Presented by SAP
Sometimes two contradictory forces can be true at the same time.
In the past 20 years, we’ve seen an explosion of innovative new technologies for businesses but slowing business productivity growth. Between 1995 and 2005, productivity in the U.S. grew at 2.6%. But in the decades since 2005, it grew at just 1.4% — a drop of nearly 50%, according to McKinsey. And this happened during a time when the internet matured, smartphones and mobile apps became pervasive and there were big advancements in ERP technologies.
It is clear from the data that innovation alone doesn’t lead to broad-based productivity gains. And that is a problem because when businesses are more productive, everyone benefits. This is especially important to take note of right now as new data and business AI innovations are reaching the market with breakneck speed. But these innovations are also bringing more complexity. What really matters is how you use data and AI together. Clean and meaningful data is the foundation for relevant AI. At the center of this is ERP data.
Why is ERP data so valuable? Because it is structured, describes processes, and has a sematic meaning.
Examples include purchase orders, invoices, financial postings in a general ledger and supplier delivery schedules. ERP data has business semantics that connects individual data sets and that’s what makes it possible to truly understand how businesses run. When you add in industry-specific data — like energy prices, interest rates and consumer trends and preferences, it becomes even richer. Considering that over 80% of the business data generated in the world runs through an SAP system, this is knowledge that is unique to SAP. We know how businesses run best across any industry and geography.
Emerging AI applications as a force multiplier
The cloud has changed the game as how this data is accessible. On top of this data, a new class of AI-driven applications can be built that is relevant to a business and their industry and is useful through an intuitive user interface. That’s what creates a force multiplier for business productivity and business value. That’s exactly what SAP is focused on right now.
In the past few weeks, SAP has announced a series of data and AI innovations to make businesses more productive. This includes Joule for Developers, which is an AI-powered assistant that understands SAP’s development framework and empowers developers of all skill levels to be more productive, creative and proficient in accelerating ABAP, Java and JavaScript-based application development and automation. Last month, we announced our Business Data Cloud, as our solution to unify all SAP and third-party data for our customers, providing the trusted data foundation organizations need to make more impactful decisions. In combination with our partner DataBricks, BDC combines structured data with unstructured data such as customer feedback, industry trends, etc., leading to better decision making.
Unifying AI across the organization
The source that is generating the necessary operational data is the SAP Business Suite. It represents a comprehensive set of integrated applications that seamlessly connects every part of their business. And that really speaks to the elegance of the SAP system — that everything works together seamlessly and provides customers a 360 view on their business.
Think of it like an orchestra. Instead of individual musicians playing different instruments, an orchestra creates music and harmony because they play seamlessly together. In other words, the whole becomes greater than the sum of its parts. That’s what the SAP Business Suite does for business data.
A great example is KIND, which is the health and wellness division of Mars, Inc. Their recent growth created lots of complexity. They needed to rethink their decentralized ways of working. So they implemented SAP S/4HANA Cloud Public Edition as their new business technology foundation while partnering with implementation experts from Accenture. As a result, they can better access and leverage their ERP data in the public cloud, leading to operational efficiencies and better use of analytics to drive better decisions for efficient business operations.
It’s clear that the next wave of AI is agentic — agents or services that come as software. For example, think of a service to enter and process travel expenses. What is still needed is software that stores the data in a structured way, a system of record, etc. But what is changing is the user experience. In the case of SAP, our UX is Joule and it is becoming the orchestrator of services.
There isn’t a single business technology conversation today that doesn’t start and end with the impact of data and AI. But just like an orchestra, it can either be noise or music depending on how it all comes together. Companies that embrace an active approach of data management supercharged by generative AI will stay ahead of what’s coming next and create a blueprint for a new era of business productivity growth.
Jan Gilg is Chief Revenue Officer, Americas and SAP Global Business Suite.
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