Business leaders today face a number of pressing challenges: economic instability, on-going supply chain volatility, and even the speed at which new technologies advance. To address these topics, the modern enterprise requires supply chains that are transparent, resilient, seamless, and sustainable.
ASUG recently sat down with Sven Denecken, SVP & Chief Marketing and Solutions Officer for SAP Industries Group. Tasked with leading solution management and product marketing for all SAP industries, Denecken has also assumed responsibility for the customer experience line-of-business portfolio.
At SAP Sapphire in Orlando announced SAP Business Network for Industry, which combines the benefits of networked supply chains with SAP’s industry expertise to help customers across multiple industries, including consumer products, high tech, industrial manufacturing, and life sciences, with creating more resilient supply chains. Denecken believes such industry-specific products are essential to the success of the modern intelligent enterprise.
In our interview, we discussed how SAP helps businesses meet industry-specific requirements, break down the silos that stifle collaboration, and leverage emerging technologies like artificial intelligence (AI).
This interview has been edited and condensed.
Q. As SAP modernizes its offerings, how are you getting more strategic with industries and focusing on industry-specific requirements?
A. We believe the industries our customers operate within define their core business. That’s why SAP enhances solutions across different industry needs, which allows organizations to configure, adopt, and deliver value to their business.
We take a best-practices approach and deliver specific functionality tailored to industries. Fifty years of experience went into SAP’s industry cloud solutions, which we launched in June 2020. It’s important to remember that all of these developments are industry-specific, built on SAP Business Technology Platform (BTP). 80% of them were built with the partner ecosystem. We address industry-specific requirements in a modular, cloud-based approach that embraces the partner ecosystem.
Q. In the past, many enterprises have operated in silos. How are emerging solutions from SAP supporting efforts to integrate and optimize resources across departments to accomplish business transformation objectives?
A. We, as a vendor, have an obligation to understand the business process end-to-end. I'll give a very concrete example. Either in B2B or B2C, if I want to create a good customer experience, it starts from the first touchpoint. That’s truer than ever in retail, where you have an omnichannel experience. It’s true in any business where leaders ask themselves, “Can we deliver with a scarcity of goods? Can we deliver with supply chain disruptions? Can we deliver at a certain price point?”
This is why capabilities that provide data about both how a business is changing and visibility into end-to-end processes are so critical. Businesses need an industry-tailored customer-experience product, which is tightly integrated and appeals to specific industry needs.
Another important trend we're watching is industry convergence. For example, if you run a charging station for electric cars but you also have petrol cars, you’re supplying oil, gas, and utilities, but truly you are a retailer. The experience of how I bring customers to my business changes.
We heard this sentiment from many of our American customers at the National Retail Forum in January, where we saw right away that retail business leaders must build a full end-to-end process.
Q. There appears to be a range of options associated with SAP modernization, from lifting and shifting current workloads into cloud platforms to adopting new cloud native services. How can different industry segments best access and manage the financial and economic implications of complex SAP modernization initiatives?
A. If we look at a customer who's deeply engaged in manufacturing and needs to create an IoT digital point—which sounds like technology, but it's not—you need to build up manufacturing completely differently. And you don't have the luxury of building up such plans, production, and supply chains over 10 years. You need it to be [functional] now, so you could have a digital twin, where the demand and flow and supplier connections to the business network are automatically built in.
Especially in such environments, automation and data connectivity play big roles. In March 2023, we held a virtual event, SAP Data Unleashed, that showcased significant data innovations and collaborations to make it easier for businesses to access context-rich, mission-critical data to shape their strategies for the future. This is how data ecosystems can interact and utilize process optimization and automation, all the way down to AI or generative AI.
Q. What role do you see emerging technologies—such as AI, ML, and big data analytics—play in helping different industry segments secure more value from SAP technology investments?
A. In our offerings that utilize AI, there are differences—robotic process automation, machine learning, AI, deep learning, generative AI—but we have built-in AI capabilities from the get-go. The beauty is, from an industry perspective, we can leverage those directly from SAP BTP. Not only do we have our own technology, but we also use partner technology.
From an industry perspective, we define how a business, or part of the business process, might look. Then we use the AI technologies available in BTP in that industry context. We’ve been integrating AI into our products from Day 1, from a business perspective. The difference for SAP is we make it built-in, not bolt-on. It’s not an afterthought. It’s not a fancy technology you need to rethink. When it comes to how we leverage technology, it needs to deliver business value based on the data. We have data, and that data resides with deep industry and process expertise. It’s important that people understand—and this was reinforced at SAP Sapphire—many new use cases will involve generative AI because the technology advances so fast.
Q. What effect is this having within industries?
A. In the last few years, industries have been completely disrupted. Take life sciences, for example. We built SAP Intelligent Clinical Supply Management, and it brought together players from the industry onto one new platform, a data ecosystem, where connections can be hyper-automated even though the players all have very different systems. That’s why we used SAP standard solutions to start with; we built it with industry-specific extensions and brought AI in from the get-go. It’s designed to help life sciences optimize the visibility of clinical trials, from manufacturing all the way to packaging, labeling, and shipping. This is how we need to look at technology for the industry: not just as a feature function set, but as technology that makes the data flow and the process flows happen.
Q. You talked about AI as a built-in technology versus a bolt-on technology. What are the benefits to your customers?
A. First of all, it’s already part of the offering. It’s not about a tool or a capability that’s added so you then change your business processes. We design the business processes right away by leveraging robotic process automation or machine learning; that’s enough for certain processes.
But if you think about AI, and specifically generative AI, that's a new ballgame. Understanding business data and data semantics makes a difference. It’s not something you can easily abstract. Why AI is built into our solution and built into the business process data, with deep industry knowledge, is that it makes learning from that technology faster. You can't just extract things from SAP and think generative AI will do the trick. You need to keep it in context, and data semantics are often forgotten.
We have data ecosystems that started in the automotive industry, like Catena-X or Manufacturing-X, recently launched at the Hanover Fair in Germany. I see that those capabilities are built on a network of producers—BMW, GM, and others—that together with the suppliers will be the future. That “network notion” of constituents is how we define it in one industry and will see it in other industries.
Q. Integration is a top area of interest for ASUG members, as uncovered in our most recent Pulse of the SAP Customer research findings. How do you approach this topic within your role, and how would you discuss the importance of integration to digital transformation and the maturity of SAP customers?
A. Integration is not only SAP to SAP. Integration goes hand-in-hand with openness. We're of course all in on integration inside SAP; everyone knows there have been improvements on the user experience side, on the integration side, and on the data ecosystem that usually lies underneath. But I think integration is just one side of the coin. The other part is openness. That's why the SAP Integration Suite is part of SAP BTP. We want partners to use the same technology. We want them to extend the technology, on the right terms, with a whitelisted API, because then they can build a lot of IP on top. That’s why integration goes with openness.