Philipp Herzig

“What hasn't changed is what customers are seeking for, which is outcomes, right? Outcomes and return on their investment in order to get the things done. And, of course, now AI is an amazing technology that, again, helps to get more things done in the enterprise.”

“You can build two years ago, right, everybody build a rack service. And you could easily, with a POC, blew off everybody's, you know, the CEO's socks and, like, look at how easy it is to build a chatbot on 10 documents. But that but but SAP and and also these large customers, right, they always have a problem of scale. Okay. What do you now with 100 documents? Well, it becomes a little harder. A thousand documents becomes a different engineering challenge.”

“Do you still remember in a when I was a computer science student where the Google guys came in in a in a lecture, and they said, like, hey. I can go home at 5PM because I wrote my tests. And, of course, this was non you still remember that, like, test first or test driven development? It's coming back. The reality is nobody did it. At least I never did it because, hey, it was so much more fun.”

“I always call this the tribal knowledge, the stuff that is not in the system stored somewhere that just lives in people's heads, so maybe in Slack channels, maybe in Teams channels, maybe it was just a discussion on the phone. So how can you drive a decision from that? And then so the question is the agent needs to come back, ask you for input. Now you wanna store that. And now what we do, in the past, we called this process mining. Now we call it agent mining because it will record all these decision traces, these contexts of what the users are entering into the system.”

“Now if you want to do these predictions, quite frankly, then the challenge is large language models are not made for this. The way how they, you know, generate just one token after another essentially in a sequence to sequence modeling. I mean, they're language models. So that and they do this phenomenally well. But if you still wanna do these predictors where you have to go back to these classical machine learning approaches, right, you use XGBoost or AutoGluon and and many of these, AutoML approaches.”

“Usually, I say the the the primary problem, as I said, is is is the problem of a data. Because most of the time, the data is, of course, very disaggregated in a in a in a company. Either because you made certain decisions, how you purchased, solutions in the past, or you did an m and a. So you acquired a company naturally. Of course, they bring a very different IT system landscape as well and so on and so forth.”

“Like like everybody who works today maybe in the finance shared service center. It's for me the equivalent of a junior developer today with Cloud Code. So now they actually become they've got one level higher. They're now not so much anymore, tasked with then writing a lot of the code. With with with codex or with Cloud Code. But they actually then start supervising the code, give feedback, right, and capture, of course, the essence of what the code should look like and then, you know, do much more review and then rather think about what to build next.”

“I mean, for the most part, SAP software is seed based licensed, today with a few exceptions like a Conker or Fieldglass, for example, or the business network. But, you know, very clearly with AI, it was very clear for us that, you know, step by step, it will go towards this consumptive world. At first, consumptive. And then maybe in the next step, once we have more verifiability in the system, then also towards maybe an outcome based license model, to, for example, what Sierra is doing.”

“What I learned actually, and I did this mistake probably more than anybody else in this world, is to kind of pitch the technology. And this is completely wrong. When I sit together with CFO or a CIO, the first question is like, hey. What's top of mind for your business? What are what are current what are your current challenges? And then work backwards to the technology. And that always I always found that this is the most useful approach.”

“What we are focusing on is the optimization domains, obviously. And then if you go into, think logistics, traveling salesman problems, knapsack problems, like all these kind of usual, hard problems in computer science, These are interesting problems where we where some peep where we believe that could be interesting for the future, for maybe different kind of computing paradigm to solve for. Because if you can obviously load your trucks, right, and the and do the route planning even more, the the outcome is, say, the emissions go down, right, and you save a lot of money.”

“SAP is the market leader in enterprise, software applications and platforms. It has 400,000 enterprise customers. Usually, I just running their finance, HR, and supply chain, manufacturing, execution, logistics, warehouse management, and then of course everything on the customer side. End-to-end, like SAP, we always say we have the broadest portfolio in terms of end-to-end running the business end-to-end. This is where SAP started with, giving real-time insight. Usually, I really describe this as it's not just software in itself, it's kind of the operating system of a company essentially.”

“With AI, the same is happening. It is happening on three levels. It happens, of course, on the UI side. The time is clearly over where you design software, where the dump software that requires the intelligence to sit in front of the computer. Then the second one is, of course, the business processes... a rather rigid process, like the standard operating procedure of a company. But now, of course, with these agents, we can blend the structured and unstructured world more seemingly. And then, of course, below that, you have the whole data layer.”

“LLMs, unstructured world, that's all good, right? But most of the time, if you want to plan forward, if you want to make good decisions in a company, you need predictions. Now, the problem is, of course, still today, if we look at these predictive questions... large language models are not made for this, right? In a way, how they generate just one token after another essentially in a sequence to sequence modeling, I mean, they're language models, right? And they do this phenomenally well. But if you still want to do these predictors where you have to go back to these classical machine learning approaches.”

“But SAP and these large customers, right? They always have a problem of scale. Okay, what do you know with 100 documents? Well, it becomes a little harder. A thousand documents becomes a deeper engineering challenge. Last year, everybody could build an MCP server. It was so super simple to hook up your MCP server and do amazing things with it. But that becomes like for 10 APIs, not an issue, 100 because you'll get already context bloat and all these challenges. But we have 20,000 APIs, right? So it becomes just like because it's so huge.”

“Now what we do in the past, we call this process mining. Now we call it agent mining because we record all these decision traces, these contexts, what the users are entering into the system. And then you can either use it to say like, hey, wait a minute, this is actually an anomaly... Or you say like, oh, that's actually a very good improvement. And then you can elevate this to be the new standard operating procedure, maybe not just for Australia, but maybe for the rest of the world or more countries to run your company more efficient because now you'll learn something, how the organization behaves.”