In 2025, the consumer packaged goods (CPG) sector finds itself in a sticky situation. Companies across the category are facing mounting pressures on both the front and back ends of their operations — from rising costs and shifting trade policy to evolving consumer expectations and eroding brand loyalty.

Few industries feel this dual pressure more than American candy makers, particularly during this year’s Halloween season — their single most important sales moment of the year.

Unfortunately, this year the spookiest season proved to be a particularly tricky one. According to FinanceBuzz, candy prices rose by 17% from 2024 to 2025. Price increases pose a threat to legacy brands, as 26% of American consumers say they can no longer afford brand loyalty, according to the 2025 SAP Emarsys Customer Loyalty Index.

For confectionery manufacturers that have long relied on emotional connection and nostalgia to sustain sales, this Halloween season created pressures on the front- and back-end, leading to what’s effectively called the “CPG squeeze.”

Yet, there’s still room for optimism. The bottom line is that consumer demand hasn’t disappeared; it’s simply evolving. While this Halloween season presented a scare, candy makers can prepare for upcoming moments like the holiday season and Valentine’s Day by integrating financial, commercial, and supply chain planning as well as by connecting sourcing, production, logistics, marketing, and retail.

Supplier side reality

Behind the fun-size bars and Halloween packaging, U.S. candy makers grappled with operational headwinds this year. Volatile trade policy made ingredient and packaging costs unpredictable, while global disruptions reverberated through supply chains.

In anticipation, manufacturers stockpiled inventory and restructured supplier networks, tying up working capital and putting additional stress on already thin margins. The loss of supplier stability has also become a defining feature of today’s CPG landscape: 70% of companies report switching suppliers primarily due to cost considerations, and fewer than one in four (22%) have maintained supplier relationships longer than five years, according to data from SAP Emarsys.

For candy makers dependent on commodities like sugar, cocoa, and dairy, these disruptions hit particularly hard. Add that to the growing costs of packaging, transportation, and marketing, and even iconic brands found themselves squeezed from all sides.

Cautious consumers and the erosion of loyalty

On the consumer front, the loyalty that once defined relationships with classic candy brands began to show signs of strain. That’s bad news for staple brands that have long relied on customers who instinctively reach for the same branded candy every Halloween.

At the same time, social media has amplified product discovery. Trends can shift overnight, and a viral post about a new flavor or an unexpected candy collaboration can sway younger buyers instantly. For established brands, loyalty must now be earned continuously.

Halloween was one example of this shift, but we’re going to see families purchase fewer products or mix traditional favorites with lower-priced alternatives in the future as Americans continue to tighten their budgets. Meanwhile, retailers will face uncertain demand and fluctuating supplier costs, leading to a greater risk of stockouts. These trends highlight why CPG companies need smarter, more connected planning to stay ahead of shifting consumer behavior.

Stopping the squeeze with end-to-end connected planning

The effect of the CPG squeeze during this Halloween season offers candy makers valuable lessons before future moments of peak demand. Companies that continue to operate with fragmented data risk missing critical insights, whether it’s an emerging cost spike, a change in trade policy or a social trend that could make or break sales.

That’s why CPG companies must embrace end-to-end business planning, a holistic approach that aims to enable agility, transparency and collaboration across every stage of the value chain, through the following methods:

1. Integrated supply and demand planning

Using AI-driven analytics and real-time data, companies can more accurately balance supply and demand, ensuring they produce the right amount of product at the right time. For candy makers, that means having adjusted holiday production runs in response to early season buying trends or ingredient cost shifts.

This model helps connect supplier, logistics, and retail data streams, allowing teams to react instantly to cost spikes or sales slowdowns — helping CPGs improve forecast accuracy for tomorrow’s disruptions today.

2. Collaborative commercial and promotions planning

Integrating sales, marketing and trade promotion data with supply and finance planning helps maximize promotional ROI. Deloitte reports that 68% of CPG companies are simplifying or otherwise improving their organizational structure to improve coordination between teams, leading to fewer out-of-stocks and stronger seasonal performance.

To make these efforts more effective, companies must turn to revenue growth management as a strategic link between planning and execution. By connecting ROI, volume, and profit and loss data, SAP Revenue Growth Management ensures promotions are timed and tailored to shopper needs. This approach supports customer retention, attracts new buyers, and helps maintain healthy margins.

The coordination of holiday campaigns, shelf placements, and promotional pricing with a unified view of inventory and demand is crucial. Rather than running separate marketing and logistics calendars, teams must collaborate around a single version of truth, ensuring the product featured in a viral ad is available on shelves.

3. Financial planning and scenario modeling

End-to-end planning also allows companies to simulate “what-if” scenarios by modeling policy changes, supply shortages, or demand surges to test resilience. For example, a candy maker facing a 10% increase in imported cocoa costs can immediately assess how to reallocate budgets through promotional adjustments, sourcing alternatives, or margin management.

With real-time connectivity across teams, financial forecasts can automatically update as assumptions shift, empowering decision-makers to pivot fast.

Turning pressure into opportunity

The “CPG squeeze” wasn’t just a momentary market condition; it’s a structural shift that will reshape how candy makers and other CPG brands operate for years to come.

Halloween this year delivered more tricks than treats for American candy makers. Rising costs, shifting loyalties and supply challenges exposed the fragility of traditional planning models. To weather the holidays ahead, all CPGs must embrace integrated planning models that connect every part of the value chain.

With greater visibility and agility to anticipate change and respond to consumer demand, CPG brands can make every holiday a little sweeter.

Jon Dano is an industry executive advisor for Consumer Products at SAP.

With the help of SAP AppHaus Network partner Flexso, Belgian steel wire producer Bekaert created a new AI Master Data Assistant with SAP AI Core in SAP Business Technology Platform (SAP BTP), and SAP SuccessFactors solutions.

Bekaert aspires to become a people- and data-driven company. This requires a thorough strategic and cultural transformation, in which artificial intelligence plays a crucial role. To get started, the company set priorities, leveraging the embedded AI capabilities already available in its existing HR solutions such as SAP SuccessFactors solutions. By focusing on a few embedded AI use cases and creating a stand-alone AI tool on top of that, it started exploring and seeing the AI benefits.

“AI is a means to achieve our goals, a logical extension of our HR strategy,” says Jorn Waterschoot, global head of HR Technology at Bekaert. “AI’s growing capabilities, cost-effectiveness, and versatility are transforming businesses by enhancing user experiences, enabling experimentation, and encouraging adoption. At Bekaert, these strengths are leveraged in HR while carefully managing hidden costs and focusing on end-to-end implementation to maximize AI’s potential. At Bekaert, the goal is to make AI feel like a candy store: once employees experience its versatility, they are encouraged to explore it further.”

First use case: the AI Master Data Assistant

Together with its long-standing partner and SAP AppHaus Network member Flexso, Bekaert worked along a human-centered approach to innovation to identify opportunities and use cases. One of these identified use cases was a stand-alone AI tool that Bekaert used for HR data improvement. This tool was not integrated in the existing software landscape and required of users to extract and import data. 

To improve this laborious process, Flexso helped design and build a custom AI solution, called AI Master Data Assistant, with the help of SAP AI Core in SAP Business Technology Platform. This new solution has been fully integrated with SAP SuccessFactors solutions, using SAP Integration Suite. Currently, the solution uses a specific AI model from generative AI hub in SAP AI Core. However, the flexibility with various models offered through the generative AI hub capability would allow the partner to use another AI model for this solution in the future.

Who benefits from AI in HR at Bekaert?

The AI Master Data Assistant allows the Bekaert HR teams to enhance data quality by automatically identifying, correcting, and preventing errors in employee records. The assistant can detect inconsistencies, duplicates, and missing information, ensuring that all data is accurate, complete, and up-to-date. In practice, it means that users can enter natural language prompts to get proposals for improvement. Via chat-like conversations, they can standardize formats, correct errors, and validate entries in real time.

For innovation projects, Bekaert usually rolls out new solutions gradually first through a number of role-specific use cases, then deploy them indiscriminately across the organization. For the new AI Master Data Assistant, the HR business partners and HR admin roles benefitted first.

Flexibility for the future

As part of the global SAP AppHaus Network, Flexso always strives for a human-centered and sustainable co-innovation approach with its customers. It is about bringing innovation into the hands of people. David Pierre, AI practice lead at Flexso explains: “The AI world is developing so fast. So, the principle in our solution is that we are AI model agnostic. Today, we are using model GPT to support our use case. But if we have a better model in the future, then we can also switch to other models as they are all supported by SAP BTP.”

Imke Vierjahn is SAP AppHaus communications lead.

A rockstar, a CEO, and a teenager walk into a room. It’s not the start of a joke, but the essence of a decade-long partnership between SAP and We Are Family Foundation (WAFF). Together, they’ve built a model that shows how young leaders can move from token voices to strategy shapers, from climate action to AI regulation. And the results offer practical lessons for every company looking to future-proof their business.

The challenges facing businesses today demand fresh ideas, digital fluency, and bold thinking. These are the qualities youth leaders bring in spades. For more than 20 years, WAFF, co-founded by music legend Nile Rodgers and his lifelong partner Nancy Hunt, has mentored young leaders from more than 100 countries. Over the past decade, WAFF and SAP have partnered to deepen that global impact, moving youth voices from symbolic gestures to central drivers of innovation.

From roundtables where teenagers challenge senior executives, to shaping initiatives at the UN Climate Change Conferences and the World Economic Forum annual meeting in Davos, WAFF and SAP have developed a blueprint for embedding youth-led ideas into corporate strategy, supply chains, and culture while delivering measurable business and societal impact.

Here are five lessons from the collaboration on how intergenerational partnerships unlock value for both business and society.

1. Problems that span generations require leadership that does too

Traditional business models silo generations: executives design the strategy, then hand it down for others to execute. In today’s world, that handoff wastes momentum and risks irrelevance.

WAFF’s 2024 global study, Collaborating Across Generations, found that when senior leaders and young changemakers co-create from the start, ideas are stress-tested in real time. This results in strategies that are bolder, more resilient, and more adaptable to fast-moving challenges.

In short, instead of passing the baton on the final leg, build your strategies together from the starting line.

2. Intergenerational collaboration is a smart strategy

Youth leaders aren’t just “future leaders.” They already bring expertise that legacy teams lack. Digital natives understand platforms, trends, and user behavior instinctively. They also bring the urgency of living through the climate crisis and global inequality.

Take WAFF Youth Leader Arunima Sen, who uses AI to track plastic debris and apply data-driven models to malnutrition. Her work bridges grassroots innovation with scalable solutions, which is exactly the kind of thinking that can de-risk corporate strategies and ensure relevance from day one.

For companies, including youth voices isn’t an act of goodwill; it’s strategic de-risking.

3. Where business, policy, and community align, impact follows

Global challenges cannot be solved in silos. The biggest breakthroughs happen when companies, policymakers, and social entrepreneurs collaborate.

One example is Mozamel Aman, a young Afghan impact entrepreneur and immigrant in Germany, who built StartSteps to create inclusive employment pathways. In 2023, he began a partnership with SAP Germany connecting women to the opportunity for tech jobs in the SAP ecosystem, blending corporate support with government stipends. His organization leverages government stipends from the Bundesagentur für Arbeit (Federal Employment Agency) to train unemployed individuals and connect them with job opportunities. 

Germany’s technical talent gap is nearly the same size as its unemployed refugee population. Partnerships like this solve social challenges while closing critical business gaps in talent and innovation.

4. Purpose, profit, and the power of inclusion

Authentic inclusion of young experts, especially Gen-Zs, builds credibility, trust, and stronger business performance.

Employees notice:

• Engagement: Only 31% of U.S. employees were engaged in 2024, the lowest level in a decade.
• Retention risk: Employees who feel aligned with their company’s mission and values are much more likely to stay, while misalignment drives turnover.
• Business impact: Highly engaged employees drive up to 21% higher profitability.

WAFF’s global study findings underscore these statistics, indicating that young people see inclusivity and accountability as non-negotiable factors. By authentically including youth, organizations set a standard of purpose that fuels stronger engagement, deeper loyalty, and, ultimately, higher profitability.

5. Strategic procurement for social good

The most powerful financial corporate tool for change isn’t in giving, but perhaps in spending.

SAP Business Network facilitates US$6.1 trillion in annual commerce. Compare that to an average corporate social responsibility (CSR) budget of $12 million among FTSE 100 companies, and the potential is clear: redirecting even a fraction of procurement spend toward youth-led, sustainable enterprises can transform impact at scale.

Watson Institute, with leadership from former WAFF alumni, James Okina, has recently published a new research report on the opportunity for young social entrepreneurs in impact-led procurement. The report found that young, impact-driven entrepreneurs who succeed in selling to corporations report an average revenue increase of $170,187.50, while those who fail to secure deals lose between $7,000 and $300,000 in potential revenue. Okina offers that he “doesn’t understand why youth involvement in business is still so controversial.” SAP and WAFF agree. By integrating expert impact entrepreneurs who happen to be young into procurement pipelines, for example, companies embrace innovation and align with corporate goals and values while maintaining quality, price, and performance. It is a smarter, systemic approach than writing philanthropic checks.

A blueprint for the next decade

Over the past decade, SAP and WAFF have shown that partnering with young impact leaders creates a true competitive edge.

Companies that co-create with the next generation design strategies that are bolder, more relevant, and more sustainable. They build workforces that are engaged, trusted, and innovative. They align business goals with societal needs in ways that deliver measurable results—and, across generations, they operate on longer runways to implement lasting solutions.

Businesses that win in the next decade won’t just listen to youth; they will build with them. And that’s smart business.

Jennifer Beason is global director of Corporate Social Responsibility at SAP. Annie Greene and Jamie Roach are global program leads at We Are Family Foundation.

As a major European player in a dynamic global industry, SAP is committed to open competition and believes that its policies and actions are fully in line with competition rules. ​ 

These longstanding policies reflect standard practice across the enterprise software industry. In our proposed remedies, we are clarifying how they work as part of our broader commitment to transparency and customer choice. The European Commission’s concerns specific aspects of our on-premise maintenance and support policies; it does not relate to or affect our cloud offerings. ​ 

We are adhering to the procedure and timeline established by the European Commission, and trust they will bring this proceeding to a quick and fair close.​ 

We do not anticipate the proceeding will result in material impacts on our financial performance. To maintain the integrity of this process, we will not provide additional comments until a final decision has been made.​ 

Every business runs on data, but while companies invest heavily in understanding their customers and their markets, many struggle to access and act on their most valuable data of all: their people data. Without a clear, connected view of their workforce, leaders face difficulty answering fundamental questions, such as do we have the right skills to deliver on our strategy? Where are we at risk of turnover?  Do we have the right people in the right roles to optimize production and meet customer demand?

The impact of getting people analytics right is undeniable. According to research from IDC, organizations that prioritize insights models and performance processes rooted in people data are more likely to see meaningful gains across the board: 98% continuously realize stronger employee satisfaction, 90% experience a boost in workforce performance toward strategic goals, and 87% see improved employee retention.  

Yet for many organizations, the challenge isn’t recognizing the value of people data—it’s unlocking it. Data lives in silos, systems don’t connect, and insights that could drive strategy often stay buried in spreadsheets or dashboards. And let’s face it—the power of AI rests on data. Without harmonized data in one place, organizations can’t fully tap into AI’s potential to deliver proactive insights, predictive intelligence, and personalized recommendations that drive better business decisions.  

That’s why SAP announced the People Intelligence package in SAP Business Data Cloud, now generally available, earlier this year. Built on SAP BDC, People Intelligence is an AI-driven application that can bring together people, skills, and business data—from SAP SuccessFactors solutions and beyond—into actionable insights that help leaders make more informed people and business decisions.  

At Success Connect at SAP Connect earlier this month, we announced new prebuilt insights in People Intelligence for recruiting, learning, succession, career development planning, and performance and goals management—helping to make it even easier for organizations to translate workforce data into measurable impact. 

Turning data into decisions 

People Intelligence combines unified data from across the enterprise with AI-driven predictions to help forecast workforce needs, anticipate labor costs and risks, and strengthen workforce planning. And with Joule, SAP’s AI copilot, HR teams can instantly get contextual, actionable answers to critical business questions such as:  

• What’s the total count of our workforce?  
• Are employees being compensated equitably across similar roles and demographics? 
• What are the key skills gaps within my workforce, and what teams are most affected?  
• What’s the most effective way to acquire high-demand skills?  

Too often, workforce data exists in isolation from finance, supply chain, and operational metrics, which makes it nearly impossible to see how people decisions impact business results. People Intelligence can change that. By linking workforce insights to core business data in SAP Business Data Cloud, leaders can understand how talent strategies affect productivity, compliance, profitability, and agility, and they can act in real time. 

Building a future-ready workforce 

The future of work will be defined by rapid change: accelerating AI adoption, shifting skills requirements, and evolving employee expectations. Organizations that are hamstrung by siloed data or manual analysis will always be a step behind. 

People Intelligence helps provide the foundation and insights to move forward with confidence. By harnessing people data with the same rigor as financial or customer data, organizations gain clarity on how skills, roles, and costs are evolving—and the foresight to stay ahead of what’s next. 

Watch this People Intelligence deep dive to learn how data-driven insights can fuel your workforce strategy.  

Lara Albert is chief marketing officer at SAP SuccessFactors.

SAP’s new People & Culture Lounge (P&C Lounge) concept provides all SAP employees access to one-on-one conversations with HR experts. The P&C Lounge complements SAP’s existing digital HR service channels and will be available to all 110,000 SAP employees worldwide by the end of 2025.

With artificial intelligence and digital technologies massively transforming today’s workplace, a crucial question comes to the fore: how can companies maintain focus on the human aspect? Personal contact is indispensable, particularly when it comes to support on people matters. That’s why SAP is deliberately pursuing a balanced approach to providing HR support to its employees: modern technologies and AI provide efficient and smart solutions, but personal consulting remains essential to offering employees worldwide the best possible support.

“The world of work around us is changing at breathtaking speed,” says Dr. Christian Schmeichel, global head of People & Culture Services at SAP. “Currently, we have four generations in our workforce, and naturally this changes the requirements and expectations for HR. The P&C Lounge is designed to address complex questions and issues raised by employees that are better resolved through personal conversations than through the HR ticketing system.”

Comprehensive HR support approach based on multi-tier model

SAP pursues a differentiated approach to employee support, which Schmeichel describes as a “multi-tier model.” Employees can find general HR information comprehensively covered on SAP’s internal portal, while standard requests—such as vacation requests, payroll statements, or certificates—are efficiently handled through self-services and the company’s Shared Service Center. The new P&C Lounge complements these offerings as a new service channel that provides the option for individual conversations when needed. This strategically brings the human factor back to the foreground: “From my perspective, this more personalized consulting approach for complex issues on a company-wide basis was missing. This is the blank spot that we are now strategically filling in our HR service portfolio,” Schmeichel says.

Previously, personal HR consulting was primarily available to managers through business partners or advisors. With the P&C Lounge, all employees now have access to individual consulting for more complex questions, from personal team issues to challenging payroll questions to career development.

The process is straightforward: employees can schedule appointments through a booking tool and are matched with the expert most appropriate for their query. The system displays which HR specialist will conduct the meeting and in which languages they provide consultation. “Whenever possible, the conversation takes place in the local language; otherwise in English,” Schmeichel explains. For payroll questions, a payroll expert is automatically assigned; for career topics, a corresponding specialist. Intelligent matching will occur with AI support.

“The HR employees who serve as experts in the P&C Lounge have been thoroughly familiarized with the new approach beforehand,” Schmeichel says. Personal affinity is also important: employees must have genuine interest in this type of work and are specifically prepared for the expected topics.

Optimization in HR through AI

Surprisingly, it was the increasing use of AI that paved the way for this new format. “This works because we have developed a very smart resource allocation concept, combined with modern technology that ensures the right expert is selected for each topic,” Schmeichel explains.

However, AI will do more than just help find the right expertise for each inquiry; it increasingly supports routine tasks in HR, creating more time to invest in personal care and dialogue. The use of Joule, SAP’s AI copilot, provides employees with a central point of contact and helps enable significantly faster and more intuitive navigation through the diverse digital HR services, relieving the burden on both employees and HR teams in daily operations.

Precisely because technologies like Joule increasingly resolve standard inquiries efficiently, personal conversation in complex situations gains additional importance. Schmeichel also emphasizes this development: “In the past, there were already pilot projects designed to enable this direct contact with the HR department. But only now do we have the technical capabilities for smart resource allocation and the corresponding capacity through the strategic further development of our HR business model.”

People centricity as integral pillar of our people agenda

The rollout of the P&C Lounge began in late 2024 with pilot projects in Italy and Japan. “We deliberately chose two culturally very different countries to see how the offering would be adapted in each,” Schmeichel explains. “While in Italy practically all appointments were booked immediately, Japan’s response was initially reserved for the first two weeks. But then the offering was well-received.”

Following the recent rollout in Germany and the United States, the P&C Lounge is now available to all 110,000 SAP employees in over 70 countries. SAP adapts the offering to local conditions. For example, in the United States, due to vast geographical distances, there will be a stronger virtual component, while in other regions primarily in-person meetings are offered.

With the P&C Lounge, SAP positions itself as a pioneer for an HR strategy that places people at the center in the AI age. “In the current transformation- and technology-driven changes to the world of work, we at SAP can position ourselves as an attractive employer—with the human component being put at the center,” Schmeichel explains.

Customer interest is significant: “We currently see great interest in customer conversations to learn more about how SAP deliberately emphasizes and supports the human factor in times of artificial intelligence.”

The P&C Lounge is a perfect example of this approach of meaningfully combining technology and human interaction. “Our ambition with the P&C Lounge is to set new standards for what is possible in global HR support,” Schmeichel concludes. “It’s about the optimal combination of people-centricity and modern technology in a new world of work.”

As organizations accelerate digital transformation and confront widening skills gaps, external workers—once seen primarily as a cost-containment measure—are now a strategic source of agility, innovation, and expertise, giving businesses the competitive edge they need to thrive in an AI-driven economy.

External talent already represents a significant share of the labor: about 20% in the UK and 40% in the U.S., with projections reaching 50% globally by 2050. This surge reflects the growing demand for specialized skills and flexible cost structures.

A new global study sponsored by SAP and conducted by Economist Impact captures this shift. Drawing on insights from more than 2,000 C-suite executives across industries, the report, “From Cost to Capability: Redefining External Workforce Strategy in 2025,” reveals how the external workforce is evolving from a transactional resource into a core capability that drives adaptability and resilience in the AI era.

The findings underscore a critical imperative: organizations must rethink how they engage talent, integrate technology, and foster collaboration across procurement, HR, and finance to unlock the full potential of external workers.

From cost to capability: a strategic pivot

In 2023, nearly one-third of organizations cited risk reduction as their primary reason for using contingent labor and service providers. By 2025, that number dropped to just 6%. Today, cost efficiency (74%) and access to specialized skills (62%) dominate the list.

Cost efficiency is no longer about short-term savings. It’s about managing broader business risks, from financial exposure to talent scarcity. As Professor David Ulrich of the University of Michigan notes in the report, “To mitigate risk, businesses need to reduce fixed costs, and labor is often a high fixed cost that needs to be seen as a source of growth.”

Leaders increasingly view external talent as a long-term solution for project-based and technology-driven work, especially in fast-moving fields like AI, automation, and data science. Looking ahead, 64% of executives plan to expand their talent networks within three to five years, up from 54% last year—clear evidence that external workforce strategies are becoming integral to workforce planning.

Building a holistic talent ecosystem

Economist Impact’s research points to the rise of holistic talent supply chain management—a model that unites HR, finance, and procurement to forecast talent needs, close skills gaps, and treat the workforce as a dynamic ecosystem rather than a fixed headcount.

This evolution builds on the themes from previous Economist Impact Procurement Imperative reports, where procurement shifted from cost controller to strategic orchestrator of risk, sustainability, and innovation. Forward-looking organizations now embrace “total talent management” models that integrate people, platforms, and partners while aligning culture and communication across internal and external teams.

Breaking down silos and embedding digital tools for real-time visibility will be essential to managing an integrated, skills-based workforce that adapts quickly to business needs—while ensuring external workers feel valued and connected to enterprise goals.

Procurement at the center of workforce transformation

Procurement leaders are moving beyond sourcing and compliance to orchestrate entire talent ecosystems built on governance and collaboration. Yet the function faces challenges: confidence in procurement’s workforce management skills fell from 51% in 2024 to 43% in 2025, reflecting the complexity of its expanded scope.

CFOs and COOs are also taking a more active role, linking external workforce oversight to financial, compliance, and ESG performance. This trend echoes Economist Impact’s “The Resilient Edge: Procurement in an Era of Polycrisis” report, which showed procurement’s remit expanding as risk management becomes central to business strategy.

To succeed, procurement must double down on visibility, digital integration, and strategic alignment. Platforms that unify workforce data—from contingent contracts to skills mapping—will enable teams to balance cost optimization with agility and governance.

AI: driving agility and accountability

Artificial intelligence is reshaping how organizations manage external talent. According to the report, 68% of procurement leaders cite AI proficiency and ethics as their top development priority over the next 18 months. AI can predict workforce needs, automate sourcing, and fill gaps in emerging fields like agentic AI and automation. The payoff: higher productivity and faster decision-making.

But AI also raises a critical questions: who benefits from efficiency gains? How should productivity improvements be measured? Answering these will require new cost models and shared accountability across the enterprise.

As seen in earlier Economist Impact research, AI is once again a catalyst for transformation, redefining how organizations manage, measure, and mobilize external talent.

The external workforce of the future

The evolution of the external workforce underscores a broader truth: agility, capability, and collaboration now define competitive advantage.

Organizations that treat external talent as a strategic asset—integrating governance, data, and culture across internal and external teams—will be best positioned to respond to technological change and seize new opportunities.

To meet these demands, companies are turning to solutions like SAP Fieldglass and SAP Ariba, which help connect procurement and external workforce management. These solutions can deliver the visibility, intelligence, and agility needed to manage today’s dynamic workforce ecosystem.

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

WALLDORF — SAP SE (NYSE: SAP) today announced that Brose, a global automotive supplier, has successfully migrated its central SAP systems to SAP Cloud ERP Private solutions on Amazon Web Services (AWS), marking a major milestone in its digital transformation journey.

In just six months, Brose transitioned its mission-critical systems from internal data centers to the cloud, including complex production processes such as just-in-time and just-in-sequence operations across its global manufacturing plants. The migration was executed without any disruption to customer deliveries, underscoring the robustness of the solutions and the strength of the SAP-Brose partnership.

“This cloud migration makes Brose faster, more flexible, and more resilient—and strengthens our position as an innovative partner for the mobility of the future,” said Stefan Krug, CEO of the Brose Group. “Challenging times in particular show how important digital transformation is. I’m proud of our team’s dedication and the seamless collaboration with SAP.”

The project is considered a reference implementation for the automotive industry and sets a benchmark for future SAP cloud initiatives. Brose’s successful deployment demonstrates how SAP Cloud ERP Private can support high-performance manufacturing environments while enabling scalability and innovation.

“Brose’s rapid and disruption-free migration to SAP Cloud ERP Private exemplifies the power of the cloud to drive agility and resilience in the automotive sector,” said Thomas Saueressig, member of the Executive Board of SAP SE. “This collaboration showcases what’s possible when industry leaders embrace transformation with speed and precision.”

Looking ahead and reinforcing its role as a pioneer in automotive digitalization, Brose will continue to work closely with SAP and other ecosystem partners to strengthen its foundation of SAP cloud solutions to enable the usage of the latest innovations such as business AI.

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Media Contact:
Lesa Plingen, +49 622 776 9000, lesa.plingen@sap.com, CET
SAP Press Room; press@sap.com

Top image courtesy of Brose

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At the SAP Transformation Excellence Summit in The Hague, the Netherlands, last week, with over 1,500 prospects, customers, and partners in attendance, SAP LeanIX, SAP Signavio, and WalkMe announced a range of new features and products. The theme of the summit, which followed the SAP Transformation Excellence Summit in Austin, TX, in September, was “Power Up.”

The announcements underlined all the ways that SAP’s Business Transformation Management solutions, and the integrated toolchain to which they belong, can empower organizations to develop a scalable and sustainable transformation capability.

Cost optimization, EA standardization, and AI adoption

Companies increasingly look to fund innovation, particularly when it comes to AI, by digging into existing budgets.

At the summits, André Christ, co-founder and general manager at SAP LeanIX, announced new features focused on application TCO (total cost of ownership) to help companies find cost savings across the IT landscape that can be reallocated to more strategic investment. These TCO features include the addition of cost KPIs to the architecture executive dashboard, the ability to enhance factsheets with configurable calculations, and an application TCO view in the application landscape report.

Christ also announced a new approach to target architecture planning in SAP LeanIX, allowing customers to start by diagramming their future state and then modeling backwards. Architects and business leaders thus can get a more streamlined experience, from design to execution, allowing them to make thoughtful, data-driven decisions every step of the way. 

To help further facilitate landscape transformation and management, Christ also announced the upcoming release of AI-assisted architecture guidance.

Finally, Christ made several announcements regarding SAP LeanIX’s support for AI adoption and governance. Here, he returned to the AI agent hub in SAP LeanIX Application Portfolio Management announced at SAP Sapphire. Just as SAP LeanIX can serve as the single source of truth for the application landscape, SAP LeanIX can now serve as the single source of truth for AI agents. This begins with the discovery of agents—custom agents, Joule Agents, and third-party agents—and their subsequent tracking and management.

The goal of SAP LeanIX’s agent governance features is to allow organizations to understand what business capabilities agents support, what applications they access, and where they can have the greatest impact. To this end, Christ further announced a new agent radar report and the ability to assess agent adoption through executive dashboards.

As the last announcement with regard to AI, Christ also announced the launch of the MCP server for SAP LeanIX solutions. Model context protocol (MCP) servers are an open-source standard interface that links AI models with enterprise data, helping AI assistants connect to SAP LeanIX workspaces and inventory data. This feature helps organizations leverage AI agents to maintain data and activate AI workflows.

With the AI agent hub and the MCP server, SAP LeanIX can help accelerate the adoption of AI agents while also enabling consistent and scalable governance.

Process excellence, untapped value, and the organization of the future

The summit in Austin also afforded SAP Signavio’s Founder and General Manager, Gero Decker, the opportunity to talk about new features and capabilities in the SAP Signavio portfolio. Just as Christ talked about the ways that SAP LeanIX helps free up resources to fund innovation, Decker focused on the ways SAP Signavio supports organizations in their “quest for value.”

Transformation is not an end in itself. The goal of transforming the IT landscape, processes, and even the overall business is to unlock and realize new value. SAP Signavio has long helped companies find and pursue opportunities for such process improvement and value creation. Now, the AI-enabled transformation advisor, when connected to SAP Signavio Process Insights, can make this even easier by allowing users to use text-based prompts—such as “Can I reduce costs in my sales operations?”—to help generate analysis and recommended next steps.

While improving individual processes in this way can deliver real value, processes don’t run in a vacuum. In order to address this, Decker also announced transformation management capabilities providing visibility into the interconnections and cross-effects between processes.

By allowing customers to better see and understand the impact of transforming processes on one another, SAP Signavio solutions can enable truly holistic, data-driven decision-making.

Decker also addressed agentic AI by introducing a number of Joule Agents that will see general availability in Q1 2026. These agents, which will include a Screen Guide Agent, a Value Case Creation Agent, a Dashboard Analyzer Agent, a Process Content Recommender Agent, and a Workspace Administration Agent, can enable SAP Signavio solutions to help automate repetitive tasks and accelerate content discovery.

A new breed of digital learning technology

SAP completed the acquisition of WalkMe shortly before last year’s summit in Frankfurt, Germany. In The Hague and Austin, WalkMe took the stage as a key player in the Business Transformation Management portfolio.

The big announcement WalkMe shared at the summits focused on a new digital learning offering. By embedding training directly into the applications employees use every day, even when workflows extend across multiple applications, this new solution can empower learning teams to give employees both a comprehensive learning infrastructure and content they need to keep up. 

The key capabilities of this solution include: comprehensive training delivery with in-app search and discovery, in-app consumption, and customizable learning portals; intelligent content authoring with AI-first authoring that turns prompts and company knowledge into multi-media, multi-modal experiences; and the ability to curate and expose training in context with flexible conditions and triggers and behavior-based segmentation.

These capabilities come equipped with powerful analytics so you can measure and understand user behavior and engagement as well as assess content performance.

The transformation journey is just beginning

The summits showcased the power of SAP LeanIX, SAP Signavio, and WalkMe as individual portfolios as well as their combined power as the foundation of a transformation capability. The events also highlighted the amazing potential of these solutions to shape the way companies transform into the future.

At a time when AI is disrupting operating models and every function across the enterprise, the summits offered a reminder of the central role SAP can play in this disruption. From funding and managing transformation to enabling the workforce to adapt and excel in a rapidly changing world, this portfolio of tools can give every organization what they need to help address the challenges of today while unlocking opportunity for tomorrow.

Matthew T. Grant is a senior writer for SAP LeanIX and SAP Signavio.

Top photo copyright: Christian Palm

Time is running out for Europe’s automakers to prepare for the new carbon emissions rule. The EU automotive industry, which is responsible for 6% of total EU employment and 7% of EU gross domestic product (GDP), will be heavily impacted by the EU’s Carbon Border Adjustment Mechanism (CBAM).

The new regulation will require companies to account for carbon emissions on select imported products. For the auto industry, the steel and aluminum categories are especially critical.

Complete automobiles are not currently covered by CBAM, but the automotive sector is among the most exposed because of its dependence on emissions-intensive materials. Components such as body panels, chassis, frames, and battery enclosures rely heavily on imported steel and aluminum.

CBAM is currently in its transition phase and will enter the definitive phase on January 1, 2026, meaning that companies need to track their imported emissions on covered products throughout 2026 and begin purchasing certificates for those imported, tracked emissions in February 2027, with the first report due August 2027.

CBAM costs will add up quickly

The modern passenger vehicle contains around 1 tonne of steel and 200 kilograms of aluminum. Global averages hover around 1.9 tonnes of CO₂ emitted per tonne of manufactured steel, and each tonne of primary aluminum produces around 15 tonnes of CO₂.

With analysts projecting carbon ETS prices could reach €150 per tonne of CO₂ by 2030, a newly manufactured vehicle could soon be subject to €300 in CBAM certificate costs, assuming manufacturers import 20% of the necessary steel and 54% of the required aluminum, consistent with EU import data. Given that Germany produced 4 million cars in 2024, German automakers and component manufacturers could be on the hook for about €1.2 billion in CBAM certificate purchases in 2027.*

Looking past 2027, the European Commission plans to add categories like chemicals and plastics to the regulation, bringing more auto parts under the CBAM umbrella and making it even more important for European automakers and component manufacturers to solidify their CBAM strategies today.

CBAM preparations for automakers and component manufacturers

Across the EU automotive industry, companies seem insufficiently prepared for the new phase of CBAM.

This is not completely due to inaction by companies—EU regulators have not yet finalized details of the emissions value calculations methodology or how to verify data. That said, regulators already clarified the scope of companies that must report and the timelines to purchase certificates.

With this information, it’s now crunch time for European automakers and component manufacturers to get ready for the rules taking effect in January 2026. Here’s what they should prioritize.

1. Get familiar with CBAM and evaluate your process

The core elements of CBAM have been defined and companies must act now. If you haven’t done so yet, start by understanding the overall process and requirements.

If you are in scope—meaning you meet the de minimis threshold of either importing more than 50 tonnes of CBAM affected goods per year or 100 tonnes of embedded CO₂ annually—determine which parts of your supply chain are most affected. Identify your top suppliers and imported goods, develop a focused approach for obtaining actual emissions data from those suppliers, and assess the potential financial impact. As more materials come under the scope of CBAM, and as the carbon ETS prices rise, the financial impact will increase in the years ahead. Companies must prepare to meet these new obligations and manage this financial impact.

2. Collaborate with your suppliers

Identify and focus on your most critical suppliers—typically the top 50 to 100—and build a targeted engagement plan while defining an informed approach for the broader supplier base. Consider updating procurement terms to require future data sharing and provide support to suppliers in educating and calculating emissions where needed. Close collaboration will be essential to obtain actual emissions data to avoid the more expensive default values and identify decarbonization potentials. 

Accessing trusted supplier data is one of the biggest challenges facing companies today.

While the EU provides mechanisms for data exchange between suppliers and importers, Catena-X, an industry network for the European automotive sector, in combination with third-party data exchange software, offers an alternative to collecting trusted, standardized emissions data. Catena-X enables companies to collaborate and share data in a trusted environment. It brings together manufacturers, technology providers, and suppliers to standardize data sharing processes across the value chain. Beyond data exchange, these networks foster knowledge sharing, allowing members to learn best practices, align on standards, and accelerate compliance readiness collectively.

To participate, companies typically register with the network, adopt certified software that supports standardized data exchange, and begin collaborating with other members. This approach ensures interoperability and automates trusted emissions data collection. Catena-X is actively refining its scope and standards to support CBAM.

3. Find the right technology for your business

Most importantly, you want to find the right technology partner that will streamline CBAM reporting and support the integration of carbon into core financial accounting processes.

The EU CBAM report requires a lot of data, all of which can be requested, filled, and reported automatically using actual emissions values with tailored, ERP-based systems. The SAP Green Token solution can support CBAM declarant reporting by enabling standardized, auditable reporting workflows. The SAP Green Ledger solution will manage the certificate repository and help ensure financial and carbon accounting of CBAM emissions and certificates in alignment with accounting standards like US GAAP and IFRS (planned for H1 2026).

Manual processes, like e-mails and Excel files, are prone to error, do not scale, and will make CBAM compliance time-consuming and resource intensive.

Prepare your systems for CBAM compliance

CBAM is set to reshape material sourcing in the automotive industry by introducing carbon as a cost factor and driving transparency across global supply chains.

The ideal scenario for automakers and component manufacturers is to take decisive actions to decarbonize—such as sourcing low-emissions steel and aluminum, increasing circularity efforts, and optimizing product design to use less CBAM materials—while fully automating CBAM compliance.

Access to accurate data on supply chain emissions—and their financial implications—provides the insights that business leaders need to decarbonize and reduce risk in the years ahead.

The right combination of software tools and industry network collaboration can enable cost-optimized and automated CBAM compliance and deliver valuable supply chain intelligence. SAP Sustainability solutions can deliver measurable ROI by automating data collection and workflows and enabling finance teams to move beyond manual processes toward strategic analysis and action. This helps create a scalable foundation for ongoing carbon cost management while supporting standardized data exchange and collaboration across the value chain.

Start preparing now to ensure your business thrives as the 2026 CBAM definitive phase approaches.

Read the CBAM playbook and watch the CBAM webinar to learn more.

Thomas Janzen is an industry expert at SAP SE.

*This is a back of the napkin calculation to illustrate the potential impact. This is based on data that shows the EU imported 27.4 million tonnes of finished steel products in 2024. The EU consumed about 129 million tonnes. Therefore, we assume  imports account for roughly 20% of EU steel use. In 2023, 54% of the aluminum used in the EU came from imports. Using these averages means about 2 tonnes of imported CO2 per vehicle, or €300, assigning 20% of 1 tonne of steel emissions and 53% of 200kg of aluminum emissions.