SAP SE is taking a significant step into generative AI to help companies get more value from managing spending and supply chains.
The move is timely. It puts the global software company into a broad market push to help businesses facing supply chain challenges capitalize on AI advantages in procurement and supply chain activities. SAP provides widely used business operations software.
“GenAI is being embraced and adopted at a rapid scale, including in procurement,” says Jeffrey Rajamani, a senior analyst at Forrester Research. He covers procurement and sourcing technology and strategy. “It’s good to see that SAP has joined the bandwagon in bringing GenAI innovations in spend management. Sourcing and procurement functions in organizations are being disrupted, as the C-suite is tasking them with more strategic imperatives.”
SAP announced at its Connect Live event in Vienna, Austria, this week that it will soon make available procurement software applications embedded with GenAI to help procurement professionals.
The new SAP GenAI applications will help to:
- More quickly build comprehensive product categories through SAP Ariba Category Management.
- Improve spend management to identify cost-saving opportunities and more efficient purchasing practices through the SAP Spend Control Tower application.
- Expedite how they assess the risk of dealing with new suppliers through SAP Ariba Sourcing, SAP Ariba Contracts and SAP Ariba Buying software as AI helps to uncover suppliers’ reputations related to product quality and delivery service.
- More quickly identify new suppliers that meet their purchasing requirements related to product specifications and other criteria through SAP Ariba Sourcing. SAP recently integrated Ariba Sourcing with Scoutbee Discovery, an AI-powered supplier search application.
Last month, SAP announced its release of Joule, a natural-language, generative AI tool it describes as a GenAI copilot. SAP will embed it into its applications for:
- Supply chains
- Customer experience
- Human resources
SAP says Joule is designed for “quickly sorting through and contextualizing data from multiple systems to surface smarter insights.”
Joule has almost 300 million enterprise users around the world working regularly with cloud solutions from SAP, says SAP CEO Christian Klein.
And it “has the power to redefine the way businesses — and the people who power them — work,” Klein says.
SAP has room to grow with AI applications
When it launched Joule, SAP noted how a company might use it to check the cause of a sales decline.
“Imagine, for example, a manufacturer asking Joule for help understanding sales performance better. Joule can identify underperforming regions, link to other data sets to reveal a supply chain issue, and automatically connect to the supply chain system to offer potential fixes for the manufacturer’s review.”
Rajamani says SAP is off to a good start with AI-powered send management, which Forrester refers to as “supplier value management” or SVM. But he suggests it has room to grow with AI.
“While SAP seems to have addressed the supplier discovery, spend analytics, risk management and expense management parts of SVM, there are other areas where I think the demand for AI/GenAI has exploded exponentially: contract life cycle management and procure-to-pay,” he says. “It would be good for SAP to think through these important components, too, such as a GenAI bot to negotiate contracts.” (Procure-to-pay software manages and records commerce activity from the point a buyer begins the procurement process through payment.)
SAP conducted its Connect Live event Oct. 9 to 11. It did not immediately return a request for additional comments about its AI plans.
Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].
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