Recently, we had the pleasure of attending the SAP Sapphire Conference 2024 in Orlando, where we witnessed the latest and greatest in SAP innovations and planned developments. Conversations with colleagues, clients, experts, and innovators consistently and predictably revolved around the topic of AI—current state and future applications. Presentations were rife with the phrases “The possibilities are endless” and “You could…” as teasers to the manner in which AI will alter the state of how we will operate in the corporate environment going forward. We are not convinced that the possibilities are truly endless (that seems overly ambitious), but the case was effectively made that the revolution is underway—as part of a technology super bloom—and this may be a decisive moment for companies to determine how they are going to position themselves with AI-enabled solutions.
Focus on Purpose and Structure
Getting exposed to the latest AI developments and uses can be inspiring, motivating, and perhaps even intimidating. Digital Transformation. Transformational Growth. Spatial Computing. AI-Powered. Strategic Digitization. Transformation Journey. All the AI initiative project names are very impressive sounding. One key observation among all this AI advocacy was how important it is for companies to ground themselves in business purpose and function and not get overly romanced by initiative titles. There is a trap in being captivated by a technology without truly solving the problem through implementation of the technology. Critical success factors will include aligning the AI strategy to corporate strategy, defining the problem(s) to solve, aligning the nature of the work (transactional, customer-facing, analytical) to the solution, and measuring results. A further “must have” in leveraging AI solutions is the development of a data-driven operating model and an effective and centralized data strategy that creates the proper linkages and business relationships among data elements.
AI Trends in Shared or Corporate Services
The application of AI in shared or corporate services is already significant and is rapidly expanding. For example, in the Human Resources (HR) space alone, SAP delivered 38 capabilities in 2023, and an additional 46 capabilities are to be delivered in 2024. The combination of Joule (SAP’s natural language generative AI copilot) and other generative AI developments will support performance reviews and developmental goal generation, benefits and compensation questions and discussions, payroll, time management, reward and recognition, central employee information, and more.
In supply chain and procurement, AI assists in guided buying, category plan development, risk management, spend cleanse, replenishment optimization, goods receipt processing, visual inspections, Scope 3 emissions data capture, and many other activities.
In the accounting and finance space, companies are deploying AI solutions to address working capital efficiencies, accounting and financial close, compliance optimization, travel and expense challenges, auditing, forecasting, budgeting, and planning. There are very few, if any, processes that are being reconsidered or redesigned without the deployment of AI. However, the examples of AI-enabled finance seem to be projections versus operational capability available today. For a deeper dive on AI in finance, follow this link for additional ScottMadden thoughts and analysis.
Where Should a Company Start?
The AI landscape can be intimidating. Although it is full of very real and important business applications, and most leaders would agree that the fit of AI in their operations needs to be considered, there is another trap there. Do not start with “I have AI and we should do something with it.” Instead, first determine the outcome you are striving to achieve and construct a thoughtful technology strategy to support that outcome. Do not hesitate to think big and audacious—consider the needle-moving results that can drive significant, positive impact to the business.
Meet with ScottMadden
Now is the time for companies to assess their current technologies and their effectiveness in servicing stakeholder needs. Take an objective look at the effectiveness and value of systems and applications supporting the business, particularly in shared or corporate services. Discover overlapping or outdated applications. Identify technologies that are no longer fit for purpose in the current business environment. Assess these technologies with a strategic mindset—do they meet your financial, operational, and service requirements?
Companies can leverage a ScottMadden assessment to develop a forward-looking technology strategy for supply chain, accounting and finance, HR, and other corporate or shared services. A further deliverable from the assessment is an implementation roadmap to guide the timing of potential technology enhancements and ensure that the approach is aligned with enterprise-wide technology deployments and objectives. For example, we engaged recently with an energy company maintaining more than $100 billion in assets to comprehensively evaluate its supply chain technology. We teamed with the client to incorporate the needs of key stakeholders in supply chain, IT, engineering, operations, and maintenance to develop an integrated roadmap with a compelling business case. This roadmap achieved the buy-in of these groups by coordinating business needs (our starting point) with plans for enterprise technology. The strategy included significant opportunities with supply chain technology and AI applications across source-to-pay, warehousing and logistics, and customer service to be implemented in a major transformation over the next several years.
If you are interested in learning how to effectively incorporate AI and other technological advancements into your business to improve outcomes for all your stakeholders, please reach out to us.
