How Real is SAP’s Intelligent Enterprise?

Executive Summary

  • SAP introduced the concept of an Intelligent Enterprise as a significant driver for its software.
  • We answer where this concept originated and how valid it is.

Introduction

The term intelligent enterprise is an outgrowth of the current obsession and hype around the term artificial intelligence. The term is problematic because it contains a virtue necessarily within its name, and so like terms such as “smart bomb” or “smartwatch,” it tends to be self diluting over time.

But let us keep an open mind and review what SAP says about its Intelligent Enterprise offering.

Straight From SAP….or, That is ASUG

We found several articles about the SAP Intelligent Enterprise from SAP, but we thought the article published at ASUG’s website was the most understandable. SAP marketing writes most of ASUG’s material, os when something is published at ASUG, it should be considered approved by or entirely written by SAP.

Let us take a look at how the article begins.

Intelligent Enterprise is for Next Generation Businesses?

Technology pundits, industry analysts, and enterprise technology providers are fond of sharing their visions for how next-generation businesses should operate. At the 2018 SAPPHIRE NOW and ASUG Annual Conference, SAP introduced its own vision, described as the “Intelligent Enterprise.” But what does this term really mean? And what does it mean for SAP customers?

Right off the bat, we now define one virtuous term, intelligent enterprise, through endorsing that it is what “next generation” businesses use. What is a “next-generation business?”

This is another reference to “something good.”

The logic goes something like this.

Good Item is Used….Only by Excellent Entities

This builds a series of positively associative assertions; good things are connected to other good things, which, of course, is all linked back to SAP.

Data-Driven Accelerated Outcomes?

SAP defines the term like this: “Intelligent enterprises effectively use their data assets to achieve their desired outcomes faster—and with less risk.” The speed comes from automating complex processes within the business and bringing them together around a united core of master data in the cloud.

Organizations need to buy into certain philosophies for this approach to work. SAP identifies four key enablers to the intelligent enterprise:

1. Customer-centricity

2. Data that drives differentiation

3. Digitized processes

4. A cloud-first approach

This is a bit generic. Several of these items are things that no company would not admit to following, except perhaps being “cloud-first.”

However, it does not ring true when SAP proposes this, because while SAP is aggressively cloud washing its revenues as we cover in the article A Brightwork Warning on SAP’s Cloud Extension Program. This is because most of SAP’s customers use their SAP applications on premises.

Business Processes + Intelligent Technologies?

When you consider SAP’s Intelligent Enterprise vision, it functions a little like a formula. It serves these key business processes through its intelligent suite of products:

  • Customer Experience
  • Manufacturing and the Supply Chain
  • Digital Core (ERP)
  • People Engagement (HR)
  • Network and Spend Management (procurement)

So SAP has very little customer experience business (read CRM). Yes, SAP customers use SAP for a lot of manufacturing and supply chain and ERP, and they use SAP for HR, and quite a bit less for procurement (SAP has little overlap between its ERP customers and its customers that use Ariba).

So all that we have here is a statement of things that SAP customers use from SAP. There is nothing notably different about this — and the same usage pattern could be documented ten years ago on SAP accounts.

AI/ML/IoT/Leonardo

Then, where businesses want to apply intelligent technologies like artificial intelligence, machine learning, the Internet of Things (IoT), and more, they’re able to add those through SAP Leonardo. Finally, businesses need to go through the process of making sure their data is not only harmonized but moving much of it to the cloud, so they can manage it efficiently.

This is the obligatory or seemingly obligatory part of the article that mentions AI/ML. SAP has close to nothing to do with AI/ML so that we can throw those terms out.

Now we are left with IoT and Leonardo.

This article was written in 2018, but at this time, Leonardo was already dead, which we officially declared in 2019 in the article Our 2019 Observation: SAP Leonardo is Now Dead. SAP has stopped promoting Leonardo — so if the SAP Intelligent Enterprise was based upon Leonardo, well, that is a problem as it does not have any real future.

Intelligent Enterprises in Practice?

Given SAP’s focus on financial ERP applications, it often cites the example of invoice and payment matching, along with all the related approvals and subsystem ratification procedures such as separation of duty. We can now almost completely automate these procedures, while leaving a gateway for human hand-offs when we need to resolve anomalies. Of course, these anomaly resolutions can also be significantly automated as needed.

SAP’s financials in its ERP system is the most robust functionality in any of its applications.

However, it is not true that these processes are “completely automated.” They function about the same in S/4HANA as they did in ECC, and not many companies have moved to S/4HANA (and far fewer than stated by SAP).

This quotation is just inaccurate.

Embracing Automation?

Customers today can start to use this intelligent software-supported automation to shoulder repeatable, definable tasks. Embracing this change will allow companies to free up employee time and empower them to do more meaningful and strategic work.

What is intelligent software?

Did we miss something?

This is the same software as before SAP’s Intelligent Enterprise program was rolled out. All software contains intelligence, as does SAP’s, but there is nothing here to support the creation of a new term.

Let us see if the rest of the article justifies this claim.

Deeper Human-Like Intelligence?

As mechanized and back-end as these technologies are, customers can use SAP products to bring a human-like front end to the intelligent automation now being engineered into the enterprise. For example, we can create personalized and unique customer experiences using AI, chatbots, and other related voice technologies.

What is the human-like front end? I am serious because I have never heard this term before. It implies that the front end is like a human. I have never used or seen a UI that looks like a human. The author may have meant that it is user-friendly.

SAP has SAPGUI and then lower used applications like SuccessFactors or Ariba that have more usable UIs (as they are acquisitions), but it is not like human-like. There is no new automation. The AI is non-existent, and no one is using chatbots on SAP projects. Chatbots are for a company’s website, which is not something that SAP competes in, and chatbots aren’t particularly useful. Try asking one a question sometimes.

Applying Something That is Not Demonstrated

Companies that want to apply these intelligent technologies can turn to SAP for frameworks to make this happen, such as SAP Conversational AI, an end-to-end toolkit for training, building, and monitoring chatbots. According to SAP, “These chatbots can be integrated with SAP and non-SAP systems and are available as preconfigured industry-specific bots. So far, users have built 60,000 SAP Conversational AI chatbots.”

Is this primarily coming down to adding chatbots to SAP? Again, chatbots are for website visitors (at least mainly).

The Crucial Cloud Connection?

The cloud is the essential connection across the entire intelligent enterprise. Whether on premises, public, or hybrid, the degree to which the intelligent enterprise gets smarter is a direct factor of the amount of secured network connectivity it engineers into the fabric of its new computing stack.

Why is that true? A hosted solution, hosted in a data center (that is not cloud) is also a connection across the entire intelligent enterprise. SAP then contradicts itself by saying

“whether on premises, public or hybrid”

Doesn’t that deny the claim that it is cloud….that is what was stated in the previous sentence?

Intelligence that Comes from…..Blockchain?

Part of this “connectedness factor” will set customers up to harness new innovations like blockchain. SAP says it has recognized the part that blockchain plays in creating more-intelligent enterprises, so it’s developed SAP Cloud Platform Blockchain. This offers blockchain as a service, delivered at the right power and scope, based on individual customer needs.

SAP may have a cloud blockchain offering, but many SAP customers do not use blockchain. Furthermore, blockchain is an online register — so why is it intelligent, or why does it contribute to the SAP Intelligent Enterprise?

It is not at all clear. SAP also states that it has 65 customers that participate in its blockchain initiative, but that still does not explain why blockchain is part of something intelligent.

The Intelligent Enterprise Adoption Curve

Ultimately, becoming an intelligent enterprise is about adapting and changing so you’re ready for what’s ahead. These types of enterprise-wide changes require significant investments and culture shifts, so SAP acknowledges that customers will adopt these changes in phases. And some organizations will undoubtedly move faster than others, acting as the early adopters.

But the nature of these changes can start to create a virtuous cycle. As organizations adopt technologies such as automation controls, chatbots, blockchain, and machine learning (ML) to gather more information, they will get smarter—continuing to speed up the cycle of innovation.

Many customers will still have a way to go before they become full-on intelligent enterprises. But these technologies exist, and SAP is ready to help customers start getting the most from them now.

In this explanation, SAP threw a lot of somewhat disassociated things into a big Christmas stocking and called it “Intelligent Enterprise.” And many of these things are things that SAP has very little to do with.

Conclusion

This article by SAP is an incoherent and disassociative attempt to make some old things that SAP is involved with and things that are trendy but have little relevance to SAP to create something new and sexy for customers to get excited.

There is no evidence from SAP that its Intelligent Enterprise is anything.

The Necessity of Fact Checking

We ask a question that anyone working in enterprise software should ask.

Should decisions be made based on sales information from 100% financially biased parties like consulting firms, IT analysts, and vendors to companies that do not specialize in fact-checking?

If the answer is “No,” then perhaps there should be a change to the present approach to IT decision making.

In a market where inaccurate information is commonplace, our conclusion from our research is that software project problems and failures correlate to a lack of fact checking of the claims made by vendors and consulting firms. If you are worried that you don’t have the real story from your current sources, we offer the solution.

Financial Disclosure

Financial Bias Disclosure

Neither this article nor any other article on the Brightwork website is paid for by a software vendor, including Oracle, SAP or their competitors. As part of our commitment to publishing independent, unbiased research; no paid media placements, commissions or incentives of any nature are allowed.

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References

https://www.asug.com/insights/what-makes-an-intelligent-enterprise