The global and independent platform for the SAP community.

AI reshuffles the cards in software engineering as well

Here the users of standard software, there in-house developments: This clear separation is also over in software development and maintenance, because cloud and AI development is becoming increasingly standardized.
Heiko Henkes, ISG
January 31, 2019
AI Column
avatar
This text has been automatically translated from German to English.

On the one hand, the development of proprietary software systems is becoming increasingly standardized thanks to cloud technologies and automation through AI (artificial intelligence), and on the other hand, there is movement in the market on the part of the standard software providers, since the users of ERP or CRM solutions generally remain loyal to their traditional providers, but with new technologies such as AI or machine learning they are quite prepared to think outside the box and give third-party providers a chance.

AI and machine learning, in particular, are reshuffling the cards in the market as they are able to further automate and industrialize software development and maintenance.

As the current provider comparison "ISG Provider Lens 2019 - Application Development & Maintenance" (ADM) shows, the wheat is currently being separated from the chaff on the provider side:

The large providers in particular have already integrated AI technology and cognitive analytics capabilities furthest into their portfolios. The smaller providers, on the other hand, must be careful not to fall behind in the face of this development.

Especially since, in addition to applications, entire business processes are now coming into the focus of AI. Major providers already offer AI functions that analyze, evaluate and improve business processes.

But even mid-sized ADM providers can, in principle, keep pace here in the long term, as they have access to AI systems via third-party providers such as IBM's Watson, for example, and can integrate these into their own services.

In the industrial environment in particular, ERP inventory systems such as SAP continue to dominate. But the need for so-called "next generation" ADM is also unmistakable in the manufacturing industry - especially in actual production and supply chain optimization, where cloud, IoT or machine learning technologies are increasingly being used.

For example, numerous IoT solutions now enable predictive maintenance, a self-optimizing production line, or automated inventory management.

What's more, the concept of smart factories is about to revolutionize the entire production process in the context of cyber physical systems (CPS). The Industrial Internet of Things (IIoT) - keywords 5G and edge computing - is not only making production more agile and efficient.

They also lead to increased compliance of production processes and better quality management with a comparatively transparent and predictive cost framework. Accordingly, the demand for dedicated industry know-how, automation and industry-specific solutions is increasing.

If companies no longer find this sufficient with their traditional (ERP) providers, companies such as IBM, Capgemini or Atos are not only waiting in the wings on the ADM side, they are also providers specializing in the manufacturing industry. They are already gaining market share.

With the appropriate industry and process knowledge, IT service providers and their developer forges are able to bring customer wishes to life in no time at all thanks to cloud development platforms and program store floor-compliant applications based on the latest standards and thus connectivity.

Furthermore, the service providers also have the knowledge of already available apps from cloud marketplaces or app stores as well as dedicated IoT platforms. Based on increased standardization, these can more and more often replace a monolithic complete solution that often did not meet business department requirements.

As a result, Manufacturing Execution Systems (MES) connected to an ERP such as SAP also come under pressure, as they act as a catalyst and link between the sensor or production control and process management level with the operational and corporate management level.

avatar
Heiko Henkes, ISG

Heiko Henkes is Director Advisor at ISG Information Services Group.


Write a comment

Working on the SAP basis is crucial for successful S/4 conversion. 

This gives the Competence Center strategic importance for existing SAP customers. Regardless of the S/4 Hana operating model, topics such as Automation, Monitoring, Security, Application Lifecycle Management and Data Management the basis for S/4 operations.

For the second time, E3 magazine is organizing a summit for the SAP community in Salzburg to provide comprehensive information on all aspects of S/4 Hana groundwork.

Venue

More information will follow shortly.

Event date

Wednesday, May 21, and
Thursday, May 22, 2025

Early Bird Ticket

Available until Friday, January 24, 2025
EUR 390 excl. VAT

Regular ticket

EUR 590 excl. VAT

Venue

Hotel Hilton Heidelberg
Kurfürstenanlage 1
D-69115 Heidelberg

Event date

Wednesday, March 5, and
Thursday, March 6, 2025

Tickets

Regular ticket
EUR 590 excl. VAT
Early Bird Ticket

Available until December 20, 2024

EUR 390 excl. VAT
The event is organized by the E3 magazine of the publishing house B4Bmedia.net AG. The presentations will be accompanied by an exhibition of selected SAP partners. The ticket price includes attendance at all presentations of the Steampunk and BTP Summit 2025, a visit to the exhibition area, participation in the evening event and catering during the official program. The lecture program and the list of exhibitors and sponsors (SAP partners) will be published on this website in due course.