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Riled by SAP’s AI policy, customers issue list of demands

Many SAP customers are still looking for the transformation melody that suits them. This was once again made clear at this year’s annual congress of the German-speaking SAP user group (DSAG), which the organizers held under the motto “Triad of the future: users, SAP, and partners as the pacesetters of transformation.” But there can be no talk of sweet music from this trio. Discordant notes clearly disturb the harmony between SAP and its customers. 

Half of the SAP customers surveyed still say they have not made much progress with their own digital transformation. As a result, just one in 10 say they have been able to keep up with the speed of change on a technical, social, and economic level; 59% said they have been able to keep up somewhat; and almost a quarter are not only out of step with the pace of transformation but have already fallen behind. 

Innovative capabilities could help close these gaps. But, customers note, access to those capabilities from SAP still doesn’t appear to be coming in the form necessary to help them.

Customers seek a hybrid future

It’s unclear to what extent SAP can help customers with their digital transformations given its strict cloud strategy. No one at DSAG disputes that the cloud is a key driver of business transformation. “From DSAG’s point of view, cloud and cloud enterprise resource planning systems are the right way to go for many use cases and industries,” said DSAG CEO Jens Hungerhausen. 

But from DSAG’s point of view, on-premises systems will also remain highly relevant for SAP customers for some time to come, DSAG’s leader made clear. This applies, for example, to industries with high process complexity, or under specific legal or data protection framework conditions or requirements. “The future will therefore continue to be hybrid,” Jens Hungershausen is convinced. “Simply jumping into the cloud doesn’t work.”

As for that future, SAP users still have many questions. For example, to what extent can they make use of the added value and flexibility of the cloud? They must also have greater clarity on the costs associated with increased cloud usage and what could be incurred through use of downstream services. 

Left behind by SAP innovation policies

In addition to the costs, SAP’s customer base is also concerned about SAP’s policies around its innovations.

Last year, SAP announced it would introduce new features and functions — AI and generative AI in particular — only to its cloud customers with matching RISE or GROW contracts. On-premises users and customers who have decided to remain in their own data centers with their update to S/4HANA are left out. To this day, the Walldorf, Germany-based company is sticking to this stance, leading to a breakdown in trust.

User representatives demand that these innovations should not just be made available in the cloud, and they see a need for discussion with SAP about issues surrounding this policy.

“The disadvantage of on-premises customers when it comes to innovations, the perceived pressure to switch to the cloud, and the increasing dependence on SAP are just a few examples,” Hungershausen noted.

SAP board member Thomas Saueressig, who is responsible for customer services and delivery, asserted that he wanted to take all customers on board and, above all, make the path to the cloud easier. At the DSAG congress, the Saueressig also made it clear: “The cloud is a prerequisite for SAP’s AI.”

This message, however, has not been well received by SAP’s customers. 

“SAP is leaving numerous loyal customers out in the cold,” complained Hungershausen a year ago at the DSAG annual congress in Bremen.

At the 2024 annual congress in Leipzig in mid-October, the DSAG CEO tried to adopt a more conciliatory tone. But the fundamental differences of opinion have not changed. The fact that SAP is primarily concentrating on the cloud when it comes to AI “provides material for lively discussions between DSAG and SAP about the connection or use of the corresponding results in on-premises systems,” according to a statement from DSAG. 

AI models do not have to come from SAP

DSAG officials have made it clear that there are other ways for user companies to make use of AI. The features do not necessarily have to come from SAP. The Generative AI Hub in SAP Business Technology Platform (BTP) ultimately enables access to large language models such as those from Amazon Web Services (AWS), Google, or Microsoft, DSAG noted. Algorithms and AI models could come from SAP partners as well, while SAP contributes the company-specific business data. 

It remains to be seen whether SAP can afford to ignore the needs of its clientele in the long term. In addition to transparency regarding AI use and the underlying pricing models, customers demand that AI solutions be embedded in existing systems. Five out of six (85%) SAP customers consider this important or very important, according to a survey initiated jointly with the Americas SAP User Group (ASUG). The ability to use AI on-site independent of the SAP operating model is a high priority for around two-thirds of the users surveyed.

Hungershausen reminded SAP of the promises it made in the past. “Being able to operate independently of the SAP operating model is essential given that SAP had promised to provide innovations for S/4HANA consistently and in the long term with the maintenance extension until 2040,” said the DSAG boss, commenting on the current discussions. What applies to the S/4HANA Private Cloud must also be available for S/4HANA On-Premises with an identical scope of services. 

The DSAG’s list of demands on SAP includes six points: 

  • Companies need clear answers, for example how they can leverage the added value of cloud solutions and the flexibility of the operating model.
  • Clear perspectives are needed, especially for products that will expire by 2027. New solutions to which they may then be migrated must then be sufficiently mature.
  • What applies to the S/4HANA Private Cloud must also be available for S/4HANA On-Premises with an identical range of services. On-premises customers must not be disadvantaged by innovations exclusively for cloud products.
  • Existing and planned opportunities to use AI must be communicated more transparently.
  • Appropriate and transparent pricing models based on the maturity and scope of an AI functionality are just as necessary as the provision of AI innovations for all S/4HANA customers, regardless of the operating model. 
  • Reference architectures, best practice guides, and standards for integration scenarios and technologies, including uniform regulations for the integration of AI models in SAP applications and data usage, must be developed and made available.


Read More from This Article: Riled by SAP’s AI policy, customers issue list of demands
Source: News

Category: NewsOctober 22, 2024
Tags: art

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