In April 2018, Franck Cohen took over the responsibility for the newly created Digital Core organization at SAP, where the company fully aligns its ERP and industry business.
One of Cohen’s main objectives is to position SAP as the software provider that enables the intelligent enterprise. Here, he talks about the benefits of SAP’s public cloud solution and explains the company’s bet on artificial intelligence (AI).
Q: From your perspective, what is the real value SAP customers are getting from SAP S/4HANA Cloud?
A: There are three key benefits to customers using our public cloud solution SAP S/4HANA Cloud. The first is total cost of ownership (TCO): There is no doubt that our customers want to reduce the cost of ownership and get a more efficient IT system. The second is our bet on artificial intelligence and the intelligent enterprise. The third is the speed of innovation that comes with the cloud.
Q: Let’s dig into each of these a bit further. How does SAP S/4HANA Cloud lower the cost of ownership?
A: We deliver on this in three ways. First, we have been able to reduce the implementation time from 16 months for an ERP system to 16 to 20 weeks. For companies that want to start their digital transformation or that want to make a merger or an acquisition, it is crucial to have a very fast implementation cycle.
Second, SAP S/4HANA Cloud is delivering a high degree of standardization and simplification, which is what customers want today. They want to simplify. They want to rely on one system.
Third, it is our objective to provide native integration with the other cloud lines of business at SAP. So customers don’t have to manage different data models, they have only one data model. And we can deliver all of that as part of the solution. This is going to have a serious impact in terms of TCO.
Q: Can you tell me more about SAP’s bet on AI?
A: To make it simple, we are betting on AI to change the user experience, to automate the processes, to create immediate value by reducing the cost, and to reinvent what I call the next generation of best practices taking advantage of AI and machine learning as a catalyst.
Our objective is to have the first hands-free ERP in the market, using no keyboard, but rather voice recognition. Natural language is already well established in the AI world. So I predict that voice recognition is going to be the new normal to ask questions.
More than that, we want to have an intelligent assistant. Let’s imagine the following scenario: Say you are the CFO of the company and you have a meeting with procurement in two hours. You need a system intelligent enough to go to your calendar, to look at the agenda, and to bring you the KPIs for procurement before the meeting. The system will learn from your habits and will adapt intelligently, so you get to efficiently use the system.
Another piece that has also a lot of implication in terms of TCO is automation. We are going to use artificial intelligence to automate everything that can be automated in our ERP. And the good news is that there are a lot of tasks that are repetitive and that therefore can be automated.
We have a very ambitious goal, which is to automate 50 percent of manual tasks you have in the ERP system in the next three years. That means huge savings for companies. And that would not be something aside of the software, but it will be integrated in the core system.
Q: How can advancements to AI benefit by the speed of innovation offered with the cloud?
A: I briefly mentioned the next generation of best practices taking advantage of AI and machine learning as a catalyst. Let me go into a bit more detail here.
The best practices that we have today were built in the seventies and eighties, based on the technology that was available back then. Things are changing very fast with new technology. The days of waiting three years to make an upgrade to your ERP are over. With SAP S/4HANA Cloud, we are delivering four releases every year. With every release, we bring 20 percent more new functionality.
And imagine what is possible if we can now reinvent the processes using the latest technology like IoT, blockchain, and more importantly using AI as a catalyst for truly transforming a company. Our objective now is to rebuild the processes and to deliver to the market the next generation of best practices. We are going to reinvent ourselves and generate a lot more value for our customers through this next generation.
Q: You’ve talked a lot about customer value and strategy. Let’s take a look at the numbers: How successful is SAP S/4HANA?
A: SAP’s next-generation ERP, SAP S/4HANA, sits at the core of the intelligent enterprise. In the first quarter of 2018, SAP S/4HANA adoption grew to more than 8,300 customers, up 43 percent year-over-year. In the first quarter alone, we added about 400 additional customers, of which approximately 40 percent were net-new to SAP. The numbers clearly show that it is not only about migrating our customer base, but that we are winning market share because of the power of SAP S/4HANA in general.
Another important fact to mention is that SAP S/4HANA public cloud is the fastest growing cloud solution ever, across all vendors that have entered the mainstream market.