The Exchanges

Q I imagine for someone like yourself, like the short term numbers, you know, might look better. Like, oh, look at our division. We're highly profitable. But in, in the way that you're talking about the fact that we have this fast moving economy, it's just not a winning strategy, right? To just say, all right, let's just automate and be more profitable. As opposed to keep up with what's next.

A I mean, what I tell my team is if I look at, I mean, our portfolio is pretty wide. Um, but if you sort of go to one solution area or within one solution area, a single product, you can argue we could get to teams of a thousand or 2000 even that are focused on one product area. And I talk to these teams and I say, Hey, listen, in today's world with the tech that's out there, a 200% startup can actually operate at the throughput of what we operate with 2000 or a thousand. Where we sort of maintain and sustain our advantage is if we take our 2000 and now operate it at the pace of 8000, now that's going to be hard for somebody to go do with 50 or a hundred people. So for us, it's as much about, hey, keeping the staff, maybe even growing it so the pace of innovation is just going to be hard to match with anybody that comes up now with some new tools, generative coding, generative development, and say, hey, now we've got this app and that app, but we need to be able to keep that same distance. Um, from an innovation throughput perspective, if that makes sense.

AI assessment note: “So for us, it's as much about, hey, keeping the staff, maybe even growing it”

Q and they'll figure it all out and you don't really need, uh, much structure underneath. And what you're saying is if I'm hearing you, right, basically like, yeah, you can get an ROI from a large language model. Uh, but there needs to be a structure built in. Otherwise it's going to, I guess, hallucinate and get things wrong and not do what you want. Is that the right read?

A Yeah, I think that's the right read. That's one, right? And I think we need to be pragmatic because That end state of everything is going to be run by agents, billions of agents. I mean, I think it's just, it's an unrealistic, hyped up, uh, end state right now that we're not ready to get to, and I think there's a lot of other people that are now saying the same things as well, that, hey, it's not going to be a year of agents, it's going to be a decade of agents, because it's going to take a little bit for us to sort of go figure out the accuracy, the trust, and the reliability on it, and we believe in the same thing, but we have to sort of go through those steps, and one of the things I like to sort of, Make fun of ourselves in some ways is, you know, we're not going out there and announcing like thousands of agents. And I think somebody came to me and said, well, you guys just only announced this many agents. You could have sent an email. You didn't need a conference for it. Um, but this is where our, our point of view is, listen, you want to do the stuff that's pragmatic, that's grounded, that's creating value and not just the hype that sits on a shelf somewhere that nobody really gets any value from.

AI assessment note: “Yeah, I think that's the right read. That's one, right?”

Q How about, how about, how about now? Yeah, let's hear it.

A Yeah, how about now? So what, what we are trying to do is we're trying to push the envelope in any direction, um, possible to be able to really think about how the world will change, and I will tell you, As we discussed, if you look at the role of a product manager, I think gone are the days where a product manager is just writing a spec and sort of giving a set of instructions or requirements for somebody else to go build, like a product manager necessarily now can be empowered to generate an app and get it to 40, 50 in some cases, depending on how good the models are, if you have some fine tuned models, 70, 80%, and then hand over in collaboration to a set of senior engineers now that take it to the last mile, if you will, exactly the same example that you get with CEOs generating apps on themselves, if you will. And as part of that process, sort of core set of design and user research constructs are built in, and of course, all the fundamentals and the foundations of, Test automation, um, as well as documentation sort of comes out of it as well. So I think we are actually at SAP piloting many different models. So across our, our many different product areas, we have a bunch of what we call front runner teams that we've given this freedom to innovate on their own. So we're not pushing down a point of view top down to say, hey, thou shall have This role that does this function…

AI assessment note: “like a product manager necessarily now can be empowered to generate an app”

Q said, 74% of businesses using generative AI are seeing an ROI. So, uh, we'll talk about ways to get better ROI from these tools. But first of all, I'm curious to hear your perspective. Which one of those studies was closer to the truth? Not asking you to agree completely to either one, but who has the right idea and which one might've been, might've been a little bit off.

A So I think from my perspective, it's a bit nuanced, right? I think it depends on both the use case and the function you're talking about. So if you clearly take software development at SAP, um, you know, you can, you can argue sort of I'm running the supply chain function of a software development organization. So for me, our supply chain, because of some of the tools that exist, we're definitely seeing value that's out there. We're still seeing a lot of untapped value while, you know, I think We're generally, um, within 10 to 20%, even better already with the tools we've rolled out with the potential of what we just discussed a few minutes ago. I think that the potential is, is multiples of, uh, of what we delivered today from a throughput perspective. So I think in this space, it works. Now, if you change domain, maybe you get into finance or just, you know, really hardcore supply chain, if you will, the front office and others, then you get by industry into, into a mixed place. And our point of view, From SAP in here is, uh, is very simple as well, and we, we tried to articulate it, um, at our, uh, couple of events that we had in the fall, and it resonated very well, both with customers and industry analysts as well, which is Listen, we believe that for ROI to stick, um, you need to have, um, a seamlessness of AI into the core of what you do, into the flow of things, and tha…

AI assessment note: “I think it depends on both the use case and the function you're talking about.”