SAP partners up to make AI more practical

SAP is stepping up its efforts to embed AI functions and applications across its offerings to better serve its customers’ everyday business. Unfortunately, according to recent studies, many companies are struggling to make the most of AI in service of their business missions — even as ERP, SAP’s core market, might just be generative AI’s killer enterprise app. 

Gartner analysts recently predicted that at least 30 percent of generative AI projects will be abandoned after the proof of concept (PoC) by the end of 2025. The reasons: poor data quality, inadequate risk controls, escalating costs, and unclear business benefits.

To ensure these Cassandra calls do not come true, SAP has entered into a partnership with the appliedAI initiative. Together, AI scenarios will be explored and suitable use cases for SAP’s customers will be identified, the company said in a statement. The aim of the partnership is to “find effective solutions that can be used in industrial applications and advance the implementation of artificial intelligence.”

AI transformation partnership

Claiming to be Europe’s largest initiative for the application of trustworthy AI technology, appliedAI was set up in 2017 by Andreas Liebl as a division of UnternehmerTUM Munich. In 2022 it was transformed into a joint venture with Innovation Park Artificial Intelligence (IPAI) Heilbronn.

The  appliedAI initiative seeks to provide comprehensive support to corporations such as BMW and Siemens, but also to midsize user companies, in their AI transformations, according to their mission. The exchange and joint development of knowledge, accelerator programs, and specific solutions and services are intended to help with this.

This is where SAP could come into play. Many partners of the appliedAI initiative use SAP’s software to run their businesses. The new collaboration between SAP and appliedAI opens up opportunities for the appliedAI partnership network to “optimize business processes with AI and make better use of data, especially in the areas of finance, HR, and supply chain,” according to the companies’ announcement.

“A key to increasing efficiency with AI and improving operational processes lies in the use of AI in business processes,” said Andreas Liebl, CEO and co-founder of appliedAI, commenting on the partnership with SAP and speaking of an “ideal partner for our mission to maintain and expand Europe’s competitiveness.”

Philipp Herzig, chief AI officer of SAP SE, described the cooperation as an important step to evaluate and advance further AI applications in business processes.

“The collaboration enables us and our customers to exploit the potential of the technology even better and, together with the appliedAI partner network, to build up the necessary knowledge about AI in companies,” he said.

According to Herzig, more than 27,000 customers are already using SAP Business AI. The German software group has been trying for almost a year and a half to wire up a wide variety of AI functions with its business applications. The key building blocks for this are the generative AI assistant Joule and the Generative AI Hub in SAP AI Core, which is provided via SAP’s Business Technology Platform (BTP) and through which customers and partners can access various AI models.

SAP expands AI capabilities

In a blog post in mid-August, Herzig introduced new AI functions in the SAP portfolio. For example, compliance and IT experts could use Joule to evaluate changes in the law in the context of their company and SAP solutions. This would enable users to get faster answers to their questions about how changes in the law affect their SAP products and business processes.

According to Herzig, the SAP Automation Pilot supports development teams in creating DevOps automation processes. Based on simple prompts, projects can be implemented more quickly without requiring in-depth knowledge of various SAP tools and programming. New AI-supported functions in SAP’s integration suite are also intended to help developers identify anomalies more quickly, such as sudden increases or decreases in API calls. This technology helps to identify and resolve problems before they spread, Herzig promises users.

For SAP, the main task will be to convey the concrete added value of its new AI functions, as many customers remain skeptical about the use of AI. What annoys large parts of SAP’s clientele is the fact that AI innovations are available only to customers with RISE contracts and are linked to the use of the cloud.

Almost half of the customers surveyed by the German-speaking SAP user group (DSAG) at the beginning of the year did not want to comment on the Walldorf-based company’s AI strategy. Just one in 10 described it as good, while 21% gave it at least a “satisfactory” rating. What is specifically required are practice-relevant use cases and open integration that also works on-premises, according to a statement from user representatives in spring 2024.

“Our members see the coupling of AI and cloud as particularly critical,” said DSAG Chairman Jens Hungershausen. “They want easier access to AI and more transparency regarding existing and future possibilities.”

Hungershausen spoke of a high level of dynamism in the AI ​​sector and the associated development of the market, which is causing many companies to act with caution. “Here, we as DSAG, together with SAP, are called upon to provide more clarity, provide answers, and set milestones for orientation.”