Unlock value with AI in SAP Cloud ERP

Executive summary

AI governance through a Center of Excellence (CoE) establishes consistent standards, manages the AI lifecycle, and promotes reuse across the enterprise
Value-driven use-case selection prioritizes AI opportunities by business value and feasibility using an AI heatmap, creating a clear investment focus and delivering tangible business outcomes
Integration across the SAP S/4HANA transformation journey embeds AI into the SAP Activate Methodology to keep AI aligned with business processes and transformation milestones
Clean-core aligned architecture anchors SAP Cloud ERP (Public Edition and Private Edition) as the digital core, extends intelligence through SAP Business Technology Platform (SAP BTP), and leverages SAP Business Data Cloud (SAP BDC)
Embedded first, with clear make-or-buy choices, means adopting embedded AI within SAP Cloud ERP (Public Edition and Private Edition) whenever requirements are met

1 Introduction

Where SAP S/4HANA transformation programs can unlock the power of AI

AI has the potential to transform enterprises by embedding intelligence into core business processes, making them smarter, more efficient, and scalable. As a strategic enabler, AI bridges technology and meaningful business outcomes, delivering immediate, measurable impact through new solutions that improve efficiency, compliance, user experience, and decision-making. It turns transformation programs into engines of continuous efficiency and innovation.

SAP S/4HANA transformations offer a unique opportunity to scale AI in future business processes. The goal is to embed AI not as a separate add-on, but as a core design principle. Too often, AI remains in isolated pilots. The real challenge is making AI part of the operational backbone.

The objective of a modern ERP transformation isn’t merely to replicate processes on a new platform. With AI in mind, the goal is to reimagine processes, so they are more intelligent, automated, and responsive, while being more efficient. Yet, many organizations lack the structures to deploy AI effectively at scale: ownership gaps, embedded governance gaps, and no defined place in the organization to identify, manage, and evolve AI capabilities. Adoption can become fragmented and driven by individual enthusiasm rather than strategic alignment.

What is missing is a structured approach that integrates AI into governance, builds internal capabilities, and anchors AI responsibilities in the transformation architecture. This report offers practical steps to scale AI from isolated pilots to enterprise-wide capability that delivers measurable business impact.

2 AI in your SAP S/4HANA transformation

Structuring AI along the SAP S/4HANA transformation journey

Today, about two-thirds of companies are running or have completed an SAP S/4HANA transformation, while roughly one-third is just beginning. However, AI is often treated as a late-stage consideration rather than a core design principle, risking a system that feels outdated in an AI-enabled environment. Success depends on embedding AI solutions into business process design, not waiting for innovation to follow.

AI opportunities vary before, during, and after an SAP S/4HANA transformation program, and each phase requires a tailored approach. Integrating AI into an SAP S/4HANA transformation program is a structured journey with three steps:

1
Anchor AI organizationally, ideally through an AI Center of Excellence that acts as a horizontal workstream across the program
2
Continuously analyze processes to identify and refine AI solutions, ensuring opportunities are captured as the transformation and AI capabilities evolve
3
Prioritize and implement solutions, embedding them into day-to-day operations, with early wins paving the way for scalable adoption

The SAP Activate Framework structures a SAP S/4HANA transformation into four core phases:

SAP Activate
core phases

1. Prepare
Establish foundation with planning, governance, and scope definition

2. Explore
Identify requirements and prioritize AI use cases aligned to business goals

3. Realize
Implement solutions with agile development and continuous testing

4. Deploy and run
Go-live with AI-enabled processes and monitor ongoing performance

Strategy&/PwC
focus blocks
for AI

Set up AI Center of Excellence

Assess AI capabilities in SAP Cloud ERP (Public Edition and Private Edition) vs. custom development

Implement and customize prioritized AI use cases

Deploy and support AI solutions at go-live

Identify and prioritize AI use cases

Align AI opportunities with fit-to-standard workshops

Ensure alignment and integrate AI components effectively

Monitor AI performance and drive improvement

Define AI target architecture

Assess AI feasibility and conduct cost-benefit analysis

Conduct testing and prepare cutover approach

Continuous monitoring the innovation path and review of state-of-the-art AI technology architecture

Source: Strategy& analysis
Note: You can find the complete analysis with all factors in our study.

3 PwC case study

How Strategy& and PwC leverage embedded AI

In this study, we present practical examples showing how AI can generate tangible business value when integrated with SAP Cloud ERP (Public Edition and Private Edition). This exemplary case study below highlights one approach - embedded AI capabilities - to illustrate how organizations can strengthen their ERP backbone with AI.

Challenge

As the world’s largest SAP Cloud ERP customer, PwC faced ongoing efficiency challenges in financial operations, particularly in accounts payable and receivable. A recurring pain point was quickly accessing and reconciling the right data - such as identifying vendors posted to a specific P&L account or matching invoices with cancellation documents.

Approach and solution

PwC deployed SAP’s embedded copilot Joule to enable natural language interactions with ERP data. Users can perform complex queries via simple, conversational requests. Deployment required only activation and alignment with SAP’s commercial model, supported by internal ideation workshops to classify and prioritize use cases.

Business value

Embedded AI capabilities helped PwC streamline financial operations, delivering efficiency gains of up to 30%.

4 Webcast

Innovation and AI with SAP Cloud ERP: Creating value through intelligent automation

In this German webcast, learn how GenAI and other AI innovations can unlock new business opportunities. SAP S/4HANA is more than an ERP system – it is a platform for ongoing innovation that supports your SAP S/4HANA transformation.

Discover how to create additional value in your SAP Cloud ERP environment by applying AI and machine learning. We share practical use cases and proven strategies to drive process-focused innovation and future-proof your business.

Watch the webcast recording

5 Conclusion

Scaling AI into an enterprise-wide capability

The scale of the efficiency gains demonstrated in in this report argue compellingly for the outcomes that can be achieved through leveraging AI, illustrating the benefits to be gained from embedding AI systematically in business processes. The challenge lies in being systematic – in ensuring AI is not an add-on, but fully integrated and embedded in processes at the design stage.

Dr. Christian Tietz, Dr. Michael Tschiedel, and Benedikt Wiederrecht also contributed to this report.