capability uses data, such as employees’ roles, to suggest products and services chosen by peers and other pertinent products from the company catalog to improve the buying experience and curb maverick spend.

The guided buying capability in SAP Ariba Buying is available today; the intelligent invoice conversion on SAP Business Network is planned for availability later this year.

3.4. Reducing Risks and Controlling Costs in Finance

In finance, SAP using AI to transform all finance operations with insights, recommendations, and automation. The new intelligent collections in SAP S/4HANA helps collection specialists forecast the risk of a late payment on an invoice and better prioritize which customers require follow up. This not only streamlines an extremely time-consuming task, but also simplifies risk management and makes it easier for corporate treasury to manage liquidity and capital levels.

3.5. Improving Employee & Customer Experience

SAP Digital Assistant provides a unified natural language interface for SAP solutions. SAP adding new generative AI capabilities to provide users with tailored assistance based on their context, helping new and experienced users be more productive with the tasks at hand. SAP Digital Assistant is also expanding its capabilities to provide users with proactive and contextual assistance inside their applications, starting with SAP Customer Experience solutions. With the new SAP Digital Assistant for customer experience, sellers and support teams can easily get holistic insights, create recommendations, and automatically generate content to personalize customer experiences.

3.6. Increasing Agility and Foresight Across Your Business

We have covered just a few of the many business AI capabilities which are announcing at SAP Sapphire 2023. The figure below summarizes all of them including the ones that bring value to several business functions, such as generative AI scenarios in SAP Analytics Cloud and SAP Signavio Process Manager.

3.7. New AI Capabilities

Figure 1

4. What is SAP BTP (Business Technology Platform)

SAP BTP is a platform built with flexibility and choice in mind can help to connect people and plans to take enterprise planning to the next level. SAP Business Technology Platform (SAP BTP) comprises solutions spanning data and analytics, application development and automation, integration, enterprise planning, and artificial intelligence technologies.

4.1. SAP BTP Solutions with Built in AI

Empowering the IT teams to extend SAP solutions with AI capabilities on SAP Business Technology Platform (SAP BTP), and drive faster, better decision-making throughout the organization by implementing supporting tools such as:

4.1.1. SAP Build Code

SAP Build Code, Generative AI-based code development with Joule copilot, optimized for Java and JavaScript application development, providing a turn-key environment for coding, testing, integrations, and application lifecycle management.

In 2024, SAP taking a giant step forward to empower developers. SAP is excited to announce SAP Build Code, an application development solution that draws on the power of SAP’s new generative AI copilot Joule by embedding AI-based code generation to create data models, app logic, and test scripts. A true game-changer for all SAP developers, SAP Build Code offers a turn-key environment for coding, testing, integrating, and managing Java and JavaScript application life cycles by bringing together key design and runtime services and tools in a single offering.

SAP Build Code includes pre-built integrations, APIs, and connectors to SAP and non-SAP systems, guided templates, and built-in SAP developer best practices to accelerate development. SAP Build Code enables fusion development, so developers can innovate faster by collaborating with other developers and business experts.

4.1.2. SAP HANA Cloud

SAP HANA Cloud is a multi-model database management system that empowers the architects of the future to build and deploy the next generation of intelligent data applications at scale. SAP Build Process Automation.

Data is the heart of the intelligent enterprise and data volumes and diversity increase daily. A cloud-native database solution, SAP HANA® Cloud was built for flexible and efficient data and analytics management. Such advanced technologies as embedded machine learning and integrated data tiering support enhanced services, scalability, and security that foster intelligent data applications and trusted performance at an optimal cost-performance ratio.

SAP HANA Cloud is a database-as-a-service (DBaaS) that delivers a single view of your entire data landscape. It is an all-in-one solution that underpins modern applications and analytics sturdily and cost-effectively. As the cloud-based data foundation for SAP Business Technology Platform, it orchestrates mission-critical applications and analytics across all enterprise data in one complete solution. SAP HANA Cloud seamlessly blends smart multi-model data to power intelligent data applications. Integrated multitier storage helps you manage data more efficiently and lower your total cost of operations (TCO). SAP HANA Cloud federates data from your full landscape, including your on-premise and cloud applications and third-party sources. While protecting data with a holistic security framework that includes data anonymization, SAP HANA Cloud provides top-notch analytics performance for all your enterprise data, no matter where it resides.

4.1.3. SAP Build Process Automation

SAP Build Process Automation combines Workflow management, RPA functionality, Decision management, Process visibility, and Embedded AI capabilities into one intuitive low-code experience.

Workflow Management

Enable users to create forms, manage decision logic, and build, adapt, and organize process flows with the simplicity of drag-and-drop functionality.

Robotic Process Automation (RPA)

Automate repetitive manual tasks such as copy-and-paste operations, data extraction, data entry, and data creation using no-code and low-code capabilities or the built-in automation recorder.

Embedded Artificial Intelligence (AI)

Access built-in AI capabilities for intelligent document processing without needing data scientist support.

4.1.4. SAP Datasphere

SAP Datasphere, the next generation of SAP Data Warehouse Cloud, is a comprehensive data service that enables every data professional to deliver seamless and scalable access to mission-critical business data.

Deliver meaningful data to every data professional:

Access authoritative data: Accelerate your time-to-value by automatically reusing the semantical definitions and associations from SAP applications.

Enrich all data projects: Harmonize heterogeneous data into a business semantic model of your diverse data landscape.

Simplify the data landscape: Access all your data across hybrid and cloud environments no matter where it resides.

SAP Datasphere enables a powerful open data ecosystem such as Collibra, Confluent, Databricks, DataRobot and Google Cloud.

SAP Datasphere and its open data ecosystem is the foundation for a business data fabric. It equips any organization to deliver meaningful data to every data consumer — with business context and logic intact.

4.2. How Customers are Already Succeeding with SAP Datasphere?

As per the CIO, Messer “The business data fabric architecture enables us to bring SAP and non-SAP data together in the seamless and self-service the way it has been envisioning. SAP Datasphere provided a solution to build a harmonized layer, or business data fabric, across SAP and non-SAP, cloud or on-premise data sources, making the best use of our existing investments in SAP, Microsoft Azure, Salesforce, and Oracle”.

SAP Datasphere is a comprehensive data solution that can enable every data professional to deliver seamless and scalable access to mission-critical business data. It can provide a unified experience for data integration, data cataloging, semantic modeling, data warehousing, data federation, and data virtualization.

In a recent review, a TrustRadius customer described SAP Datasphere as “elegant and robust.” They went on to say that SAP is “excellent at ensuring data integrity by eliminating duplications” and that SAP Datasphere can “handle large volumes of data at ease [and] the efficiency of data virtualization makes modeling easy.”

Figure 2

5. Migrate to Cloud Solutions with SAP BTP

SAP BTP enables to innovate in new ways by adopting a cloud operations-based model on infrastructure as a service (IaaS) technology and transformation opportunities with fully managed platform as a service (PaaS) offering.

SAP BTP provides the flexibility and independence of need by delivering technology to move assets to the cloud, integrate the IT landscape, and configure and extend SAP and third-party applications.

- Connected business processes

- Multi-cloud openness

- Fast time to value

- Extensive partner ecosystem

5.1. Why Migrate to Cloud Solutions and SAP BTP?

SAP Business Technology Platform (SAP BTP) provides flexibility and independence in the cloud.

Connected Business processes

Optimize processes that cross lines of business and achieve competitive differentiation with SAP BTP embedded in SAP applications.

Multi-Cloud openness

Run SAP solutions in any hyperscaler cloud environment for flexibility and consumer choice.

Fast Time to Market

Go live quickly, reduce the payback period, and monetize investments.

Extensive Partner Ecosystem

Choose from 15,000 partners across 25 industries to meet the needs of your business.

Future-proofed business

Innovate in new ways by adopting a cloud operations-based model on infrastructure-as-a-service (IaaS) technologies.

Tailored transformation

Take advantage of opportunities with fully managed platform-as-a-service (PaaS) offerings to meet unique business needs and requirements, no matter if it's in the cloud or a hybrid scenario.

5.2. Migrate to on-Premise SAP Technology Solutions to the Cloud

Choose the cloud migration journey and start as per defined pathway.

- Move SAP Process Orchestration to the cloud

- Move SAP BusinessObjects BI to the cloud

- Move to SAP Datasphere

- Move from SAP Business Planning and consolidation to SAP Analytics Cloud

- Migrate from on-premise SAP HANA database to SAP HANA Cloud

- Move your ABAP skills and assets to the Cloud

Cloud migration and transformation is a continuous process with opportunities for innovation and flexibility at every stage. RISE with SAP is a holistic business-transformation-as-a-service package that helps change the mindset of any kind of business, redesign business processes, and reduce internal complexity.

This offering ultimately enables to adopt new business models and stay ahead of in competition. Complement, extend, and integrate with any other solution (SAP, partners, or third parties) and use the data model and business services on SAP BTP to connect it all. As part of the RISE with SAP offering, can drive the innovation faster with SAP BTP to fast-track your move to SAP S/4HANA Cloud and support faster, cohesive, and future-ready innovation.

6. What are the Benefits of SAP Artificial Intelligence?

Following are some of the key benefits of SAP Artificial Intelligence solutions-

Real-time Decisions

SAP AI solutions provide intelligent insights and analytics that enable data-driven decision-making. Businesses can uncover valuable patterns, trends, and correlations within their data by leveraging ML and predictive analytics.

Automation Advantage

SAP AI solutions automate repetitive and mundane tasks, increasing operational efficiency and freeing up employees to focus on more valuable and strategic activities. Through automation, businesses can streamline processes, reduce errors, and achieve more productivity.

Enhanced Experience

Businesses can deliver personalized and tailored experiences to their customers. AI-powered chatbots and virtual assistants can provide 24x7 support, resolving customer queries in real time. This leads to improved customer satisfaction, loyalty, and ultimate growth.

Optimized Management

AI-driven ERP software can help businesses optimize their resource allocation and utilization. By analyzing data and patterns, businesses can better forecast demand, manage inventory, and allocate resources efficiently, leading to cost savings and improved resource planning.

Enhanced Security

AI solutions from SAP contribute to improve cybersecurity and risk management. AI-powered algorithms can detect and prevent security breaches. They can identify anomalies in real-time, and proactively mitigate risks. This helps businesses protect their confidential information.

Competitive Edge

SAP AI solutions enable businesses to innovate and stay ahead of the competition. By leveraging AI technologies, such as natural Language processing and Machine learning, businesses can develop new products, optimize processes, and identify untapped market opportunities.

7. How to Leverage SAP AI to Increase Efficiency & Productivity?

Companies, irrespective of their business models and sizes, can leverage SAP AI solutions for increasing efficiency and productivity. Here we mention some of the top ways to gain the business benefits of SAP AI Business Services.

Repetitive Task Automation

AI solutions from SAP can automate repetitive and rule-based tasks that consume significant time and resources. By automating these tasks, employees can focus on more value-added activities, leading to improved productivity and efficiency.

Effective Resource Allocation

SAP AI solutions can help companies determine the optimal allocation of staff, equipment, and materials by analyzing data. It further leads companies to improve efficiency and productivity in various business processes.

Intelligent Insights in Real-time

SAP AI solutions provide intelligent insights in real-time by leveraging machine learning algorithms. Companies can extract valuable insights from large volumes of data, enabling better decision-making across various functions, such as sales, marketing, and finance.

Accurate Demand Forecasting

SAP AI Business Services can analyze historical and real-time data to forecast demand accurately. By leveraging these insights, companies can optimize Inventory management, Production planning, Supply chain operations and Human resource services.

Personalized Customer Experience

SAP AI enables businesses to personalize customer experiences by analyzing customer data and behavior. By leveraging AI-driven insights, companies can deliver tailored recommendations, personalized offers, and targeted marketing campaigns.

Streamlined Business Processes

You can streamline business processes by automating workflows, eliminating manual interventions, and reducing errors. Such streamlined workflows can pave the way to growth for your company in the future.

An example of a reference architecture for integrating AI Business Services

Figure 3

8. Latest SAP Announcement about AI Capabilities

A top provider of cloud-based enterprise resource planning software, said it’s expanding its generative Artificial Intelligence push with a host of new capabilities available now within its portfolio of customer experience tools.

The new capabilities are delivered via an upgrade to SAP’s natural language Generative AI copilot Joule. They’re designed to automate time-consuming tasks while providing actionable insights that will allow companies to create more intelligent and personal experiences for customers.

The company first revealed its ambitions for generative AI in May 2023 when it announced a suite of AI tools for its main ERP software suite at its Sapphire Now conference. It followed up by announcing its AI copilot Joule which can be thought of as an assistant that can generate proactive and contextualized insights by rapidly sorting through the tons of data held in both SAP’s systems and also third-party sources. This is a key differentiator, SAP says, because most other generative AI models can only draw on the data found in a single, siloed system.

President and Chief Product Officer Ritu Bhargava said the newest updates announced to build on those earlier services, and are all about putting customers at the center of business transformation to deliver superior, personalized experiences. “These new AI capabilities within the SAP CX portfolio will allow businesses to unlock their full potential, improve customer loyalty, solidify themselves as industry leaders and reap the benefits of generative AI with intelligent CX solutions that have a tangible impact on businesses”.

SAP also detailed a new Intelligent Q&A feature that can help to identify and answer customer questions.

Moreover, the SAP Customer Data Platform can now generate profiles that provide a more complete, 360-degree view of each customer. So, whenever the customer makes contact, the customer service representative will be able to provide a more personalized service and get to the root of their issue more quickly.

9. Conclusions

The aim of implementing AI in SAP is to make the user’s experience easier and simplify business interactions. Business leaders are exploring AI adoption in different departments due to its ability to facilitate processes and handle time consuming issues. SAP software which allows connection and collaboration across business departments can benefit from conversational AI capabilities.

According to Chatbot / conversational stats, 31% of executives said that virtual assistants have the largest impact on their business. Additionally, 75-90% of queries are projected to be handled by chatbots by 2023. This data suggests that SAP software will depend on AI heavily across multiple SAP business models in the future.

Furthermore, implementing RPA along with conversational AI into SAP applications can drive the automation process in enterprise resource planning to the point where the user will only have to ask the chatbot what the next step is, and have the RPA bot take care of it.

The growth of AI goes hand-in-hand with the global transition to the cloud, and it is changing SAP services for the better. Those who delay implementing cloud deployments of their business processes will also be missing out on the power of Artificial Intelligence.