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Author's profile photo Arnaud SERGENT

SAP Technological Strategy

The challenge of digitalization

In the IT industry, we’ve been hearing daily about digital transformation for at least 5 years by now. One could argue digital transformation started with the dawn of the computer itself, so in order to define this latest wave, I like to refer to the definition that Gartner gave it in its Gartner IT Glossary :  “Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.”

But beyond the world of IT, digitalization is now going mainstream. For example, the Economist has devoted a full issue to it (The Economist, May 6th 2017).  “Whether you are going for a run, watching TV or even just sitting in traffic, virtually every activity creates a digital trace—more raw material for the data distilleries. Meanwhile, artificial-intelligence (AI) techniques such as Machine Learning extract more value from data. Algorithms can predict when a customer is ready to buy, a jet-engine needs servicing or a person is at risk of a disease.”

Of course, this reality is reflected every day in the exchanges with our own customers. Customers want their Information System to provide Customer 360° insights, Experience Management, insight to action analytics to take decisions based on data, better employee experience for their staffs, etc.

All this while juggling tightening budgets between the pressure of running the business (necessary but not bringing new value) and investing in innovation, which brings the real new business opportunities.

Despite all this, according to the consultancy McKinsey, 92% of company must still evolve, i.e. haven’t’ digitalized yet.

SAP, the leader in Enterprise Software, sits at the heart of this global challenge. It is uniquely positioned to address these challenges successfully.

That’s the reason why we’re bringing the Intelligent Enterprise vision to the Market.


SAP Intelligent Suite: tackle the digitalization challenge by enabling the Intelligent Enterprise

 Before getting into the specifics of defining the meaning of “Intelligent Enterprise”, I’d like to go back first to the task of defining ‘intelligence’ itself. The most common words are often the most difficult to define.

This definition by David G. Myers in Psychology. 12. Edition. Worth, 2018, is particularly relevant to our context:

“Intelligence is the ability to learn from experience, solve problems, and use knowledge to adapt to new situations.”

This is exactly relevant to the capabilities we’re adding to our enterprise software. The ability to learn from the past (i.e. machine learning algorithms fed by past transactions in order to anticipate, for example, the failure of a machine, the behavior of an employee, the needs of a customer, etc.), the ability to solve automatically problems in real time while they happen (autonomous fraud detection, machine anomaly detection, automated database tuning, business process adaptation, supply chain modification, etc.), the ability to use robots to handle intelligently repetitive tasks.

In practice, the Intelligent Enterprise can be implemented thanks to 3 core components:

  • Intelligent Suite
  • Intelligent technologies
  • Digital Platform


1- The Intelligent Suite is constituted of the ERP Suite (S/4 HANA) and all the LOB Cloud applications, tightly integrated in order to provide end to end business processes.

2- Intelligent Technologies means injecting Artificial Intelligence and Machine Learning algorithms into all our products.

3- Finally all the above is made possible thanks to the foundation of the Digital Platform; and relying on the Cloud platform for agile extensions, innovations, and differentiation.

Let’s dig deeper into each of those 3 components.


The Intelligent Suite

We characterize the Intelligent Suite by 3 core capabilities:

  • Next-generation processes: a real time platform with simplified business processes
  • Intelligent processes with predictive analytics and robotic automation
  • A delightful user experience

The ultimate purpose is to liberate users from low-added value repetitive tasks to unlock productivity, innovation, and a higher job satisfaction, as illustrated in the figure below:


The Digital Platform

The Digital Platform is the foundation that powers and enables our vision. It’s the technology that enables us to create value for our customer.

Materializing the Intelligent Enterprise requires a radical data management transformation. To limit to the maximum the replication of data (The Principle of One), break data silos and regroup segregated workloads onto one single platform, handling both transactional and decisional workloads. This has been the main purpose behind the development of SAP HANA. HANA has defined the Hybrid Transactional Analytical Processing (HTAP) database category. HANA is the first enabler of the Intelligent Enterprise.

But another key topic is also the SAP Cloud Platform.

SAP Cloud Platform services are enabling 4 key use cases for the Intelligent Enterprise:

  • Extend: Quickly add new functionality to your existing cloud and on-prem applications to customize the standard business processes to match your business needs. Extension can be developed in Java, node.js and in ABAP. For the ERP, deploying extension in SCP allows you to “keep the core clean” while matching your exact business needs. Sticking to the standard on your S/4 HANA instance allows you to easily upgrade to new versions of the software and consume SAP innovation much more quickly than previously.
  • Connect: Connect your cloud and on-prem applications to eliminate data silos and make digital access simple, secure, and scalable. SCP provides User Experience as a Service: through Fiori, Portal, Mobile applications, you can present a unique, versatile UX regardless of the underlying backends.
  • Build: Rapidly build and run new cloud applications, business services and APIs to solve new problems, engage new customers, and drive new revenue. New applications can be developed in Java, node.js and in ABAP.
  • Integrate: Deliver delightful user experiences across various digital touchpoints enabling innovation, without disrupting core business processes. SAP provides data and process integration services for cloud and hybrid architecture. As always, SAP differentiates itself by delivering the business content, that is preconfigured integration pattern to enable end to end business processes across hybrid architectures.

Finally, another key aspect and differentiator of SAP Cloud Platform is its Multi Cloud architecture. SCP can be deployed on all the leading Could providers on the market: AWS, Azure, Google Cloud, and SAP of course, because it is developed on top of the Cloud Foundry platform.


Intelligent Technologies

Machine Learning algorithms are nothing new in themselves, but they’ve been taking a huge importance lately because we’re at a time when the technology has become powerful enough to leverage them in an efficient and economical way, and the huge quantity of data generated since the dawn of the digital economy is now available to train them to produce quality outcomes. I’ll cover Machine Learning in depth in a future blog.

Machine Learning is an important part of the intelligent technologies at SAP, but only one of many:

Intelligence is embedded into all of SAP’s applications: For example, embedded AI in S/4HANA, SuccessFactors and SAP Cloud Platform to predict outcomes, defects or anomalies, AI-enabled robotic automation;

AI libraries, ML engines and development tools to leverage them in SAP HANA and SAP Cloud Platform;

And of course, a high performance in memory data management platform with SAP HANA.


SAP’s unique value proposition

In conclusion, let us summarize SAP’s unique value proposition, made possible by its digital platform:

  • The only Intelligent Suite with a global business processes coverage
  • The Triad of Innovation with SAP HANA, SAP Cloud Platform (SCP), and SAP Leonardo
  • A deep industry knowledge simply unique in the industry
  • A digital platform for the 21st century: Innovations to support your business models – on premise, in the cloud, hybrid.

As closing words, I leave you with the words of Bill McDermott, bringing light into the finality of technology at SAP: Machines can’t dream.

” It is possible to create a world where AI benefits humanity, where automation frees people from dangerous, repetitive tasks and affords us the freedom to focus on activities that only humans can perform – with empathy, moral judgment, and love.”

The Digital Platform is the foundation that powers and enables our vision. It’s the technology that enables us to create value for our customer.


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      Author's profile photo Rick Ryan
      Rick Ryan

      Nice explanation on AI technologies. Thanks

      Author's profile photo Deepak Gosain
      Deepak Gosain

      Nice Explanation

      Author's profile photo Richard Brown
      Richard Brown

      Yes, that’s a nice information on the digital transformation of the IT’s sector. 

      Author's profile photo Patrick Li
      Patrick Li

      Thanks for your detail info, it is quite helpful to understand IE(Intelligent Enterprise)!


      Please allow me to put up serveral questions in the below:

      1. Can SAP Leonardo achieve the similiar goals as IE would do? If not, what are their gaps? Since my sense is that, originally SAP Leonardo is planned to play IE's role?
      2. I saw, on top of AI/ML, IoT and Analytics also are parts of Intelligient technologies in your first chat ( from top to bottom), if so, what key breaking-down technologies are included into both domains?
      3. Potentially, Blockchain could be widely used in the coming enterprise, is there any plan to include it into IE?

      Looking forward to your answering and thanks!