A delayed delivery rarely stays in one part of a business. It can disrupt production, postpone a launch, affect a customer commitment, and change a financial forecast.

The signal may appear in one transaction or document, but the response depends on context from several functions. Which orders are affected? What alternatives are available? Who needs to act and what should happen next?

Why context matters

This is the role of Industry AI: applying artificial intelligence to industry-specific business data, processes, and expertise so people can move from a signal to an informed action. SAP Business AI Platform supports people in the applications they use every day. Industry AI extends that foundation across the workflows and decisions that matter in a particular industry.

The same event can mean something different in manufacturing, retail, or global trading. A change in demand can affect planning, procurement, and production. A delivery date can influence revenue forecasts and customer commitments. AI becomes more useful when it can recognize these relationships and work with the people who understand them.

People define objectives and guardrails and remain in control. AI assistants, agents, and intelligent applications can help analyze complex situations, bring together relevant information, and coordinate next steps. The value is not only faster execution of an individual task. It is the ability to connect decisions across the business.

How context turns into action

ITOCHU Corporation, a global trading company, is working with SAP to apply AI to financial processing for complex trading transactions. The initial use cases bring together information from transaction documents and related business activities so finance specialists can determine the appropriate accounting treatment more efficiently.

One example is intelligent general ledger posting for raw-material transactions. The solution helps identify the relevant general ledger account and commission information, including the context required for different transaction models. This makes the first step concrete: use AI where a defined process contains repetitive work, complex business rules, and a clear need for context.

The approach keeps the human role clear. Finance specialists review and guide the result, while AI helps prepare information and reduce manual effort.

Beyond a single process

The opportunity extends beyond one finance process. ITOCHU and SAP are using the initial implementations to explore a broader Industry AI approach for the trading industry. Trading companies connect suppliers, customers, products, logistics, contracts, and financial outcomes across business units. An AI capability that understands one process can create a foundation for connecting the next.

SAP brings enterprise applications, business data, process knowledge, and AI together. In collaboration with customers and industry experts, SAP uses that foundation to develop capabilities around the outcomes and requirements of a specific industry. Lessons from customer projects can inform solutions that are repeatable and scalable, while the original customer context keeps the work grounded in actual business needs. That is how SAP can turn an individual customer use case into a foundation for future industry capabilities.

From use cases to Industry AI

This approach will be discussed at SAP Connect in Las Vegas from October 5-7, 2026. At the Finance Connect keynote, “Autonomous Finance: From road map to reality,” ITOCHU Corporation will share how its initial AI use cases can support an Industry AI initiative across the trading business. The session will be available in person, live online, and on demand.

AI should be measured by more than the quality of a single answer. Its real value lies in helping people understand what is happening, decide what matters, and act across the business. That is how the value of AI multiplies: insight creates clarity, and action creates impact.

Andre Bechtold is president of SAP Industries & Experiences and chief revenue officer of Industry AI at SAP.

This year marks the fifth consecutive edition of Economist Enterprise’s Procurement Imperative research, sponsored by SAP. The latest study, Procurement at a Crossroads: From Optimism to Realism, surveyed 2,648 C-suite executives across 23 countries and examines how procurement leaders are responding to pressures ranging from cost control and geopolitical volatility to the rapid advance of artificial intelligence.

The anniversary offers an opportunity to look beyond any single year and consider how procurement has changed since the first year of this survey in 2022. What stands out is that the function has not followed a simple path from tactical to strategic. Its mandate has broadened, but so has the expectation to prove its value: control cost, anticipate risk, strengthen supply continuity, and turn technology investment into measurable outcomes.

Five takeaways from the research help show where procurement has been and where it may be heading next.

Takeaway 1: cost never left the job description—but it’s now more important than ever

In 2022, procurement leaders were still operating in the shadow of the pandemic. Supply chain risk ranked as the leading organizational risk, while COVID-19 disruption was the top driver of digital transformation.

As conditions changed, procurement’s agenda expanded to resilience, visibility, supplier diversification, and digitalization. But cost never disappeared. In 2022, cost savings led the areas where respondents believed procurement could deliver greater value. In the 2026 study, 54% of executives identify cost savings and optimization as procurement’s primary contribution to the organization. The line of questioning is not directly comparable year over year, but the broader pattern reveals that a more strategic mandate has not lessened the importance of financial discipline.

That is not a retreat. Modern cost management requires understanding demand, supplier economics, working capital, risk, and the operational consequences of commercial decisions. Procurement’s cost mandate has become more sophisticated, not less important.

Takeaway 2: digital transformation has moved from funding to execution

One of the clearest changes is what now stands in the way of transformation.

In 2022, budget was the leading barrier to digital transformation at 30.2%. By 2026, it dropped to fourth on the list, as ease of deployment became the primary concern of 71.7% of executives, a category that did not exist as a response option in 2022. Budget still matters, but it is no longer the defining obstacle.

Procurement spent years making the case for technology investment. The conversation has moved past “Can we afford it?” to “Can we actually implement it?” Procurement leaders are now challenged to embed technology across real processes, data environments, and organizations.

The motivation for transformation has also shifted. In 2022, pandemic disruption was driving both preparation and investment. Today’s expectation of flat-to-cautious growth is more structurally normal, but the pressure to do more with less remains a constant. The question for today’s procurement teams is whether they can deploy new technology effectively enough to generate repeatable business value.

Takeaway 3: AI has raised both the opportunity and the standard

The latest findings make the scale of the AI shift unmistakable. Sixty percent of executives name digital transformation as procurement’s top strategic priority for the next 12 to 18 months, up from 38% in 2025, with agentic AI emerging as the most sought-after near-term technology.

But enthusiasm is now accompanied by greater scrutiny. As AI enters category management, intake, sourcing, and other workflows, procurement leaders need to be clear about the business outcome being improved, the data required, and the controls governing how AI acts.

The five-year view shows how quickly expectations have advanced. In 2022, digital technology broadly led the category-management improvement agenda at 35.8%. By 2023 and 2024, priorities had grown more specific, centering on cost analysis, scenario planning, and data quality. By 2026, AI-driven and predictive insight is the dominant category-management priority, cited by 66.6% of respondents.

Technology is shifting from helping procurement professionals find information toward helping them interpret choices and execute defined tasks. As that happens, the value case must move with it—from access to information toward measurable improvements in decisions and outcomes.

Takeaway 4: strategic influence is becoming more operational

For years, procurement leaders have talked about earning a “seat at the table.” But the research suggests that where procurement sits on the organizational chart may be becoming a less useful measure of its strategic influence.

In 2022, the COO was already the largest procurement reporting line at 33.5%, with the CFO close behind at 29.3%. By 2026, the COO share has risen to 44%, while the CFO share stands at 24.4%, and reporting lines to the CEO have declined from 18.8% to 15.7%.

This suggests that procurement’s strategic relevance is increasingly expressed through operational execution. Influence comes from improving decisions across cost, supply, risk, and technology—not from where procurement appears on an organizational chart.

The results across recent years reinforce that shift. In 2023, 53% of executives agreed that procurement effectively collaborated with the rest of the organization to meet the company’s vision. That rose to 75% in 2024 and 90% in 2025, pointing to growing integration between procurement and the wider business.

That growing integration does not necessarily mean procurement has secured a permanent strategic role. In 2024, 70% of executives said procurement was actively involved in developing the wider organization’s digital transformation strategy, although only 18% strongly agreed. By 2026, executive confidence in procurement’s influence over digital transformation had fallen to 68%, down from 91% in 2025.

The contrast is telling: procurement is becoming more integrated with the business, but greater visibility does not automatically translate into sustained strategic influence. A seat at the table matters less than what procurement delivers once it is there.

Takeaway 5: the skills equation has changed

Technology is not the only thing procurement teams have had to reinvent. The capabilities required to use it effectively have changed just as quickly.

In 2022, skills gaps were relatively dispersed across technology (34.6%), category knowledge (32.0%), risk management (26.8%), and customer experience (25.6%). By 2025, AI proficiency and ethics had emerged as the leading skills priority at 68.2%, far ahead of more traditional procurement competencies at 34.1%.

But there is another part of the skills picture that deserves attention. In that same 2025 research, curiosity was prioritized by just 10% of respondents. That stands in contrast to what I continue to hear from procurement leaders, who increasingly describe curiosity as one of the skills that will separate the teams that thrive in the AI era from those that merely use the technology.

Traditional procurement expertise is not obsolete. If anything, more capable technology increases the value of professionals who understand categories, suppliers, markets, and organizational change. AI fluency on its own is not enough. As technology takes on more work, professionals need the curiosity to question outputs, challenge assumptions, explore what is changing in a market, and bring business context to the decisions technology helps inform.

The opportunity lies in combining deep commercial knowledge with greater AI fluency. The procurement professional of the next five years will need to know not only how to use new tools, but when to challenge their outputs, how to apply business context, and where human judgment still matters most.

The next chapter is about proof

Five years ago, procurement transformation was heavily shaped by external shocks. Today, organizations are making more deliberate choices about AI, analytics, talent, and operating models while being asked to deliver savings, manage volatility, and improve productivity simultaneously.

The next chapter is about forging a clear connection between strategic and cost value, and between human expertise and AI capability. Five years of research suggest procurement has earned a broader role. The next five will be about proving what it can do with it.

Gordon Donovan is global vice president of Research, Procurement, and External Workforce at SAP.

AI agents are writing code and translating legacy applications for use in the SAP cloud. Sonja Liénard, head of ABAP platform at SAP, explains what this means for the ABAP programming language and ABAP platform.

In an interview, Liénard talks about the evolution of SAP’s proprietary programming language and ABAP platform, and discusses what the innovations announced at SAP Sapphire will mean for customers.

Q: In our first conversation, you explained what ABAP is, what the future looks like, and why agentic AI will change the market. Let’s start from there and then dive deeper. How does ABAP interact with other development technologies in today’s SAP landscapes?

Sonja Liénard: ABAP has been around for over 40 years and has been evolving ever since. With the era of agentic AI, we are now reaching the next stage of that evolution. The modern version of the development model is ABAP Cloud, which has been developed from the outset according to the guiding principles of openness and comprehensive support for the business logic.

We have robust, well-defined APIs that are interfaces to the outside world and offer a full environment with Open Data Protocol (OData) services, modern front ends, and an integration layer. This enables the development of modern web applications. This is in addition to SAP Business Technology Platform (SAP BTP) extensions and an external system like SAP Integration Suite, which can also be integrated.

We currently use Eclipse as a development environment. Starting in Q2 2026, ABAP development tools will also be possible in Visual Studio Code, which is a milestone. The community was quite vocal in requesting this and it was an open door for us. Visual Studio Code is gaining ground and is currently the preferred IDE (integrated development environment) for many developers. Many AI extensions on the market being optimized for it first.

We have redesigned the architecture and are pursuing an open IDE strategy where we can also offer further IDEs for ABAP development. By opening it up, we now have a rich third-party ecosystem that we can leverage for AI, such as GitHub Copilot and Amazon Q.

In addition, we have published an ABAP MCP (Model Context Protocol) server that lets ABAP developers benefit from the entire AI tooling and ecosystem. This is a major, important step and an impressive example of interoperability. Furthermore, we can still rely on the strength of ABAP business logic. With this approach, we are combining the open IDE strategy with a high rate of innovation.

You mentioned the ABAP MCP server. What is that exactly?

Liénard: MCP stands for Model Context Protocol and is an open standard for AI agents to interact with external tools and systems in a structured manner. It is a universal language that AI agents use to ask questions, trigger actions, and retrieve results.

The ABAP MCP server provides ABAP development capabilities based on this protocol. Any agent that supports MCP can interact with ABAP code and our ABAP systems in an intelligent, agent-driven approach. It is a new channel through which we can make our ABAP-specific capabilities available to the outside world.

The ABAP MCP server is an important building block for everything related to agentic AI and an important technical foundation for our new Custom Code Assistant for SAP S/4HANA transformation. The ABAP MCP server for Eclipse is available as of Q2 2026.

What are the risks of using AI in SAP enterprise systems and how do you address them?

Liénard: The entire AI market is incredibly dynamic, fast-paced, and characterized by different interests. As such, we need to carefully examine which solutions are durable, robust, and trustworthy enough to run the world’s business processes. We want our solutions to remain secure, compliant, and true to everything SAP stands for.

We must put our core mission at the heart of all decisions. ABAP platform is known for its ability to run large enterprise business. Our customers and partners trust this capability The AI solutions on the market do not qualify for this through their ability to build short-lived solutions, but instead by supporting our core capabilities. That’s why it helps to take a step back, look at the big picture, and make sustainable decisions, but also to remain open to revising past decisions in response to major shifts in the market.

The second point is the accuracy of the code. AI can generate seemingly plausible code that contains subtle errors. To counter this, we rely on a combination of human review and thorough agent testing, keeping humans in the loop at every critical step. AI agents handle the quality checks and validation, with developers making the judgement calls.

Another risk is the loss of business logic during the transformation. We want to help our customers migrate their legacy applications to modern solutions. We are developing custom code management agents for this purpose. The first was released in June. It is crucial for our customers and partners to retain their business logic during the transformation.

Lastly, security and data protection are central topics. AI models always need context to be effective. In the enterprise environment, this context can contain sensitive business data. That’s why we are taking a very careful approach: ABAP AI services only operate within established SAP compliance and trust frameworks, for example. Customers always have control over what is shared and what isn’t.

Let’s talk about SAP Sapphire in 2026. What innovations from your area were presented?

Liénard: SAP Sapphire is also a very important conference for ABAP AI. In Q2 2026, we published the first release of the ABAP development tools for Visual Studio Code, initially in the ABAP Cloud scope including SAP Fiori app development and with integration of GitHub Copilot and Amazon Q as AI solutions. Another goal is to support classic ABAP development in Visual Studio Code; additional ABAP object types will follow throughout the year. Also, as of Q2 2026, the ABAP MCP server for Eclipse and Visual Studio Code are generally available to connect third-party solutions, particularly AI-specific third-party tools, to the ABAP system.

We also delivered the first Custom Code Assistant in Q2 2026. The feedback is promising. This enables us to automate and accelerate code migration significantly. In this approach, all communication between legacy migration tools and new agents will take place through an engagement layer. Our overall migration strategy, which we presented at SAP Sapphire, comprises seven different agent families across all phases of a migration project, from planning to execution.

Smaller customers and those with older system versions often found it difficult to access AI tools. What is changing here?

Liénard: The barriers to entry are getting much lower. We are switching from users-per-month billing to a usage-based model. Billing will be according to actual usage, based on “AI units” with individual prices. This will help make it easier to use our AI solutions. Customers will be able to better plan how much they want to spend on AI solutions.

In addition, as of Q2 2026, we introduced a side-by-side service that enables the use of all AI solutions, regardless of release. The availability of ABAP AI will be expanded to include SAP S/4HANA Cloud Private Edition for all releases from 2021 and later. This enables us to support most of our customers with AI capabilities, even those that have older releases.

How do ABAP and AI agents fit into SAP’s longer-term product vision?

Liénard: We are following the overall SAP strategy, of course. It was apparent at SAP Sapphire that agentic AI is the new theme. In the past, we had Infrastructure as a Service, Platform as a Service, and Software as a Service. Agentic AI solutions are now being added.

I like to use three concentric circles to describe our vision: ABAP Cloud is at the center, as the modern, clean-core variant of our language for long-term stability. The second circle is the ABAP AI layer: developer tools for code explanation, code generation, and ghost texting. The outer circle is comprised of AI agents, a network of specialized agents for complex and multi-step tasks such as transformation, migration, and quality validation. They can also take on development tasks, however, significantly reducing the required effort. This can free up time for decisions regarding business logic and architecture, as well as for verifying quality.

The circles coexist and reinforce each other. The fundamental orientation of the platform and the core of the solutions remain stable. Agents and AI skills complement this in the best possible way.

What milestones should customers and partners pay attention to?

Liénard: There are four main milestones. The development environment for Visual Studio Code and the MCP server were released in Q2 2026. This enables the development of AI agents in an open IDE ecosystem. We released the first agent for the custom code migration strategy in Q2 2026, along with the extension of ABAP AI to include SAP S/4HANA Cloud Private Edition release 2021 and later. A second agent for clean core transformation is planned for Q3 2026. And we will continue to develop multi-agent orchestration and add more agents to the portfolio in the course of 2026.

Do you have any other takeaways to share?

Liénard: Development should be seen as an opportunity. It’s all about development and collaboration. ABAP and developers remain a strong team. AI will not change anything here. ABAP has a long track record of successful reinvention. AI is just the next chapter, taking over routine tasks and creating freedom for what creates value: knowing your business, making architectural decisions, providing high quality, and meeting security and compliance requirements.

Customers and developers can trust SAP’s AI to be implemented reliably: with a clear road map and high quality, security, and compliance standards that are critical for enterprise systems. We work closely with the community and our customers and partners. That is a key success factor.

This year’s SAP for Energy and Utilities Conference, held in Toulouse, France, marked a notable first: the inaugural presentation of the Energy and Utilities Innovation Award. Companies whose projects stood out were honored in the categories AI, Innovation, Transformation, Customer Experience, and Best Team.

AI as a key element

In the AI category, the Austrian energy company OMV prevailed with its SAP Business AI transformation project. Building on an existing SAP S/4HANA landscape, the transformation focused on intelligent automation, advanced analytics, and AI-driven decision-making in core business processes. A key factor for success was a step-by-step approach: instead of a hasty implementation, OMV first laid a solid foundation and introduced AI in a targeted manner into the user experience and business processes. The focus was on regulation, security, and continuous evaluation. The clear principle was to standardize, integrate, and establish a stable data foundation before it scaled more broadly. Early in the process, the company relied on Joule in SAP SuccessFactors solutions and SAP S/4HANA. In the next step, the transformation will continue so OMV can make even greater use of AI.

Intelligent water supply

With a data-driven platform for monitoring its water network, the Belgian water utility Farys was recognized by the jury in the Innovation category. With the help of SAP technology and AI, the utility can now deploy resources more efficiently and optimize its processes in a targeted way. Water leaks can be detected early before greater damage occurs, water quality issues can be predicted, and energy consumption can be reduced. The result: less downtime, lower repair costs, and a noticeably better quality of service. Having a unified solution also fosters cross-departmental collaboration by breaking down existing data silos. In the future, risk assessments for pipelines and facilities will be integrated, and data-driven decisions will help determine where repairs will have the greatest impact. With this strategy, Farys is preparing its infrastructure for the demands of climate change.

Achieving goals through teamwork

E.ON UK won the Best Team category with its SAP S/4HANA transformation project. With its group-wide project running from 2021 to 2027, the company aims to standardize processes and build a future-proof, scalable IT landscape. The central challenge was to consolidate various legacy systems in a highly regulated market. What sets this project apart is the close collaboration between the company, IT, and external partners. The company used workshops, road shows, and a targeted key user network to focus on team culture and cohesion from the very beginning. The result is not only a successful technical transformation, but above all a lived team culture—a key factor to the project’s success.

A new data foundation

In the Transformation category, Electrica Furnizare came out on top. The starting point was a fragmented system in which data was scattered and an overarching overview was missing. The company’s existing infrastructure was neither scalable nor able to respond flexibly to growing regulatory and customer requirements. With the introduction of SAP S/4HANA combined with SAP Business Technology Platform (SAP BTP), SAP Customer Experience solutions, and SAP Business AI, Electrica Furnizare achieved one of the largest transformations in the utility sector. The result: a single, reliable data source for all departments, end-to-end optimized processes, and a solid foundation that paves the way for future innovations and the full deployment of AI capabilities.

Better customer service through comprehensive modernization

Loudoun Water’s far-reaching modernization project won the Customer Experience category, with the company using SAP S/4HANA, SAP Service Cloud 2.0, and SAP SuccessFactors solutions to optimize its processes. With the introduction of SAP Service Cloud 2.0, Loudoun Water is the first utility company worldwide to take this step. The effort paid off: customer service is faster and more modern, work orders are better organized, billing and payments are managed more efficiently, and time tracking for employees has been simplified. The migration was carried out in a single, coordinated step, creating a future-proof, scalable foundation on which Loudoun Water can further expand its position as a technology leader in the industry.

Innovation as a driver of the energy transition

The winners of the first Energy and Utilities Innovation Award demonstrate the wide range of possibilities through which companies in the energy and utilities sector are actively shaping digital transformation. Whether AI-driven decision-making processes, intelligent infrastructure monitoring, or a consistent realignment of the IT landscape, all the projects have one thing in common: they rely on solid foundations, step-by-step implementation, and close collaboration among all stakeholders. Melanie Fiolka, go-to-market & community engagement lead for Utilities at SAP, summarizes it as follows: “The energy and utilities industry is undergoing profound change. The winners of the first Energy and Utilities Innovation Award demonstrate how vision is turned into tangible value through clear strategies, solid data foundations, and the adoption of AI.”

The award makes it clear that innovation in the industry is no longer the exception, but has become a strategic necessity.