4 ms·
SAP stops most travel and hiring because of AI's soaring cost
- rawland 2mo agoTL;DR: “Under the policy, only Al-related hiring, customer-facing travel and trips directly linked to the company's Al initiatives or mission-critical employee Al training are exempt, reflecting SAP's focus on "be disciplined in how we spend" while expanding its Al capabilities.” no-paywall: https://news.ycombinator.com/item?id=49222851 https://news.ycombinator.com/item?id=49222851
- amarcheschi 2mo agoI would pay to understand what mission critical employee Ai training is that can't be provided in other ways
- jqpabc123 2mo agoIn other words, AI is now driving their budget decisions.
- cineticdaffodil 2mo ago[dead]
- m4rtink 2mo agoSo will AI be what finally kills SAP, making world a little bit better? ;-)
- mathfailure 2mo agoSeems like they're doing fine: https://en.wikipedia.org/wiki/SAP#mwAeo https://en.wikipedia.org/wiki/SAP#mwAeo
- feverzsj 2mo agoLike their systems aren't shitty enough.
- gruturo 2mo agoSo they are using AI to run the company, and AI allocated all the money to AI?
- andrekandre 2mo agoit may just be actually incredible what they are doing. on the other hand it could also be absolutely insane...
- happycube 2mo agoSounds like a paperclip maximizer to me. Seriously, why the duck aren't they running their own AI systems in house???
- KolibriFly 2mo ago[dead]
- cyanydeez 2mo agoteach everyone they live in a lobster bucket, and suddenly everyones a lobster.
- ArtTimeInvestor 2mo agoIt will be interesting to see if SAP can turn into the basis for companies that use AI heavily or if companies that use AI heavily will prefer to replace SAP. Who are the contenders that start fresh with focus on AI? One that comes to mind is IONOS. They seem to be in the process of building something like a "SAP in the times of AI" from the ground up. Starting with the demands of SMEs. It looks like an interesting approach to me: Having a "knowledge base" for each customer, initially filled with the data from the website. Then let the customers add more data. Then offer agents that do work for the customers. Answer calls and emails and do marketing for example.
- sofixa 2mo ago> It will be interesting to see if SAP can turn into the basis for companies that use AI heavily or if companies that use AI heavily will prefer to replace SAP. Considering the human and institutional complexity of implementing ERP, CRM, whatever the hell Concur is supposed to be, etc. I'd bet on most organisations implementing AI around and with those systems instead of replacing them with something vibecoded / "AI native" vendors.
- jimnotgym 2mo agoI have in mind what I think is a very strong framework to allow companies to replace legacy ERPs quickly with AI help. I guess I should get on with it and publish something!
- simianwords 2mo agoIf you believe that AI does add to productivity gains, say equivalent to adding 10-20% employees, would you do anything differently than SAP?
- realusername 2mo agoThese are enough gains that you don't need to believe, they should be measurable
- simianwords 2mo agoNot really. A company can work and do things without having to run RCTs to prove everything. The market itself is the RCT.
- realusername 2mo agoIf you doubt that you have gained something as high as 20% gains, it probably just means you got nothing. And also, individual productivity isn't the same as organisation productivity, especially at such a large company.
- andrekandre 2mo ago> gained something as high as 20% gains all other things being held constant, i suppose it should be as easy as +20% profit rate? tho im not an executive so what do i know...
- throwaway87543 2mo agoIf AI was actually making you more profitable, you wouldn't need to be cost cutting to avoid bankruptcy.
- simianwords 2mo agoI'm not sure who is getting bankrupt?
- alexpotato 2mo agoHaving worked at some giant firms that heavily depend on SAP, I would think their position as "system of record for procurement/production" would get stronger with AI. e.g. AI + a good database of what your company does seems like an excellent combination.
- gruturo 2mo agoWould a technology famous for hallucinating data often enough, and in many context unable to guarantee it won't assume and hallucinate when it feels "confident enough" despite a robust system prompt, be really considered for a "system of record for procurement/production" usage? (yes yes RAG exists)
- notme43 2mo agoIn the ERP space, AI is being used mostly for repetitive tasks, documentation and forecasting-type activities or where a non-deterministic answer might be useful. Scanning in documents and using OCR to create an order, asking what page I use to do X, historical demand modelling and constraint scheduling. Also have seen it used to do order flow type stuff like suggesting products to sell if they buy ABC. I'm not really seeing it being used to do heavy analysis and they've generally been careful not to put it in places where a hallucination could result in a bad business decision.
- victor106 2mo ago> Scanning in documents and using OCR to create an order, I remember this being done more than 10 years ago. The other uses cases you describe also were being done. Of course with AI maybe it’s become easier and cheaper?
- notme43 2mo agoYes but it generally expected documents to be in a certain layout and the user had to fill in a lot of the gaps. It's more able to identify elements on an incoming PO, match a supplier invoice, or create a receipt based on a packing list with inference. EDIT: The other activities, yes I think it made it cheaper and easier. They both required human intervention to make an accurate forecast or execution plan. Forecasting requires humans to do things like apply smoothing factors, identify abormal demand over huge datasets, or identify seasonal demand cycles, etc. Constraint scheduling requires a human to intervene in dispatching and resource allocation as well. AI can do 95% of the work with a proposal, or even control the process. Supposedly much better than historical algorithms. I haven't implemented this part of it, but I've seen it done. The documentation part is much more robust. You can ask it complex questions, like "How do I setup a phantom blow-through part in a MS level 1 BoM?" and it walks you through the entire thing. With the sales suggestions, it can identify things like "The customer is buying spaghetti and pancetta" AI: "They are probably making carbonara, how about some garlic bread?"
- WesolyKubeczek 2mo ago"Daddy, vodka got more expensive now, does it mean you will be drinking less?" "No, kids, it means you will be eating less."
- leoh 2mo agoI sure am glad my employer isn’t a drunk daddy
- qw2187 2mo agoTelling that SAP now exfiltrates all your company data to the U.S. AI cartel: https://www.sap.com/products/ai-platform.html https://www.sap.com/products/ai-platform.html
- mikert89 2mo agoThe big risk for these platforms is that AI reduces the cost to switch to another ERP. IF AI can map all of the data between two different competitors, the whole business model is finished
- johnbarron 2mo agoThat is not what ERPs are used for. Would love to hear how AI is going to help here. This is like a young engineer thinking the CDC machine they just bought, is going to make Airbus and Boeing obsolete...
- mikert89 2mo agoIt’s well known that the moat of system of record is how difficult it is to extract your data into another system.
- zbentley 2mo agoERPs are often used as a lot more than a system of record: they’re directly engaged with as the LOB software point-of-contact by many expert employees, and function as a sort of encoding of organizational behavior. They’re a lot more than a data store or system whose primary value is ingesting info and producing reports. For a lot of business, replacing the ERP is on par with replacing Excel. It’s not about getting the data into another system; it’s about all of the complexity and expertise required to use it.
- RaftPeople 2mo ago> It’s well known that the moat of system of record is how difficult it is to extract your data into another system. I think that is one aspect but not the biggest issue. The specific shape of data and shape of functionality gets built around for decades due to incompleteness of any system, expanding dependencies and changing business needs. Decades of building around the system results in a mountain of work when trying to replace the system, typically a larger body of work than implementing the base system itself.
- budsniffer952 2mo ago[flagged]
- thelastgallon 2mo agoThis kind of thinking (we'll figure it out how to use it correctly, it is awesome technology) is not new. There was blockchain psychosis (blockchain/crypto solves everything!) for a decade, which is now replaced with AI will solve everything.
- frameset 2mo agoA bit of NFT madness to go with the Blockchain stuff too.
- budsniffer952 2mo agoIs blockchain really your analogy here? Something that is also new? You are proving my point. You say it's "not new", but then don't seem to have any gauge of technological history. How long before the internet was monetized? 30 years?
- johannes1234321 2mo agoAbout 30 years ago we had the sitcom bubble. Tulip mania was in the 1630ies, about 400 years ago. There always have been attempts to exploit others for personal gain and people following that. The new thing is the speed in which this happens globally. But there had been other accelerators bringing equal jumps. Introduction of cross ocean telegraph cables, flight, book printing, ... True, modern technology makes results globally available with very little marginal costs. However on the spread of ideas the last item mentioned on the list above is extremely interesting to study: Book printing brought translations of the Bible into more places and took reproduction and interpretation of those texts out of the hands of the few (mostly the church) to broader masses (for as long as people could read) which lead to lots of political conflicts and redistribution of power in Europe with impact to colonies worldwide. By people following one interpretation of a text and derived rules more than another. To a large degree since books with ideas could now be replicated within days instead of years. As now ideas are replicated within minutes rather than days.
- bucket2015 2mo agoAnecdotally, I know several companies that have given the directive of "Use more AI instead of hiring more people". I wonder whether this is part of the story here too?
- drob518 2mo agoThis tells me we’re getting close to “peak bubble.” We saw these same sort of stupid headlines just before the dot-com bubble popped, too. When companies are distorting regular business to do the new thing, they’ve gone past the point of reasonableness on the new thing and we’re ready for a snap-back.
- jwsteigerwalt 2mo agoThis is less of an issue than the headline suggests. I worked for a publicly traded US company remotely. The company was based between Ft. Lauderdale and West Palm Beach Florida. It was a roll of the dice each spring if the CFO would pull the trigger on a travel block for about 6 weeks around spring break when flights and hotels were most expensive. Approvals were available for critical projects. It was only ever about not exceeding a quarterly budget number; nothing else.
- mosdl 2mo agoSAP also made some big acquisitions that cost a lot of cash..
- g42gregory 2mo agoWait, first they stopped hiring because AI is going to replace everybody. Now they stopped hiring because AI, which was going to replace everybody, costs too much. You can’t make this stuff up.
- therealdrag0 2mo agoSometimes buying a tool to make 10 people 15% more effective is a better choice than hiring 1 person.