AI Glaze

SAP is going to great lengths to give the impression that it has AI firmly under control. Its regular success stories about new AI applications, modules, and processes seem forced. What's that all about?

While the industry is debating whether real money can be made from the many AI innovations, SAP is trying to create the illusion of progress with AI actionism. Currently, it is impossible to discern SAP's AI strategy, as the term "AI" appears everywhere. SAP is pouring artificial intelligence over its own ERP offering like a glazing on a donut.

SAP customers have not yet recognized any added operational value. There are, however, many test balloons and proofs of concept. SAP partners are organizing hackathons and seeking out financially stable customers. Hardly anyone dares to say glazing a donut is a bad idea when a stuffed turkey with mashed potatoes and cranberry sauce would probably taste better.

AI will contribute to the next generation of ERP systems. However, traditional if-then-else programming is far from obsolete. Large language models, machine learning, and AI are based largely on probabilities. Complex statistical rules can produce remarkable results. Ultimately, though, the answers of a large language model only reflect a certain real world probability.

But who wants to depend on probability calculations when deciding whether there will be a salary at the end of the month? In this case, the good old if-then-else rule seems more reliable than any AI: If it's the end of the month, there's money; if not, then there's no money in the account.

It seems illogical, arbitrary, and not terribly productive to construct an AI solution for every use case by force. SAP should clearly identify the ERP sections where artificial intelligence can provide operational value. Then, a reasonable contribution margin can be achieved—good money for good AI. Customers will not understand an SAP boss who acts like a confectioner. AI must pay for itself and not merely make ERP more appealing. Whether SAP can manage the boundary between AI marketing and ERP added value remains to be seen. The unpredictability of AI must not lead to unpredictability within SAP.

The cartoon by Robert Platzgummer (1975 to 2016) was first published in the October 2005 issue of E3. Professor Henning Kagermann, then head of SAP in Walldorf, tried to establish a new Enterprise Service Architecture (ESA) with sweet promises.