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Ten years in the past, Western Sugar decided that will show prescient: transfer from on-premise SAP ECC to SAP S/4HANA Cloud Public Version. On the time, synthetic intelligence wasn't a precedence on most roadmaps. The corporate was merely making an attempt to flee what Director of Company Controlling, Richard Caluori, calls "a trainwreck:” a closely personalized ERP system so laden with customized ABAP code that it had develop into unupgradable.
Right this moment, that early cloud adoption is proving to be the muse for Western Sugar's AI transformation. As SAP accelerates its rollout of enterprise AI capabilities throughout finance, provide chain, HR, and extra, Western Sugar finds itself uniquely positioned to make the most of the know-how.
"We didn't transfer to the cloud serious about AI," Caluori says. "However that call to embrace clear core ideas and standardized processes turned out to be precisely what we would have liked when AI capabilities grew to become accessible. The clear knowledge, the standardized workflows, the disciplined processes, all of that groundwork we laid for primary operational causes is now the muse that makes AI work. We had been prepared with out even realizing it."
Constructing AI readiness with a clear core ERP basis
Western Sugar's journey started with a well-known enterprise drawback: technical debt. Years of on-premise customization had created a system that was almost unattainable to keep up or improve.
"As a result of we had been on premise, we might do our personal coding in ABAP, and over time we created such a large number with our inner coding that the software program was now not upgradable," Caluori explains. "The quick advantages of transferring to public cloud had been clear: lowered infrastructure burden and entry to straightforward processes refined by SAP. They've been on this enterprise for 40 to 50 years, and so they put all their expertise into this one resolution. Now upgrades simply work."
However probably the most vital benefit proved to be the clear core philosophy inherent in public cloud deployments, which implies the software program is maintained and upgraded by SAP. This strategy, mixed with sturdy API connectivity, created an setting the place Western Sugar's IT division might simply combine programs.
In SAP S/4HANA Cloud Public Version, this mannequin retains core ERP logic standardized and upgradeable, whereas extensions and integrations are dealt with by way of SAP-supported APIs and companies.
"Ultimately, we’ve got decrease complete value of possession, a greater product, and the info high quality and course of self-discipline that's important for AI adoption," Caluori says.
This clear core basis — standardized, constantly up to date, and API-connected — is what makes embedded AI viable inside SAP Cloud ERP.
How clear core processes in SAP enabled AI automation
When SAP started rolling out SAP Enterprise AI capabilities inside SAP S/4HANA Cloud Public Version, Caluori was amped to enhance processes by way of automation and standardization in methods they'd by no means beforehand imagined. The corporate's first main AI implementation centered on central bill administration.
Right this moment, invoices arrive from exterior sources and cross by way of the firewall. In the event that they meet predefined AI confidence thresholds, SAP Enterprise AI mechanically posts them with zero human keyboard enter. Every transaction is constantly evaluated utilizing a traffic-light mannequin: inexperienced objects are processed mechanically, yellow objects are routed for evaluate, and crimson objects are flagged for quick consideration.
"As a result of the bill simply flows by way of the system mechanically, we're held to a excessive commonplace," he says. "The AI-driven performance solely works if the entire course of chain, from buying requisition to buy order to receiving to issuing is clear, so we're consistently enhancing these upstream processes to satisfy the calls for of our AI improvements."
Quantifying the operational impression of AI automation
Caluori estimates Western Sugar has achieved six-figure direct value financial savings by way of AI automation, not accounting for improved visibility and management.
"After I log into my pc now, I can see instantly in actual time what's happening throughout the procurement facet," he says. "I’ve a complete cockpit view that I didn't have earlier than. As a result of I’ve way more visibility, I’ve way more management over operations."
The corporate is now increasing AI adoption into new areas. With Western Sugar's latest transition to SAP's three-speed panorama, Caluori is concentrating on month-end closing processes for AI automation.
"My aim is that AI handles the overwhelming majority of the month-end shut," he says. "Over time, as AI learns what we're doing and the way we shut the books, the aim is to automate over 50 % of the month's finish closing actions. We're additionally wanting ahead to AI-managed procurement networks, and proactive reporting and intelligence, all of which can quickly be doable."
Western Sugar can also be growing predictive upkeep AI for its manufacturing tools — a crucial functionality for its large-scale services, the place tools failures can halt manufacturing and result in losses within the a whole bunch of hundreds of {dollars}. These efforts construct on SAP’s AI and analytics capabilities throughout asset administration and manufacturing programs.
"We've began an inner staff engaged on predictive analytics with AI, the place the system can inform us prematurely if we have to be on alert for particular tools — {that a} explicit machine might break down within the subsequent two or three days or even weeks," Caluori explains. "If we are able to proactively deal with these points earlier than they trigger manufacturing stoppages, it will save us tens of millions of {dollars}."
Managing organizational change alongside AI adoption
Whereas the know-how itself has delivered clear advantages, the organizational impression has been extra complicated. For Western Sugar, modernizing its core programs early — by transferring to SAP’s cloud and embracing standardized, upgrade-driven processes — required not simply new workflows, however a elementary shift in how workers considered change itself.
For Caluori, that readiness is non-negotiable. “Change administration is the number-one key to success,” he says. “We needed to do lots of change administration, not solely round enterprise processes, however round worker habits as nicely.”
That work paid off over time, partly as a result of cloud adoption normalized steady change. As upgrades grew to become routine reasonably than disruptive, workers grew extra comfy with evolution as an working situation.
“Now, when SAP comes with a brand new improve, they know change is coming,” Caluori explains. “The mindset has shifted to being desperate to see what enhancements the subsequent replace will carry.”
And that cultural shift has confirmed crucial as Western Sugar strikes past system upgrades and into extra superior initiatives.
“Now individuals are even keen to maneuver into AI — the larger initiatives,” he provides.
Nonetheless, that cultural readiness have to be pushed from the highest. At Western Sugar, government management — a lot of whom got here from giant worldwide organizations — understands the aggressive necessity of staying present with know-how. That top-down dedication has helped normalize steady change and created the muse required to pursue AI strategically.
Classes in AI readiness from Western Sugar
For corporations contemplating their very own AI journeys, Western Sugar's expertise gives a transparent lesson: AI readiness begins lengthy earlier than AI adoption. The clear core, standardized processes, and robust knowledge high quality that Western Sugar established a decade in the past, pushed purely by the necessity to escape technical debt, proved to be precisely what AI required. And whereas Caluori acknowledges the benefit an early begin gave them, he says the second-best time to begin is now.
"You need to embrace these modifications, in any other case you're left behind," Caluori says. "That steady enchancment is what SAP supplies us, and now with AI capabilities built-in all through, we're seeing advantages we couldn't have imagined after we began this journey."
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