PwC: How To Make AI and SAP S/4HANA Work For You

The meteoric rise in the past 12 months of artificial intelligence (AI) has many – including firms already using SAP S/4HANA, or who are considering transitioning – scratching their heads about how best to harness this emerging technology for their own needs.

At the SAP NOW ANZ Summit, accounting and consultancy firm PwC provided some fascinating insights into the many ways that AI can reshape the landscape for business using or transitioning to S/4HANA.

Generative AI, with its ability to create new output rather than simply perform programmed tasks, is of particular fascination as larger firms seek to harness machine learning frameworks for instant productivity gains and cost efficiencies.

The SAP NOW ANZ Summit came on the heels of a global CEO study conducted by PwC revealing that 69% of CEOs believed economic growth will decline, compared to 12 months prior when 76% believed the economy was going to improve. “That's an extreme contrast in just 12 months,” PwC Australia Partner Jeremy Pitchford told Summit attendees.

“The second theme that really came out of that is with the disruption organisations are feeling by exponential technologies – and AI really being one of those technologies – 53% of CEOs in Asia Pacific felt their business model would not survive in a decade.”

But PwC Australia Director and Global Head of Innovation, Nicholas Nicoloudis, said AI should be viewed as an opportunity, rather than a threat. “It's not about AI taking jobs,” he said. “It's about spending more time with people, and letting AI do the boring, mundane tasks that you don't want to do every day.”

SAP’s S/4HANA suite is already well positioned to capitalise on opportunities to streamline once-menial processing and analysis work, he said, citing the example of SAP Document Information Extraction. Unlike existing OCR-based invoice handling systems, its processes are powered by machine learning.

“It’s an AI service that can see an invoice, and then automatically match it to master data,” Nicoloudis said. “You don't have to sit there and train it to connect to the different materials and different items within the SAP system. And you can configure it if you have a specific kind of invoice that you need to optimise.”

Of the hundreds of potential AI applications already built into S/4HANA, numerous are designed for handling reconciliations, with a later version of S/4HANA including a highly effective AI-powered intercompany reconciliation tool. “(SAP) had a customer who … used to take 4 days to go through their (transactions) between the different companies,” Nicoloudis said. “They've now got it down to one day.”

With basic AI-powered processes already capable of driving substantial process improvements and cost savings, excitement is building around the potential for Generative AI to push speed and efficiency significantly further.

“We can use generative AI to be able to complement the ability to be able to read through documents, through different reports and grab one report and embed it into another. We think there's real openings in that capability with generative AI,” Nicoloudis said.

Another opportunity is to automate the process of generating Functional Specific Documents (FSD). “There's a customer in the US who is using this now, because it's the most boring thing, having to generate functional spec docs,” he said. “Let AI do the functional spec docs for you, and all the commentaries and things on top.”

Pitchford said a key theme to emerge from PwC’s global CEO study was that short-term decisions made today would have long-term impacts on organisations and their business models.

“You need to think about trying to manage and handle that dual imperative of the short-term pressures on organisations in an economic downturn, and also trying to set your organisation up for the future by investing in technologies that will allow you the agility, the scalability, the flexibility that you as an organisation need to be able to drive your organisation over the next several years and into the next decade,” he said.

With help from PwC, SAP S/4HANA can be a cornerstone technology to set up firms to embrace machine learning-driven technologies such as AI, Pitchford said, adding his firm has worked with more than 2000 customers around the world implementing S/4HANA.

“When we work with customers, we survey them. We collect data around what their expectations were going into their S/4HANA journey versus what they realise on the back end of that journey,” he said. “Most clients feel they get more value out of S/4HANA than they actually thought they would.”