Few individuals are as qualified to speak to the cloud momentum and embrace of generative AI that have defined SAP’s recent strategy as Thomas Saueressig, Member of the Executive Board of SAP SE, leading Customer Services & Delivery.
Saueressig is responsible for ensuring long-term customer value in the cloud and has previously held various key positions across the organization, including Chief Information Officer (CIO) and global head of IT services, since first joining SAP in 2004. Prior to his most recent appointment, Saueressig led the SAP Product Engineering Board area and was responsible for the entire SAP application portfolio.
In his current position, Saueressig oversees all business areas in customer services, in addition to cloud infrastructure, cloud operations, cloud lifecycle management, and private cloud delivery for SAP’s global customer base. In Orlando for the SAP Sapphire & ASUG Annual Conference in June, Saueressig sat down with ASUG to contextualize key announcements from the keynote stage.
In our conversation, Saueressig discussed new consulting and ABAP development capabilities for Joule, an expanded partnership with NVIDIA, recent evolutions of RISE with SAP, and the combination of SAP Signavio, SAP LeanIX, and SAP Cloud Application Lifecycle Management into an integrated tool chain for business process transformation.
This interview has been edited and condensed.
With generative AI center stage at SAP Sapphire this year, I’m curious about your current position on AI as a catalyst for cloud ERP adoption. Specifically, how will the consulting and ABAP development capabilities for Joule—and the announced strategic partnerships with NVIDIA and others—accelerate cloud adoption?
First and foremost, what you see with the consulting and ABAP development capabilities for Joule we have announced is that both will dramatically accelerate time-to-value and decrease the total cost of implementation. Now, with Joule, you have a certified consultant with all the knowledge of SAP in one co-pilot. That will radically accelerate the implementation and configuration efforts in a project, and we’re interested in showing our customers how to leverage AI to reduce the time spent and total cost of implementation so that our customers can focus more on innovation and get to those benefits and outcomes quicker. Both announcements are strategic for us in that sense. This is how we help our customers to accelerate their innovation function.
SAP Business AI is embedded across the entire portfolio, including Joule. That’s of value to our customers. Announcements, including our NVIDIA partnership, come into play when we consider that, at the end of the day, AI is only as good as the specific data in a specific business context, and that’s where we feel we can differentiate ourselves from our competitors. We leverage the best technology partners on this planet: OpenAI, Anthropic, Cohere, Vertex AI from Google Cloud, IBM, NVIDIA, Aleph Alpha, and Mistral. Basically, we have all the best LLMs and the best technology languages to do retrieval-augmented generation (RAG) and have fine-tuning capabilities. Then, we bring in our specific data. That’s the key.
If you think about business processes, we know exactly where the user is in their process, the exact context, but we also have all this proprietary business data from the customer, and so we’ve pre-trained our foundational model with customer data. It’s not a large language model, because it’s not built on unstructured text. It’s a foundational model, based on tabular data, based on our database tables, anonymously retrieved from thousands of opted-in customers, which means you have the wisdom of the crowd as well as the business context. And this is a super strong proposition. With NVIDIA, one of the key aspects will be how we use NVIDIA capabilities to fine-tune that model, to make it super specific with relevant business data.
In the ASUG member community, the top concerns around business AI included data privacy and security, as well as data accuracy and use case sharing. How is SAP moving to address these fairly fundamental concerns about AI?
The good news is that SAP is not just starting out with AI. We have a long history with AI. We’ve already delivered over 60 generative AI use cases since Q4 2023 and more than 100 will be available by the end of this year. Having said that, the topic around security, data protection and privacy, and ethics is not new to us from an AI perspective.
Since 2018, we’ve had an established AI ethics steering committee at SAP, internally and externally. In 2022, before the hype of ChatGPT, every single SAP employee needed to sign our AI ethics policy. We have mandatory AI ethics training for all of our employees on a yearly basis. We take those concerns seriously. That’s not new to us.
We follow an ethical approach to AI. We were even part of the consultation with policymakers for the EU AI Act. We are highly interested because we know that, ultimately, for AI to scale with end users, they need to trust AI and also trust that their data is not going into global models and is not shared. It is protected; they can be sure of that.
That’s exactly what we do with our architecture. We fundamentally make sure that whatever our customers do with SAP’s AI use cases, they will not dilute any global models. We also have a lot of means for anonymization, masking, encryption, and the like, which is part of our core AI technology stack.
Human-in-the-loop is a key component, as well. That is one of the core principles we have followed since our AI Ethics Policy was established. We have the human-in-the-loop concept for all of our AI cases because that’s part of our value system in the industry with regard to protections, and it’s just an important part of our philosophy as a company.
At SAP Sapphire, SAP announced a new scenario for customers to transition from SAP ECC to SAP S/4HANA Cloud, private edition: a “lean selective data transition scenario” in SAP Business Transformation Center that will assist with eliminating unnecessary legacy data and helping customers to build a clean data foundation. What business drivers led SAP to establish this scenario, and how do you see it fitting into the overall cloud movement?
We saw a couple of years back that we needed to help our customers accelerate their migrations to SAP S/4HANA. As you know, there are multiple ways to do that, and you have all the color coding, from greenfield to brownfield to bluefield—pick a color!
At the end of the day, we saw high appetite from our customers migrating to SAP S/4HANA in using a basically code-by-code, fresh, greenfield SAP S/4HANA system, but leveraging data from their existing source system to move data, through a selective data transition case, into their greenfield application as part of an SAP S/4HANA project. We saw the need for a very simplified, lean scenario to do that, and that’s the reason why we built the SAP Business Transformation Center on the SAP Business Technology Platform, which we recently announced, as general availability for the selective data transition.
We need to help our customers migrate, but it’s also important to explicitly mention that this does not mean we believe this scenario is the only way to do that. Especially for more complex scenarios, we heavily rely on our partners, and we have a lot of partners with selective data transition tooling in the market, like cbs Corporate Business Solutions and SNP, who have highly sophisticated means for doing this in the most complex ways. We still rely on partners for complex cases but, especially for some midmarket cases, we said that we wanted to have a very simplified lean offering to a quick acceleration of migration, with selective data transmission as part of the business transformation.
It depends on the situation. What we see is a lot of two-tier scenarios; a lot of companies will move their headquarters’ system to the private cloud, then approach their subsidiaries and acquisitions with a public cloud implementation. That’s also a trend we see significantly in the market quadrant.
With RISE with SAP and GROW with SAP both evolving since these services were first launched, how is SAP working to build more flexibility into both programs, and what do you see of the importance of that flexibility for driving customer adoption?
To your point, after the inception of RISE with SAP in 2021, we significantly enhanced and evolved the program, based on the learning we did with customers. We have more than 6,000 RISE with SAP customers. We have gathered many more learnings about what is required and what makes such journeys more successful.
At the beginning of the year, to that end, we launched the RISE Migration and Modernization Program, as one means. What we’ve discussed at SAP Sapphire is the concept that we have even further evolved the RISE with SAP transformation journey by investing in enterprise architects as part of the offering; we will also invest into an integrated tool chain from SAP LeanIX, SAP Signavio, and SAP Cloud Application Lifecycle Management (CALM). We are bringing it all together in a fully integrated end-to-end toolkit to help our customers on their business transformations, hopefully accelerating the transformations but also giving our customers support to do all of that.
Flexibility is super important for us. We absolutely want to acknowledge the individual journeys, especially for our long-standing customers who go into a private cloud. They all come from different setups. I have a customer who basically moved 134 ERP systems through RISE. We have customers with a single instance. We have customers with millions of lines of custom code. We have customers who are very close to the clean core. And that’s important for us: To support all individual journeys the best we can, leveraging our capabilities and our tooling to support our customers.
That’s why this flexibility in RISE is super important. We also acknowledge some customers have specific operational excellence requirements and we – with RISE with SAP – have the means to facilitate all of them. That’s the reason why we’re so excited to see phenomenal growth in RISE and its acceleration of cloud revenue. Based on that, we think we hit a nerve and met the demand of our customers with the RISE program, as well as with GROW with SAP, especially for two-tier scenarios, in the midmarket, for scaleups, and for startups. That’s certainly an amazing way to accelerate cloud transformation.
Your board area is focused on customer adoption, and cloud adoption is one major part of that. What’s your approach to assisting SAP ECC customers who are not able to get to the cloud and SAP S/4HANA on-premises customers who moved before this shift in strategy?
SAP S/4HANA customers have a different maintenance timeline than SAP ECC customers, and, on that point, we need to be specific. For SAP ECC customers, the end of mainstream maintenance will be 2027, and extended maintenance will end in 2030.
With the RISE Migration and Modernization Program, we want to accelerate their move to RISE. We also have the means through that program to increase the upgrade capabilities for our SAP S/4HANA customers, who moved to on-premises. We want to recognize that those customers strategically did the right thing. We appreciate it, and that’s why through those credits, they can save essentially 50% of the costs. We have financial incentives in that program meant to support our customers, because they invested in the SAP S/4HANA program and did exactly the right thing. Now, we as a company want to help them so they can also move to the cloud with that program. It’s a very purpose-driven program. We’re also recognizing the different circumstances of our customers, where they are and what we can do.
You mentioned earlier the combination of LeanIX, Signavio, and CALM as an integrated tool chain for business process transformation. Tell me more about your excitement for that.
Absolutely. I mean, for me, this is about putting all the pieces together. And I think that our customers now also see that coming together: The acquisition of Signavio for process insights and process management, of LeanIX for enterprise-architecture landscape management, of Cloud Application Lifecycle Management for run-operations and implementation components.
We have bi-directional integration from LeanIX to Signavio and from LeanIX to Cloud ALM. It’s an entire circle, a continuous optimization cycle, which customers need in a continuous way to evolve and continuously optimize their systems landscape. That’s why we are in the process of fully integrating the tool chain. We want to leverage these capabilities, along with the benchmarks and the data we have from our customers, to be able to show our customers what their peers are doing, to show them how they can do more.
We also want to leverage, for instance, Signavio and LeanIX to show our customers they will unlock more opportunities to leverage AI through this tool chain; our AI capabilities will be part of this suite, so we can also do more active recommendations for our customers, as part of their continuous evolution cycles, as to how they can embrace more AI.
Given your board area’s focus on adoption, what have you observed of cloud adoption challenges thus far among SAP customers? How can they avoid some of the more commonly encountered pitfalls?
First of all, I’m excited about all the customer conversations. There’s certainly a huge excitement in the market about what we can do together, not only with cloud but also by leveraging our opportunities with AI. Customers are eager to explore our capabilities there, so that’s a huge point of excitement. For me, as a former product engineer, it’s the greatest joy to bring our innovations to the customers who see them live and adopt them. It’s been an amazing first couple of months.
With regard to pitfalls, we need to fight against the belief that the move to the cloud is a technical lift-and-shift approach. At the end of the day, it's a huge opportunity for continuous innovation. We need to help our customers to make continuous innovations or enact business transformation, which is a continuous cycle of work.
In this ever-changing market, it’s even more important to have this agility. That also comes from our end-to-end portfolio. RISE and GROW are core components, along with leveraging SAP BTP as the central platform for all integration extensibility, but we should not forget the modular approach of our entire portfolio – with SAP SuccessFactors, with SAP Ariba, with SAP Concur. With that speed and agility, we really can drive more innovation across all of these estates.