International security leaders placed technology at the forefront of discussions during last week’s Munich Security Conference (MSC). Governments increasingly recognize the necessity of investing in the digitalization of the defense sector to ensure a competitive edge in the new global security environment.

SAP has helped defense and security customers around the globe navigate economic and geopolitical shifts for decades, enabling transformation and infusing intelligence into their operations. Today, SAP’s tailored solutions remain the nervous system of modern Western defense. Drawing insights from discussions at MSC, we see three crucial steps to ensuring NATO, the European Union, and the broader defense sector are ready for the digital age.

“Digital transformation and the secure exploitation of data will comprise the bedrock of European defense establishments’ future military power; they will need to make significant progress in these areas before European defense can seriously consider the operational integration and battlefield deployment of advanced technologies like AI.”

Digitalization of Defense in NATO and the EU: Making European Defense Fit for the Digital Age, International Institute of Strategic Studies

Adopting Cloud

Cloud adoption is critical for organizations looking to be more agile, innovative, and competitive because cloud applications offer unparalleled flexibility and scalability. With dynamic and secure cloud-based applications, defense organizations can increase collaboration between agencies; quickly manage, analyze, and share vast amounts of data; and manage complex design, simulation, and engineering tasks so they can deploy their resources most efficiently. Cloud also revolutionizes the way defense forces utilize data as a strategic asset. Since the cloud facilitates the integration of advanced technologies such as artificial intelligence (AI), machine learning, and data analytics, the defense sector can gain actionable insights from diverse data sources that enhance their readiness and operational effectiveness.

Despite the clear benefits of cloud, there are challenges to cloud adoption due to varying requirements between countries and defense organizations. However, these challenges are not insurmountable. Working with the world’s leading defense organizations, including 21 North Atlantic Treaty Organization (NATO) nations, SAP has the knowledge and experience to help the defense sector effectively navigate modernization. By facilitating dialogue between countries and organizations like NATO and the EU, we can work to harmonize approaches that help pave the way for widescale cloud adoption and can strengthen both security and interoperability.

Defense and security organizations are using intelligent SAP solutions to maintain mission readiness

Embracing Artificial Intelligence

Advancements in AI have unlocked the potential for game-changing operational efficiencies and new strategic advantages. AI can ensure logistics and supply chain operations are efficient, agile, and resilient by forecasting demand, optimizing transportation routes, and managing inventory.

SAP’s AI capabilities can support the defense sector in predictive maintenance, quality control, supply chain optimization, and overall operational efficiency. The MSC discussions came in a timely manner as SAP teams are currently discussing AI use cases with NATO and the defense forces at the Defense Interest Group (DEIG).

AI can help ensure private and public organizations are more intelligent and resilient, but AI must be relevant, reliable, and responsible. With SAP Business AI, customers can realize the full value of AI because it is built with the highest concern for security, privacy, compliance, and ethics and connected to SAP’s wealth of enterprise data.

Increasing Digital Collaboration and Interoperability

Given the multinational and multifaceted nature of the defense sector, digital collaboration can expedite the product development lifecycle and enhance the efficiency of operations and supply chains by enabling real-time communication and coordination. Cloud-enabled digital collaboration tools, such as SAP Business Network, can be crucial for achieving interoperability among allied forces as they enable seamless communication and data exchange between diverse systems and platforms. The fact that a significant majority of NATO, EU, and key partners’ defense forces run on SAP makes us “allied by design.” The automotive industry set a good example of what digital collaboration can look like with Catena-X – an inspiration for “Defense-X” to enable digital collaboration of the sector from the factory to the foxhole.

The ability to truly modernize the defense sector hinges on its ability to adopt the cloud, embrace AI, and achieve greater collaboration and interoperability. However, the disparate regulatory landscape remains an impediment to modernization efforts and poses challenges to global cloud adoption. Harmonizing regulatory requirements is key to ensuring a cohesive and standardized approach. SAP is ready to help unlock the transformative capabilities of cloud and AI technologies effectively for defense forces and lead the dialogue across NATO and the EU together with defense clients, partners, and regulators.

Peter Selfridge is global head of Government Affairs at SAP.

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