As businesses rapidly evolve in a fast-paced environment driven by artificial intelligence (AI) and automation, Sanket Deodhar, Vice President – Digital Natives and Startups, SAP India, highlights the importance of hyper-growth startups considering listing or going public to adopt SAP as a crucial first step towards compliance. Emphasising the significance of early adoption of technology in the context of India’s digital transformation, he underscores SAP’s philosophy of integrating AI directly into its solutions to facilitate seamless adoption. Read on to learn about SAP India’s initiatives in empowering startups, fueling growth, ensuring operational efficiency, and aiding in product development.
EconomicTimes.com: A 2023 SAP India-Zinnov digital study said that 37% of startups plan to increase their spending on enterprise applications by more than 15% in 2023. Given this context, could you map how SAP has been actively contributing to the growth of startups that are aiming to leverage enterprise tech to scale up? What is the role of data and analytics in powering this journey?Sanket Deodhar: From an SAP India standpoint, our association with startups has been both fruitful and humbling. Over the last four years, we’ve recognized the huge potential the start-up world offers, especially in a country like India, which has the world’s 3rd largest start-up ecosystem.
When we initiate discussions with startups, many of them face similar challenges. To begin with, most startups today require adequate tech infrastructure to help them diversify business, scale up operations and acquisition and retention of the right talent. In fact, as per the study, we found that 81% of the start-ups reported customer sentiment as one of the biggest business concerns.
Another important challenge revolves around compliance and financial transparency and adherence to the law of the land. Another challenge lies in balancing customer acquisition costs with sustainable, profitable growth during their hyper-growth phase.
The third challenge is to create a culture of positive employee experience where the new workforce not only stay but also contribute to the startup’s growth. SAP cut across all these three aspects of their businesses effectively. We not only support these companies in establishing a strong backbone, enabling them to be compliant , but also expand their operations across different geographies of the world.
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Another fundamental area where SAP significantly supports startups is in data management; this is where analytics comes into the picture. Startups, generating extensive data across customer acquisitions, supplier interactions, and employee operations, soon recognise the need to derive tangible outcomes or actionable insights from this wealth of information. Catering to this demand, SAP has been providing a lot of data-driven insights pertaining to sales costs, profitability analysis, branch analysis, and the implementation of an omni-commerce strategy. An apt example here would be the work we’re doing with WayCool Foods, India’s leading food and agri-tech company. Using SAP’s advanced analytics, powered byE&S dashboard technology, the company has been able to digitally transform and grow sustainably.These instances illustrate the pivotal roles SAP plays in fuelling growth and ensuring the seamless operation of the startup ecosystem.
EconomicTimes.com: Could you give us a broad outlook of startups from which primary sectors can benefit by adopting a strong digital core on the cloud?
Sanket Deodhar: I would say that our relevance spans across every sector. Today, we operate in over 25 industries globally on an enterprise scale. Specifically within startups, our engagements span extensively around fintech, including payment gateway, agritech, and pure e-commerce companies. Additionally, we are now working with Software as a Service (SaaS) companies. So, the spectrum of engagement is quite broad.
From an SAP standpoint, our experience working with enterprise customers across diverse industries has enabled our solutions to create value across every sector. This has resulted in a meaningful impact on businesses as they adopt the digital core and build a strong foundation. Last but not least, SAP has played a crucial role in supporting the growth journey of the booming tech sector, which continues to have a significant impact on STEM talent.
EconomicTimes.com: Given SAP’s strategic emphasis on investing in AI, could you explain how startups can leverage AI and automation to streamline operations, potentially reducing the burden of manual tasks, improving customer experiences and enhancing decision-making processes?
Sanket Deodhar: Our customers are not only using Gen AI to streamline and automate manual tasks but also transitioning to an era where they’re resolving customer issues through various channels and AI-powered bots that we have developed based on our technology. However, this just scratches the surface. The AI assistant we’re developing has the potential to revolutionise business narratives and solutions across industries. SAP’s philosophy revolves around integrating AI into the very fabric of the business applications our customers use. By doing so, we enable AI to address business challenges and aid in decision-making processes.
We have been seeing an uptake of our strategy across the board, especially within startups, illustrating a take-off of our storyline in terms of Gen AI being embedded into all our SAP solutions.
EconomicTimes.com: Could you share some insights into the compatibility of your enterprise tech with existing systems and applications, especially from the point of view of minimising disruptions and optimising existing workflow?
Sanket Deodhar: This isn’t just a concern for enterprises but spans across the board, including startups. This is where the SAP philosophy comes in, where the aim is to integrate AI directly into our solutions. Rather than creating a separate platform where customers need to navigate a different system and transfer data to make AI functional alongside their existing systems, SAP’ core business approach or strategy revolves around embedding Gen AI and other deep technologies directly within our applications.
As a result, when customers use our AI-woven applications for tasks such as procurement, payment, hiring, retiring, recording, reporting, or within the customer experience stack like cash-to-order processes, they are likely to experience AI interventions seamlessly integrated within the application. These interventions will manifest as solutions, Gen AI enhancements, or bots, making the software itself intelligent and deeply integrated within the transactional system. This distinct approach sets us apart from others in this field.
We firmly believe that for AI to be effective, it must be seamlessly integrated as an intrinsic part of business applications. This approach will combat the challenge of integrating legacy systems with new systems. Most of our customers are currently in the process of upgrading their legacy SAP systems to the new SAP S/4 HANA, which inherently includes numerous Gen AI use cases. Additionally, SAP Business Technology Platform enables our customers to develop their solutions on top of SAP S/4 HANA.
EconomicTimes.com: How are enterprise customers navigating the introduction of Gen AI into business solutions, especially as the revenue models for Gen AI are still evolving? Do you sense a rush to adopt it driven by a fear of missing out?
Sanket Deodhar: Today, businesses are contemplating: What’s my strategy for AI, especially Gen AI, because it’s poised to disrupt the fundamental workings of businesses, and that’s becoming increasingly apparent. The understanding among our enterprise customers today regarding the significance of generative AI for their business users and customer outcomes is widespread. While revenue models are evolving, we’ve aimed to simplify this technology for our customers. Towards that end, SAP’s current approach is to make this technology readily available and democratise it across our customer base. Our goal is to ensure that adopting Gen AI doesn’t necessitate the need to reinvent the wheel. Instead, by fulfilling the mandatory upgrades, our customers should be able to access most of these use cases seamlessly within their environment.
Moreover, there’s an undeniable awareness of the impact of Gen AI. It’s not solely driven by a fear of missing out; rather, it’s enabling us to achieve things that we couldn’t before, such as faster turnaround cycles, insights generation, and streamlining processes—areas where enterprise customers are keen to make significant strides. These evolving discussions around Gen AI are not just about rushing to adopt but about recognising its inherent value. This aspect is critical and profoundly important for most of our customers. While the revenue models for Gen AI will continue to evolve, depending on the use cases and complexities of the problem that we address, SAP’s current focus is on facilitating Gen AI adoption for all our customers following our recommended path.
EconomicTimes.com: As Gen AI becomes more and more prevalent and necessary, in a sense, how would you view it through the ethical lens, especially the ensuing conflicts, data validity bias, and other inherent biases and potential job displacement?
Sanket Deodhar: Absolutely, I think all these are valid thought processes and discussion points that merit debates and discussions. These concerns call for a concerted industry-wide approach, and in some instances, interventions from government bodies, particularly regarding data validity and the usage of AI, including Gen AI, in business. Understanding the extent and impact of this usage is something that only time will reveal. How we adapt or implement guardrails around it remains to be seen. Presently, most of our customers are approaching Gen AI not with a primary concern of potential job displacement, but rather with a focus on leveraging this technology to fuel their growth. It’s about doing more with the resources at hand and potentially elevating the roles of individuals engaged in mundane tasks.
EconomicTimes.com: Indeed, there’s a concern that certain job profiles might become redundant, or as previously mentioned, certain mundane jobs might transition.
Sanket Deodhar: From what we’ve observed with our enterprise customers, the perspective isn’t centred on job replacement but rather elevating our workforce up the value chain. It’s about seeking growth with the existing or slightly expanded workforce, rather than fixating on displacing individuals from their roles. The approach fundamentally differs—it’s not about replacing people but about enhancing growth, augmenting customer engagement channels, and gaining deeper insights from the existing data. These Gen AI use cases are gaining prominence in our decision-making processes.
EconomicTimes.com: Could you talk to us about the critical issue of cybersecurity and regulatory compliance, especially highlighting how your enterprise tech solutions can protect sensitive data and ensure companies meet industry-specific regulatory standards?
Sanket Deodhar: Looking back at SAP’s history, our primary commitment has been to provide a robust and stable operational system to our customers . When I say this, what I mean is that the solutions that SAP offers are designed to be fully compliant with the regulations of a particular geographical area. Every transaction within our systems, whether financial or procurement-related, is equipped with checks and balances ingrained in SAP’s architecture. These checks ensure adherence to accounting and compliance standards that auditing firms typically require. By simply conducting transactions or employing SAP’s established best practices, most startups can achieve compliance effectively, encompassing taxation laws and other regulatory compliances that they must adhere to.
Having extensively worked with diverse organisations, spanning from the most complex to the smallest of entities, SAP has integrated proven processes and best practices into its systems, readily available for our customers to use ‘out of the box’. This becomes an invaluable template for startups, offering them proven global best processes and practices to adopt and align with.
EconomicTimes.com: Could you provide a blueprint for aligning your cloud solutions to foolproof startups? What is SAP India’s vision for Digital India, building custom products, services, and processes and also powering long-term digital transformation?
Sanket Deodhar: I believe this lies at the heart of what SAP wants to achieve in India, bolstered by the support of SAP Labs, our second largest R&D hub, outside Germanyand various global programmes. Our primary goal is to encourage startups to construct their tech infrastructure integrated with SAP. We’re actively fostering an ecosystem where we certify select startup applications, making them available in the SAP digital store. This initiative enables our customers to readily access and adopt innovative solutions. It’s a symbiotic relationship where our startup ecosystem partners benefit by showcasing their innovation, and our customers benefit from accessing these innovative solutions aligned with their needs,
The SAP.IO programme is instrumental in this endeavour. We collaborate with startups that bring meaningful solutions to our customers, incorporating their innovations within our digital store based on digital feedback. This programme bridges the gap between customer needs and available solutions.
Additionally, we are empowering startups within our ecosystem to develop products, processes, and services centred around SAP and take them to market. Our initiatives involve working closely with these startups, assisting in product creation, and providing go-to market strategies. This nurturing and mentorships aid startups in reaching new customers and geographies, expanding their market reach significantly. This endeavour aligns with our larger nation-building strategy, fostering a culture of mutual collaboration. Consider the UPI success story, now mirrored in the booming e-commerce strategy. Being deeply entrenched in these dynamics, we’re engaged not just as clients but as partners, co-creating the digital infrastructure, products, and services on SAP, and for SAP’s ecosystem.
