As enthusiasm for AI and generative AI mounts, creating a winning AI strategy to help reduce operating costs and increase efficiency is easily topping the priority list for IT executives.
There’s little question businesses are ready to reap the rewards of AI. Gartner projects that spending on AI software will grow to $297.9 billion by 2027, with overall market growth accelerating from 17.8% to 20.4% in the same timeframe. In particular, spending on generative AI will surge from 8% of all AI software spending in 2023 to 35% by 2027, Gartner predicts.1
No surprise then that SAP, along with other leading ERP vendors, is touting its AI capabilities. But many features — for example, the Joule AI copilot — are included only with the latest cloud solutions such as SAP S/4HANA Cloud and the RISE with SAP and GROW with SAP programs. Moreover, many current and future AI innovations will only be accessible with the premium plus package that incurs added fees.
While the SAP S/4HANA Cloud premium plus package advertises AI innovations, they aren’t a precise match for all enterprises, much less reflective of AI needs outside of the core SAP digital backbone. The fact is, there are other options to consider — ones that better leverage AI investments across the enterprise, bridging applications, databases and broad business processes. Further, they don’t involve costly upgrades.
“You don’t want to upgrade to SAP S/4HANA because AI is being dangled for the future,” says Scott Hays, senior director of product marketing at Rimini Street, a leading provider of third-party support programs for enterprise platforms like SAP. “You want to keep your options open to achieve innovation faster.”
An alternative approach to innovation
Rather than migrating to cloud platforms before there’s an ROI-based business justification, organizations are turning to third-party support by Rimini Street to keep their on-premises core ERP systems viable while accelerating innovation around the edges, particularly with AI.
“Marching to the vendor’s AI beat can lead you to getting trapped on an upgrade treadmill where the vendor holds its hand on the speed button,” says Hays. “You may end up spending more cycles and resources upgrading rather than innovating. You may wind up far behind the competition because all you’ve been focusing on is upgrading rather than putting your people, time and money to work where it matters most for the business.”
Nexen Corporation, a South Korea-based rubber products manufacturer, is one of Rimini Street’s SAP clients that has taken this strategy to heart — and is winning the AI game. Extending the life of its SAP ECC 6 platform by choosing Rimini Support™ for SAP, Nexen is taking the savings and team focus to new heights by investing in IoT and AI/ML projects for business growth.
For IT leaders looking to achieve the same type of success, Hays has a few recommendations:
- Take an enterprise-wide approach to AI data, processes and tools. The primary ingredient of impactful AI is data, and not all relevant data will be found in the ERP platform. Organizations need a broader data strategy to fuel AI, which includes embracing holistic data hygiene and governance strategies. “You want AI to act on behalf of the enterprise, not just capabilities in a single ERP system,” Hays says.
- Don’t count on a single vendor to deliver the AI capabilities you need. A plethora of AI tools are already on the market, from open-source options to capabilities offered by internet giants like Amazon, Google and Microsoft. Don’t restrict your options to what’s offered in a single vendor ecosystem or, worse, to promises of what’s to come. Such an approach is limiting and increases the likelihood that crucial capabilities may be implemented too late to deliver maximum business impact.
- Beware of escalating AI costs for data storage and computing power. AI has an insatiable appetite for data, which means computing and data storage costs can escalate rapidly. By abdicating those decisions to the ERP vendor, enterprises essentially give up control over their own IT landscape and ongoing operational costs. “You need to take full ownership of the data you choose to include in your AI applications,” Hays advises. “It’s important to make ROI-based decisions on an individual feature basis and have full control over where AI is used.”
To learn more about how Rimini Street can help you control your AI destiny, visit: https://www.riministreet.com/solutions/sap/
1 Gartner – Invest Implications: Forecast Analysis: Artificial Intelligence Software, 2023-2027, Worldwide, 9 November 2023 – ID G00805570
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