Embracing the New ERP Mindset

When Eric van Rossum looks back on his 20-plus years working with enterprise resource planning (ERP), he can’t help but marvel at how much things have changed. From his early days as an SAP consultant selling on-premises ERP systems, to his current role as head of product marketing for the company's cloud ERP portfolio, he's seen a stark shift in the way companies approach their most business-critical software. 

“The old mindset around ERP,” he says, “was focused on designing a system that does everything for your business, and then tailoring the processes to the specific way your business operates.” 

He adds: That mindset has changed in the cloud. Now, the focus is on leaner, more flexible ERP systems leveraging business processes that follow an industry standard. Companies are seeing the value of adapting the way they do business to the software, not the other way around.”

Traditional on-premises ERP systems are incredibly rich in terms of functionality, but they’re rigid. Changes and upgrades are cumbersome and require considerable time and effort. So much so, that most companies update their ERP software only every few years, which means they aren’t reaping the benefits of the latest technologies and innovations until years down the road.

That may have been okay 20 or even 10 years ago, but it doesn’t suit the pace of business and technological change we’re seeing today.

Generative AI has brought this reality glaringly to light.

Realising the benefits of AI requires scale, speed, and agility. Business systems need to have significant computational power, the agility to handle frequent updates as AI models continuously improve, and the flexibility to quickly activate and deploy use cases. 

Systems that are built on-premises naturally face challenges with these requirements. For one, scaling on-premises systems to meet increased AI demand and computing power is costly and time consuming. Likewise, significant resources and infrastructure are required to grow and maintain hardware and software systems. But more fundamentally, on-premises data silos and structures hinder the effectiveness of AI by limiting effective data mining.

“Gen AI is revolutionary. It offers an incredible opportunity for businesses to create new value for customers and shareholders,” says Eric “But only if your business is built to handle the requirements of AI.. If your company is stuck running a five-year-old version of ERP, while your competitors are out there introducing new AI tools to the delight of customers, that's not a good place to be.”

The key value drive behind the new approach to ERP, Eric explains, is the ability to be innovation-ready.

“What every business leader wants is a system that enables them to use the latest innovations today, not three years from now, so they can take advantage of new opportunities to further differentiate themselves and grow their business. And those are things only the cloud can enable.”

Going all in on Cloud ERP

SAP has long been the leader in ERP, but in recent years it has ramped up its cloud ERP efforts in a significant way. Last year, the company launched GROW with SAP, a concierge program featuring solutions, tools, and services to help customers adopt cloud ERP with speed, predictability, and continuous innovation. 

GROW with SAP is targeted primarily for midsize companies, helping them run their businesses efficiently with an ERP foundation that grows with their business. At the core of the offering is SAP S/4HANA Cloud Public Edition, SAP’s software-as-a-service (SaaS) ERP product. SAP underpins this solution with more than 50 years’ experience of working closely with customers across every industry, which is why it gives customers preconfigured, industry-specific processes that can be easily adopted.

In his role, Eric has had a front seat to this latest evolution of SAP's ERP. 

“We’re incredibly proud of the reputation SAP has developed as the ERP powering the largest companies in the world. But we want everyone to know that we’re here for businesses of all sizes. In fact, approximately 80% of our customers are SMEs,” he says. “With GROW with SAP, we’re hoping to show smaller companies that they too can benefit from SAP’s industry expertise and our world class ERP system in the cloud.”

GROWing with AI and Sustainability

SAP continues to refine its GROW with SAP offering to provide greater value to customers, with a focus on two key areas: AI and sustainability.

New ERP software can be difficult to adopt and complex to navigate for inexperienced users. This is especially the case with midsized companies, where business professionals are often less specialized and therefore more likely to act in multiple roles.

SAP’s AI copilot Joule, which is available in SAP S/4HANA Cloud Public Edition, revolutionises the way users interact with their SAP system, making every touchpoint count and every task simpler. With Joule, business users can onboard faster and increase day-to-day productivity. 

This year, SAP will release Joule capabilities for:

• Situation handling
• Role-based transactional content
• Conversational search
• Navigating business processes across sales, finance, procurement, and professional services. 

More information will be available at at upcoming SAP Sapphire events in Orlando, Barcelona, and virtually.

SAP is also supporting businesses with their sustainability efforts in a major way. 

“As the company that invented the system of record for finance,” Eric explains. “We’re now creating the system of record for carbon accounting. We have a growing portfolio of groundbreaking solutions that support businesses with their sustainability goals, moving from estimates to actuals, all aligned to their financials.”

As Environment, Social, and Governance (ESG) reporting requirements continue to evolve, there’s urgency for companies to comply and ensure the completeness, accuracy, and auditability of their data. This is where SAP S/4HANA Cloud Public Edition working in concert with the SAP Sustainability Control Tower (SCT) can be a real game changer.

SAP Sustainability Control Tower provides businesses with the platform and capabilities to enable their organisations to monitor their sustainability performance over time and to see if they’re meeting their sustainability ambitions. 

What sets SAP apart is the deep integration of sustainability monitoring with the business processes in SAP S/4HANA Cloud Public Edition, which provides precise and actionable insights rather than the estimates and averages common in competing solutions. 

“Only with a true SaaS model,” says Eric, “Can companies adjust their software to meet the evolving needs of the highly dynamic field of sustainability, in which we expect a significant amount of policy and regulatory changes to emerge.”

SAP is embracing the new ERP mindset, and with offerings like GROW with SAP, it’s intent on helping its customers, both new and existing, realize the tremendous value of flexible, innovation-ready ERP.

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