Spend Connect - SAP brings generative AI to enterprise spend

Phil Wainewright Profile picture for user pwainewright October 9, 2023
Generative AI comes to spend professionals as SAP unveils a slew of new tools at its Spend Connect conference.

SAP Spend Control Tower - SAP screenshot
(SAP screenshot)

New generative AI capabilities announced at today's SAP Spend Connect Live conference in Vienna range from enhanced category management and a new Spend Control Tower to analyze spend across the business, to the use of the Joule AI co-pilot to help spend professionals work smarter. Summing up the impact of the announcements in an email interview with diginomica, Muhammad Alam, President and Chief Product Officer, Intelligent Spend and Business Network, SAP, says:

Generative AI has the potential to eliminate the mundane and make time for strategic tasks. This is our moment to unleash productivity gains that have been lacking for years. It's why we're putting a huge emphasis on bringing the power of generative AI across our suite of spend management applications to help customers spend more time on the strategic stuff and improve both productivity and the quality of various outcomes.

For example, the new SAP Spend Control Tower, available from the first quarter of 2024, provides a consolidated view across all spend categories, with the ability to analyze metrics such as financials and carbon emissions, and take actions to save costs or improve processes. Built on the SAP Business Technology Platform (BTP), the underlying architecture includes a data lake that captures all spend data, and can include external data sources. New AI-driven commodity and supplier classification algorithms help improve the accuracy and speed of analysis, delivering up-to-date insights to immersive dashboards that report on factors such as compliance, opportunity analysis, and sustainability. Users can also act directly on these AI-driven insights from within the data visualization layer. Alam comments:

It isn't just about the AI-driven insights, it's also about enforcement and compliance with the click of a button ...

Customers can aggregate spend data in one dashboard and benefit from AI-powered commodity and supplier classification. Now, they're no longer spending hours collecting and analyzing data, but quickly taking action to enforce compliance.

Speedier category management

Generative AI will also save time for users of a newly released category management solution from SAP Ariba. Companies often group goods and services into procurement categories that share common characteristics, such as packaging or IT equipment. This approach has become increasingly important in today's rapidly changing global supply markets to help companies manage suppliers and spend. But collecting, analyzing and reporting on categories typically requires a heavy manual workload, with multiple spreadsheets involved. This is where the new generative AI capabilities come in.

An integration with OpenAI ChatGPT will help category managers by suggesting a category strategy for review and fine-tuning. It will also provide contextual information designed to help them understand market supply and demand, measure risk, and identify top suppliers. Alam says:

It will help procurement professionals build comprehensive and highly effective category strategies faster, saving category managers weeks of valuable time while increasing strategy validity.

Because the generative AI is grounded in SAP data — the category management solution draws on data from Ariba applications for sourcing, contracts and spend analysis, as well as other procurement sources — the risk of misguided suggestions is reduced, says Alam. He adds:

We also place an incredible emphasis on data quality and security. All SAP AI solutions have been built with the highest levels of concern for security, privacy, compliance, and ethics. SAP was one of the first companies to define guiding principles for using AI in our software in 2018. Since then, we have rolled out an AI ethics policy and compliance processes that put responsible AI into practice.

A smart assistant for spend

Joule, the new generative AI co-pilot, is coming to all SAP's cloud solutions, and is due to be embedded in its spend management software next year, with additional use cases planned for the first half of 2024. The smart assistant responds to plain language questions with intelligent answers drawn from business data across the SAP portfolio and third-party sources. Alam highlights potential use cases:

  • Joule could help identify underperforming regions in sales performance, link to other data sets that reveal a supply chain issue, and automatically connect to the supply chain system to offer potential fixes for the manufacturer's review.

  • Procurement professionals could ask the assistant to help identify the right questions to ask a potential supplier, based on past sourcing activity.

  • Joule could also support our Buying 360 capability with tailored recommendations for users as they shop via catalogs and marketplaces and are guided through the procurement process, while the system helps ensure compliance, including approval processes.

Other announcements today include AI-powered supplier risk assessment embedded in source-to-settle software, and a partnership with AI-powered supplier intelligence and discovery startup Scoutbee to integrate its software, and a multi-currency expense payment manager service in SAP Concur.

My take

Spend professionals often get left behind when it comes to new technologies, but in the case of generative AI, the innovation is arriving at pace. Does that create any change management challenges in adopting these new capabilities, I wondered. Alam tells me:

These AI-powered solutions and integrations are designed to simplify work, not complicate it. As with all change, there is a learning period. Workers will quickly realize though, that as they adjust to these advanced technologies, they're spending much less time on manual, low-impact activities and they'll have much more information at their fingertips to act on.

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