Serving Customers Better with Lean Selective Data Transition

At SAP Sapphire in 2024, Stefanie Kuebler, global head of Business and Data Transformation Solutions at SAP, and her team announced the eagerly awaited lean selective data transition for SAP S/4HANA in SAP Business Transformation Center.

Here, she shares about how the pair work together to help supercharge customers’ digital transformations.

Q: Can you give a little background on SAP Business Transformation Center?

A: SAP Business Transformation Center was envisioned as a one-stop shop for customers that want to transition from SAP ERP Central Component (SAP ERP) 6.0 to SAP S/4HANA. The challenges to such a transformation are, of course, numerous and daunting. Customers need to cull current data, pull together fragmented tool sets, line up the right human resources, and keep an eye on time to value.

With SAP Business Transformation Center, we’ve done our best to bring together the latest functionality and expert guidance to smooth the way – in a single, powerful software-as-a-service (SaaS) offering. And SAP Business Transformation Center is easily accessible, deployed on SAP Cloud ALM atop SAP Business Technology Platform (SAP BTP). It comes with any implementation of RISE with SAP or any cloud solution from SAP and can be ready to use in less than half an hour.

Q: Where can customers go for further details?

A: The support materials at SAP Business Transformation Center include a quick summary of features and benefits, along with the introductory video.

Q: What does SAP see as the core mission of SAP Business Transformation Center?

A: Kilian Carolan from the Premium Hub – CoE Ireland Data Management has described the mission this way: “To play an active part in the SAP S/4HANA adoption journey by supporting key data management and data migration topics and to serve as the trusted advisor for our customers.” He continues to explain that we do this through end-to-end support, including hands-on execution, optimization, transformation, upgrade, and migration of Big Data and data platforms. In short, we apply our vast portfolio of enterprise information management and landscape transformation tools, methodologies, and processes to the customer’s unique transformation scenario.

Q: Where are we in the ongoing evolution of SAP Business Transformation Center?

A: Our first step was to help customers fully understand the structure of their SAP legacy systems through the digital blueprint. This supplied the background they needed to begin scoping the transformation project. And now we’ve completed the second step for moving data across to the target system – with lean selective data transition for SAP S/4HANA.

Optimize your data transformation process and seamlessly transition to a more agile and innovative enterprise

Q: What exactly does the lean selective data transition for SAP S/4HANA do?

A: Data transformation is traditionally a highly complex undertaking, and we’ve made a huge dent in that complexity. Right at the start, lean selective data transition for SAP S/4HANA helps radically reduce the decision-making efforts involved in choosing data to migrate. The underlying principle is to provide smarter suggestions and fewer difficult choices through market-leading services and tools – and end-to-end advice on making the most of them. That approach helps customers ensure that they only move data that will continue to be useful, reducing the volume of data for the testing and go-live phases and accelerating the transition exponentially.

With lean selective data transition for SAP S/4HANA, customers can pare down SAP legacy data and bring the target system live with a clean data foundation. In combination with the digital blueprint, lean selective data transition for SAP S/4HANA can give SAP Business Transformation Center the power to do all the heavy lifting of accessing source systems; extracting, transforming, and loading relevant data; and validating data for completeness, consistency, and correctness.

Q: What types of data can customers choose to exclude from the transfer?

A: For example, they could decide to completely ignore obsolete company codes, such as data for companies they have since divested or which are no longer in use.

Q: What does the wider market see as the single most revolutionary aspect of lean selective data transition for SAP S/4HANA?

A: For the very first time, SAP provides standard functionality not only for complete rebuilds, greenfield implementations, system conversions, or brownfield implementations, but also for projects somewhere in the middle. This is a third path, if you will, and it’s a holistic approach to the big transformation from SAP ECC 6.0 to SAP S/4 HANA Cloud Private Edition.

Q: Can you take us a little deeper into how lean selective data transition for SAP S/4HANA works and how customers can benefit?

A: With the SAP Readiness Check tool for SAP ERP usage and data profiling, we can collaborate with the customer to read the data from the source system and identify legal entities that are no longer in use or will soon be obsolete. SAP Business Transformation Center then can propose that these entities and the associated data are “removed from the scope” before starting the data transition and can provide clear instructions on how to do this. It can also help to identify customer-specific data in the SAP legacy system. Here, too, the customer has the option of leaving this data behind on the way to SAP S/4HANA to support its clean core strategy and move closer to the standard again.

Both these jobs would previously have meant time-consuming manual work for the solution architect – and higher costs and longer time to value for the customer. With the addition of lean selective data transition for SAP S/4HANA to the already popular functionality for digital blueprinting, SAP Business Transformation Center can now provide optimal support and transparency in each phase of the transformation project. It helps customers analyze the source system, define migration scope, create migration cycles, and finally transform the leaner body of data they’ve elected to move across. From strategy to execution, we serve as a trusted partner, helping to ensure that every step of the way leads to meaningful insights and sustainable results. And that lowers both total cost of implementation (TCI) and total cost of operation (TCO).

Q: What have customers been saying about lean selective data transition for SAP S/4HANA?

A: Long-term partner BMW Group, for example, has told us, “This feature significantly speeds up our evolution into an intelligent enterprise by applying sustainable and efficient solutions and methodologies.”


Karin Baeumler is part of Go-to-Market, Business & Data Transformation Solutions, at SAP.

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Revolutionizing Proactive Risk Management to Accelerate Business Process Transformation

Datricks, the leader in AI-powered risk mining, expands its relationship with SAP with the launch of Datricks for Risk Mining as an SAP endorsed app. The solution helps empower organizations to proactively detect, prevent, and mitigate risks through advanced technology and streamlined integration.

The strategic alliance between Datricks and SAP Signavio leverages the strengths of both to deliver unparalleled value to customers, revolutionizing proactive risk management to help accelerate business process transformation. Together, Datricks and SAP Signavio aim to provide a seamless and integrated solution for financial business risk mining and process management that supports both internal controls and business transformation. This collaboration underscores a shared commitment to innovation and excellence, driving forward the capabilities of risk management in the financial sector.

Datricks’ cutting-edge, AI-driven technology, combined with SAP Signavio’s leading expertise in business process transformation, helps deliver a comprehensive solution that can streamline operations and empower organizations to proactively identify and mitigate risks before they escalate into major disruptions. The solution can tackle the gap between business processes and compliance and can reduce long and expensive auditing cycles, allowing our customers to maximize efficiency and reduce costs. Risks and controls are identified by Datricks and then integrated into SAP Signavio solutions to access control and process effectiveness, fostering proactive risk management.

Our end-to-end solution enables customers to:

  • Uncover hidden risks: Datricks’ AI-powered risk mining solution continuously analyzes 100% of customers’ financial data, exposing unseen anomalies and potential threats to financial integrity.
  • Prevent financial and reputational damage: Mitigate risks proactively before they escalate, safeguarding your company’s financial health and reputation.
  • Streamline audits and controls: Eliminate error-prone manual work and enhance existing controls with automated and reliable processes.
  • Gain real-time insights: Receive immediate answers to audit-related questions, identify the root cause of risks, and make informed decisions with confidence.

Datricks for Risk Mining helps automate risk detection and mitigation, ushering in the era of autonomous finance. It seamlessly integrates with SAP Signavio solutions, offering a holistic view of risk and process management. Together, we provide an end-to-end solution for financial business risk mining and process management, supporting both internal controls and process transformations.


Mani Pirouz is chief business officer for SAP Business Transformation Management.

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The Future With Intelligent Finance

The intelligent automation revolution has arrived. According to a recent report from McKinsey & Co, this is the third wave of digitization and generative AI, in which businesses can add new unstructured content to analytical AI’s structured data capabilities. This means we see massive productivity gains for businesses, especially regarding their finance operations.

Generative AI: Revolutionize your business with AI built right into your applications

For the CFO and their teams, there is a wealth of opportunity here, but also not inconsiderable risk. The best CFOs are masters of balancing risk with opportunity; those who can do it well right now have an immense opportunity to write a new playbook for AI leadership. That’s because effective AI strategies involve more than just tools. They require a strong sense of where the business value lies and a keen sense for ensuring every technology investment has a clear return for the business — all things savvy CFOs have in abundance.

Two areas that stand out are payments and cash flow management. Recent research from Gartner compared organizations it saw as leading the way with successful AI strategies and implementations with their competitors. The study revealed that 46% of organizations with the most successful AI implementations leverage AI in customer payment forecasting, illustrating the vast potential for AI in this space.

But it’s not just about forecasting accuracy. It has been estimated that as much as $44 trillion is locked in global supply chains at any time. Accessing these funds, or at least ensuring they are working as efficiently as they can for you, can go a long way in helping you invest, expand, or diversify. McKinsey ranks enhanced working capital management as one of the top three areas for AI investment, alongside predictive cash flow forecasting and growth prioritization/M&A targets.

The real game-changer is the natural language-based tools and the capabilities to generate thorough financial scenarios. For example, you could ask, “What are my options to ensure the Board has the $750 million needed to make that acquisition or R&D investment in the year’s second half? What are the three best scenarios to ensure we achieve a free cash flow of $500 million in Q4 of this year?”

Assuming you have the data, the combination of predictive and generative AI will give you the analysis you need and the narrative to provide a clear pathway to your business goal.

Another opportunity is around fraud detection. Electronic payments are standard in many countries and supply chains are increasingly complex, which means the threat of fraud is increasing. AI can detect unusual patterns from typical transaction profiles, minimizing the rejection of legitimate transactions and maximizing the accuracy of fraudulent payments.

Automation is also an area that is ripe for significant leveling up. The future of payments powered by AI strives for complete autonomy, from predicting future incoming payments based on behavioral patterns to independently initiating dispute management in the event of non-payment to automated incoming payment reconciliations.

When we talk about AI’s transformative abilities, the most significant benefit is its ability to support continuous optimization. Whether it’s benchmarking against industry peers, risk modeling, or analyzing supplier behavior to optimize payment, the ability of AI tools to absorb and analyze vast amounts of data and generate scenarios in a multitude of forms gives you the power to act faster, with greater cost efficiency and insight.

Of course, it’s not just the technology that delivers the difference; it’s the combination of technology, financing partners, and processes. AI tools are most effective in the hands of a team that understands how to use them and has the processes in place to enable them to be used effectively. They also require access to vast amounts of data, internal and external.

For many businesses, the most effective and least risky investment is in platforms and technology tools that already have AI capabilities built in and in the people who know how to leverage them.

There is no doubt that the potential for everyone is significant. The early evidence suggests that those who have taken the plunge and are investing strategically are already reaping the benefits.

It points to a future full of incredible opportunities ahead and we are really excited about it!


Scott Russell is chief revenue officer and a member of the Executive Board of SAP SE.
Cedric Bru is CEO of Taulia.

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This story also appeared on SAP BrandVoice on Forbes.

SAP UKI Appoints Leila Romane as New Managing Director

SAP UK and Ireland (SAP UKI) has appointed Leila Romane as the new Managing Director, heralding a new era of growth and transformation for the company. Romane, who will assume her role on August 1st, will be responsible for steering the strategic direction and operations of SAP UKI. Reporting directly to Manos Raptopoulos, President EMEA […]

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SAP Is Leading the AI Revolution in Spend Management and Business Network Software

Your time is precious. Especially during summer, when the outdoors calls – and so do your family and friends.

At SAP, we’ve designed our spend management and business network solutions with this in mind. SAP Ariba solutions, SAP Business Network, SAP Concur solutions, and SAP Fieldglass solutions help you spend less time bogged down by tactical work, giving you more time to focus on strategic initiatives.

Our market-leading solutions help provide complete visibility into your company spending, so your decisions are smarter and your time and money saved. And with AI becoming ubiquitous, we’re automating repetitive tasks and analyzing enterprise-wide spend analytics to identify tail spend, improve compliance, and identify rapidly increasing costs.

Artificial Intelligence Is Changing Everything About Enterprise Software

AI is revolutionizing the global business landscape and SAP is at the forefront. We continuously embed new AI capabilities into our software to deliver intelligent spend management solutions to our customers. With our AI-infused products, work – and your workforce – can be more productive and supply chains more resilient.

At SAP Sapphire in June, we announced more time- and cash-saving product enhancements that provide generative AI capabilities. Here are several of them:

  • New generative AI capabilities in SAP Fieldglass solutions help procurement departments streamline the recruitment of external workers. Hiring managers can generate and maintain effective job descriptions, while project managers can deliver detailed statements of work (SOWs) more rapidly with the press of the “Enhance with AI” button. This can enable businesses to quickly identify and engage contractors with the right skills and qualifications.
  • Business owners and sales executives can now benefit from new generative AI capabilities in SAP Business Network to help generate accurate and timely RFI responses to potential buyers consistently. This can result in a 2-4 times* increase in lead conversion and can reduce effort in responding to requests by up to 75%*.
  • SAP’s generative AI copilot Joule, which can quickly sort and contextualize data from multiple systems to help advance automation and improve decision-making, is expanding throughout SAP’s portfolio and will be embedded in SAP Ariba solutions to help improve procurement processes and supply chain planning by the end of 2024.

The AI enhancements mentioned above are only a few examples of how we’re transforming spend management and how businesses approach procurement through AI. Check out our AI spend management road map to see which new features will soon be available at your fingertips.

Eliminate the mundane and elevate the strategic with generative AI

With the record-breaking travel over the July 4th holiday weekend in the U.S., I would be remiss in not mentioning that Amtrak for Concur TripLink is now live! Released in April, connected customers can book tickets directly on the Amtrak website or mobile app, select the business booking path, and see their company’s negotiated rates while browsing. With skyrocketing airline ticket prices and the extra legroom, I’m on board with taking Amtrak to my next customer meeting.

Our Customers Are Winning

I could talk all day about how our customers are winning with SAP spend management and business network solutions, but these customer examples speak for themselves:

  • Pony.ai needed to meet growing demand as a global leader in autonomous mobility with business units for robotaxi, robotruck, and personally owned vehicles. After implementing SAP Business Network and SAP Ariba solutions, procurement cycle times were reduced by one week on average and the supplier qualification verification process sped up by three times.
  • With the introduction of Japan’s electronic bookkeeping law, CRE Inc., a logistics real estate company, seized the opportunity to digitalize its expense reimbursement process and align with the new regulations simultaneously. It selected Concur Expense to help automate processes and eliminate manual workflows and now spends 80% less time on the expense reimbursement process.
  • When Accenture wanted to gain deeper insights into its services-based spend activity and align procurement with environmental, social, and governance (ESG) commitments, the firm embraced SAP Fieldglass solutions. With rich data on how suppliers deliver against an agreement, Accenture can now effectively tie services spend to individual contracts.

It’s Great Being #1

New honors from Ardent Partners, Procurement Magazine, and TrustRadius have us buzzing with gratitude.

Ardent Partners has positioned SAP Fieldglass as a Market Leader in its 2024 Vendor Management System (VMS) Technology Advisor report**. It reads, “SAP Fieldglass has consistently set the bar for the extended workforce solutions industry through a blend of innovation, advanced analytics, and total talent management functionality.” For a more in-depth view of this win, check out this article from my colleague Vish Baliga.

Procurement Magazine is an established, trusted, and leading voice on all things procurement, and we are honored that our SAP spend management solutions are ranked No. 1 in two of their recent lists:

In May, TrustRadius announced that SAP is the winner of 11 Top Rated awards in 2024. This includes all our flagship offerings in our spend management portfolio:

  • SAP Ariba – Procurement, Expense Management, and Supply Chain Management
  • SAP Fieldglass – Leader in Workforce Management, Vendor Management Systems (VMS), Contractor Management, and Freelance Management
  • SAP Concur – Leader in Expense Management, Accounts Payable, and Travel Management
  • SAP Business Network – Supply Chain Visibility Procurement

The TrustRadius Top Rated awards are annual awards that recognize the most trusted and reliable vendors on TrustRadius, based solely on customer satisfaction ratings in customer reviews. SAP owes this recognition to our valued customers. Thank you for constantly inspiring us to be better. 

Join Us at SAP Spend Connect Live

I hope to see you at the world’s premiere spend management conference, SAP Spend Connect Live, which takes place October 14-16, 2024 in Las Vegas, Nevada. This event is a sure bet to learn how to achieve full visibility into your enterprise spend through SAP’s spend management solutions for procurement, external workforce, travel and expense, and business network.

Meet me at the intersection of procurement and supply chain to learn how analytics and SAP Business AI can provide visibility into both. SAP Spend Connect Live is a unique, in-person networking experience, where you’ll connect with procurement and supply chain leaders from businesses and industries worldwide to share ideas, learn from each other’s success, and discuss best practices.

To learn more and register, visit the SAP Spend Connect Live website.


Jeff Collier is chief revenue officer for SAP Intelligent Spend and Business Network.

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*Disclaimer: Values mentioned in this blog post are estimates based on average industry benchmark numbers, resulting from an SAP analysis. Customers interested in a specific business case calculation can consult their SAP account team.

**Ardent Partners’ 2024 Vendor Management System (VMS) Technology Advisor is designed to help procurement, human resources, human capital, and talent acquisition executives navigate the complex and mature VMS solutions marketplace. This report analyzes and assesses the primary VMS solution providers in the marketplace today. You can read the full report here.

Hornbach’s Platform for Growth

“We are not just selling products. We sell projects to people so that they can create their visions,” says Carsten Mueller, head of Enterprise Architecture & Security at Hornbach AG, summarizing the core business of one of the largest home improvement and do-it-yourself (DIY) retailers in Europe.

Known for its extensive range of products, competitive pricing, and customer-centric approach, Hornbach has built a solid reputation over the years. Founded in Germany in 1877 as a small workshop, the retailer has grown into a major player in the European DIY market, employing 25,000 people. The company remains family operated, with a strong focus on customer satisfaction and long-term growth.

“We have more than 170 stores operating in nine European countries, and we keep expanding our footprint across Europe,” Mueller says. “As Hornbach focuses on providing the best price to its customers, efficiency of processes – and especially an efficient software solution – is key for us.”

Sustainable Impact Through Cross-Sector Partnership

With over 10 million social enterprises operating globally, generating US$2 trillion in revenue annually, and creating 200 million jobs, these businesses are effecting sustainable societal change by putting people and planet first.

With the world in a state of polycrisis – a term describing the simultaneous occurrence of several catastrophic events such as conflict, poverty, unemployment, and climate change – social enterprises are more critical than ever. These organizations, like Faces Up Uganda, Elli Cares, Key Farmers Cameroon, and Alexa Goodman Consulting, are a powerful force for change, and although it may seem like a recent trend, MovingWorlds reports that social enterprises have been around for over 600 years.

However, despite their growing impact, these organizations face a number of hurdles. Limited access to financing, lack of public awareness and recognition, lack of government support, inadequate legal or fiscal frameworks, and restricted access to procurement processes can all hinder their ability to thrive.

At SAP, we actively support social enterprises through our comprehensive corporate social responsibility strategy, which includes knowledge and skills transfer from employees and social procurement. Through this strategy, we facilitate pro bono consulting, mentorships, and coaching opportunities to help support social enterprises to scale their businesses, as well as connect them with new B2B markets like SAP Business Network. This approach can empower social enterprises to overcome business challenges, scale their impact, and achieve their ever-important missions.

SAP is powering equitable access to economic opportunity, education and employment, and the circular economy

Pro Bono Consulting: A Win-Win for Social Enterprises and SAP Employees

Building on more than a decade of experience executing pro bono consulting programs, SAP introduced a new way for more employees to share their expertise and experience with social enterprises through the Acceleration Collective initiative. The initiative is hosted on the TRANSFORM Support Hub, a global platform launched in partnership with MovingWorlds, Unilever, and the TRANSFORM program as a resource for social enterprises to access free, ongoing, bespoke support to scale their business.

Last year alone, 120 SAP employees leveraged their expertise on the platform, completing 51 projects and generating an in-kind contribution of $458,835. This initiative can not only offer growth for the social enterprises but can also foster SAP employees’ development through valuable experiential learning.

Employees Creating Change and Being Changed

SAP employees tap into skills from their day-to-day role and harness this expertise to create a solution to a real business challenge their social enterprise client is experiencing. Through this collaboration, employees contribute to the social enterprise’s mission while given the opportunity to flex and grow valuable leadership skills like cross-cultural collaboration, active listening, and a greater understanding of the challenges that small businesses face. To bring that to life, here are a few inspiring stories from employee participants of Acceleration Collective:

Collaborating with a Youth Art Education Organization on Its Strategic and Funding Plans

David Elliott, a technical communication specialist at SAP UK, collaborated with Faces Up Uganda, a youth development NGO supporting young people from vulnerable backgrounds. The organization uses arts and crafts education to help young people overcome psychosocial challenges and develop essential personal and professional skills.

Elliott reviewed the organization’s website and strategic plan, enhancing the communication of its vision, mission, and values, and wrote grant applications to help secure funding. His work included regular meetings with the organization’s founder, Ssekitto Kalule Emmanuel, who praised David for making “every word count” and inspiring the team.

“My experience with Faces Up revealed the potential of my skill set,” Elliott added. “Clarifying grammatical rules and style taught me about the impact of language in specific contexts, which has influenced my role at SAP. Seeing my work’s impact and receiving gratitude has motivated me to donate many hours to these projects.”

Partnering for Growing an App Supporting Independence for People Living with Dementia

A team of SAP employees from across the Asia, Pacific, and Japan (APJ) region – Binh Pham, senior value advisor; Sandra Chang, senior commercial business partner; and Summer Zeng, delivery manager, Product Engineering – worked alongside Elli Cares, a startup focused on supporting people with cognitive impairments. The team brainstormed with the founder, offering insights and recommendations on scaling and growing to take the business to the next level.

Pham found the experience fun, insightful, and humbling, as the team learned the challenges that startups like Elli Cares face and provided recommendations and solutions. “I was pleasantly surprised that my skill sets from my day-to-day job were transferrable and applicable to the case of this organization,” Pham said.

Enhancing the Funding Strategy for an Organization Empowering Rural Agricultural Communities

A Germany-based pro bono team – Fabio Westphal, solution advisor; Cansu Günay, enterprise customer success partner; Charlie Vu, specialist solution advisor; and Lilly Selzer, customer success partner – focused on strengthening Key Farmers Cameroon’s investor and donor outreach. This enterprise empowers rural communities through sustainable agriculture and vocational training. The SAP team refined the organization’s pitch deck and social media presence, enhancing its chances of securing funding. Westphal highlighted that he learned the importance of clear, trustful communication and concise storytelling in conveying complex ideas.

Scaling the Online Presence of a Consulting Firm Dedicated to Addressing Environmental Challenges with Creative Scientific Communication

Jaime Atilano, digital solution advisor, and Mallory Rioux, Customer Success, used their expertise in technology, brand building, and customer success to assist Alexa Goodman Consulting. Founded by scientist and environmental activist Alexa Goodman, the firm offers services in environmental education, science communication, professional development, diversity, equity, and inclusion (DEI), and team building.

The SAP team optimized the organization’s website SEO to drive traffic and grow its online presence. “This experience was eye-opening. It’s one thing to learn about moving from empathy to action, but this opportunity allowed empathy to thrive,” Atilano shared. “I learned new skills, collaborated with a great team, and supported an entrepreneur working to save our oceans and advocate for LGBTQIA+ rights. It brought SAP Corporate Social Responsibility to life and confirmed that there is good in this world, and we can be part of it.”

Are You a New Pro Bono Consultant?

Two of our experts share their advice:

“Have confidence in your ability to provide value where you least expect it.”
– David Elliott, technical communication specialist at SAP

“Embrace the uncomfortable. You won’t know everything, but you are there for a reason. Lean on your strengths and bridge gaps, even in small ways. Learning a new skill can seem daunting, but it’s a win-win: upskilling for you while supporting a social good endeavor. Your effort will make a difference for the client and the world.”
– Jaime Atilano, digital solution advisor at SAP

Looking Ahead

The challenges we face in today’s world may be vast, but the potential for change that is created when social enterprises and professionals come together is even greater. As we move toward solutions, social enterprises have emerged as a springboard to a more just and sustainable future. Through collaboration and the power of collective action, we can further enable these changemakers to create innovative solutions to some of the world’s biggest challenges, all while bolstering the skills and expanding the perspectives of our own employees.

Are you inspired to utilize your skills for good and join the pro bono consulting movement? SAP employees and alumni can find more information through the Acceleration Collective launch page, and professionals from other organizations as well as social enterprises can learn more through the TRANSFORM Support Hub.


Hemang Desai is global program director of the Pro Bono Consulting Portfolio for Corporate Social Responsibility at SAP.

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SAP Quality Awards 2024 Honors Outstanding SAP Projects

The SAP Quality Awards 2024 showcased the diverse and innovative SAP projects across Germany, highlighting the commitment to excellence in various industries and applications. The SAP Quality Awards 2024 took place on June 28th in the VIP Lounge of the SAP Arena, celebrating Germany’s most impressive SAP projects. The event was graced by a video […]

The post SAP Quality Awards 2024 Honors Outstanding SAP Projects appeared first on InsideSAP.

The Evolving Influence of Procurement in Organizations

Historically, procurement teams have not been granted the same access to strategic decision-making as other departments. They’ve been limited within the scope of the supply chain and forced to make choices based on company policy. That is finally shifting as procurement executives have more input in long-term company planning.

In a broad study sponsored by SAP, Economist Impact examines procurement’s growing role, interviewing 2,307 C-suite executives from January to March 2024, spanning multiple countries, regions, and industries. The report finds that external pressures have compelled procurement teams to break down silos and collaborate with other departments to deliver value toward organizational goals. This is not only enhancing cross-functional collaboration but also positioning procurement as a key function in shaping and executing business strategies.

The report, “Across the procurement-verse: Changing trends in the procurement function,” touches on what trends are impacting the growing expectations for procurement.

“The 2024 survey results unmistakably point to an expanding role for procurement in businesses and a growing perception of the function as a value generator,” the report states. Interviewees cite lasting effects from the pandemic, inflation rates, and other supply chain disruptions as reasons for the increasing reliance on procurement.

Effective Collaboration with Chief Operating Officers

With macroeconomic conditions constantly fluctuating, procurement teams are increasingly reporting to chief operating officers (COOs) rather than chief financial officers (CFOs), reflecting the expanding scope of procurement beyond just cost reduction to operational risk management. According to the Economist Impact survey, 75% of respondents agree that procurement collaborates effectively with the rest of the organization to achieve the company vision, a significant increase from the previous year.

However, with only 18% of strongly agreeing, there is still room for improvement in procurement’s collaboration and value creation. “Procurement has often operated in this bubble that was in service of its own goals as opposed to in service of the goals of the wider business,” the report states.

Fortunately, the survey suggests that procurement executives are increasingly focusing on generating insights that align with the needs of various stakeholders, fostering cross-functional collaboration to improve outcomes across the organization.

AI as a Driver for Digitalization

AI has shown that it can increase efficiency across many business use cases. Within procurement, AI and generative AI can optimize spend, enhance supplier management, create cost savings opportunities, and allow procurement professionals to focus on value-adding activities.

Read the full report from Economist Impact

The Economist Impact data suggests that AI is a significant driver of digital transformation. Accelerating digitalization is tied as the top procurement priority over the next 12-18 months, with 44% of respondents identifying AI as a crucial technology focus. Respondents anticipate that AI would bring about significant enhancements in two areas: the automation of procurement processes (48%) and improved guidance and optimization (45%).

Chief procurement officers (CPOs) are seeing direct impacts on business outcomes through increased technology investment. However, to realize the value of AI, procurement executives must create a road map for change management, adopt new ways of working, and invest in developing new skills for their workforce. The survey cites that 69% of respondents believe a lack of vision and business alignment poses a major change management challenge in procurement transformation.

Inflation’s Lasting Impact

Cost management continues to remain a high priority on procurement’s agenda, especially as high inflation rates become a growing concern for CPOs, with 49% of executives citing monetary uncertainty as their top priority compared to other procurement risks – a 29% jump from 2023. Even while inflation rates have dipped, costs for materials and items remain high.

It is no surprise that 71% of the CPO respondents identify macroeconomic risks as one of the primary external factors influencing their organizations’ strategic priorities over the next 12-18 months.

It is difficult to predict when and if the economic turbulence we are all experiencing will settle down. But, once it does, procurement executives expect to shift their attention to risk management, as 40% cite supplier diversification as a priority over the next three to five years. However, “diversifying from suppliers is not as easy, especially if the supplier is the sole provider of the goods or service, or if they are deeply embedded in the supply chain,” the report states.

Technology can help procurement teams easily identify alternative sources of materials, ensuring supply chain resilience and minimizing the risk of disruptions.

The Sustainable Buyer

As external pressure mounts from internal stakeholders and regulators for companies to act on environmental issues, procurement teams have placed a larger emphasis on sustainability.

In fact, 70% of executives say legal and regulatory non-compliance is a key external risk. Procurement teams have responded accordingly, as 32% of executives list sustainability as a top priority, a 7% increase from 2023. Additionally, the top priority for sustainability among executives is compliance, demonstrating an increased focus on regulatory risks.

The increased attention on environmental, social, and governance (ESG) has been successful, as 68% of executives express confidence in procurement consistently meeting ESG goals, an increase of 21% from the 2023 survey. With long-term sustainability measures in place, procurement teams may serve as a model for regulatory compliance.

Shaping the Procurement Function of the Future

The Economist Impact research indicates procurement’s growing value within organizations, with CPOs and their teams gaining a seat at the table. However, to maintain this position, procurement must address critical areas for improvement, such as spend management and cost control capabilities, where a third of C-suite executives lack confidence in procurement’s abilities.

The survey points to deeper issues, including gaps in procurement’s visibility into stakeholder risks and priorities, limitations in creating accurate spend data, developing clear road maps, and forging deeper relationships with stakeholders. Collaboration and improved communication are crucial for building trust and sustaining engagement with procurement’s insights.

Investing in procurement technology, such as SAP Ariba Procurement solutions, can help address priorities and enhance the procurement function. These solutions can span various aspects of procurement and include new integrations and generative AI features to help automate and streamline processes. Additionally, enhancements to SAP Business Network aim to reduce silos between and within organizations and can result in significant time and cost savings.

Through in-depth interviews and targeted research, the Economist Impact report provides a broad analysis of the state of procurement. View the infographic and download the report.


Baber Farooq is senior vice president for Market Strategy Procurement Solutions at SAP.

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