How Machine Learning may impact Wholesale processes

A year ago, Gartner named Artificial Intelligence, Machine Learning and conversational systems three of the top strategic tech trends for 2017 (see Gartner 2017 Trend Report). Technologies augmenting the human potential at work are becoming more mainstream. Today we’d like to take a closer look at Machine Learning and how it is impacting Wholesale processes.

Machine Learning gives computers the ability to learn without being explicitly programmed. This creates massive opportunity in processing structured and unstructured data – very interesting for a high-volume business like Wholesale Distribution. Machine learning helps to automate repetitive tasks and allows humans to be more productive and focus on higher value tasks. To learn more about the SAP Leonardo Machine Learning Foundation check out this video.

Machine learning will drive automation (e.g. invoice verification), predictive analytics (e.g. customer behavior), decision support (e.g. customer target groups) and various other business processes. Intelligent apps automate routine tasks that take time from value-adding activities.

But how can you get started? Some applications are already available ready-to-run. These can be also of special interest to the SMB market as they are risk-free and affordable with high potential for quick ROI. One such application is the SAP Cash Application (8005289). It takes invoice verification to a completely new level and has shown results of above 90% success rates in customer tests. It can be used not only by S/4 HANA cloud and S/4 HANA on-premise customers, but also by ERP customers via a connector.

Another solution interesting especially for Wholesale Distributors with high volume in customer support and service is SAP ML App for “Ticket Intelligence” (8005362). This application learns from historic data on which answers fit best to received questions. Thus, the automatically suggested solutions continuously improve over time. With this response times and services costs can be significantly lowered. It is available in SAP’s CEC portfolio.

Very interesting for Wholesale Distributors should be the new scenario in procurement (as part of S/4 HANA) – the SAP Quantity Consumption Contract. Utilizing predictive capabilities it alerts buyers to re-negotiate contracts that will soon expire.

There are more strong use cases in finance, procurement and sales, either available or on the roadmap of S/4 HANA. Think of decision support on open purchase order items using invoice receipt monitoring to automate FI postings. Or an automated item creation based of available texts in item descriptions. Similarly, material group assignments can be automated with machine learning. Just three examples, that help illustrate how with machine learning you can increase the level of automation and decrease the error rate. More use cases you can find here.

Of course, SAP offers with the SAP Machine Learning Foundation a service to build own scenarios. But this development effort might be a tough challenge for small and mid-size wholesale distributors. Today, wholesale distributors use to a large degree SAP’s core business processes in ERP and prefer ready-to-run processes. In S/4 HANA, the SAP core processes are continuously enhanced and improved by machine learning capabilities. A migration to S/4 HANA gives wholesale distribution customers the opportunity to benefit more and more from these new and innovative business processes.

If you want to learn more about ML check out and join the SAP JAM Group. A great overview, introduction and links to further reading can be found at the SAP Leonardo page. Another interesting article can be found on Digitalist Magazine: Machine Learning And Business Problem-Solving. For a good summary on Machine Learning basics and the different learning types (Supervised, unsupervised and reinforced) check out this article on Android Authority. And lastly, Some exciting customer stories you can find here.

If you are interested to design the intelligent enterprise please do not hesitate to get in touch with me and my time. We can help you set up a call to discuss possible next steps. Information is everywhere – you just have to transform it into knowledge.