The expectation level of AI to deliver results varies among SAP customers. While some have realistic expectations and understand that AI is a journey involving strategic planning and data preparation, others may have unrealistic expectations, hoping for immediate and dramatic transformations, says Manas Sahoo at SAP.
In April 2024, SAP held an oil, gas and energy industry roundtable conference in Seville, Spain with 58 leaders from across the globe participating. The focus was to understand the awareness and expectations of AI in the industry. SAP heard univocally that the industry expected AI to enable new energy systems that could provide safe and clean energy, given that severe safety incidents happened in the past, for example, the Deepwater Horizon incident.
At the same time, the industry needs AI to be safe, secure and ethical. There was a high level of awareness regarding the potential of Artificial Intelligence, AI to transform operations, drive efficiency, and unlock new business value.
Most enterprises understand that AI can automate routine tasks, improve predictive maintenance, optimise supply chains, and enhance decision-making processes through advanced analytics. This awareness is driven by sharing the success stories of early adopters in forums such as the one in Seville.
However, the expectation level of AI to deliver tangible results varies among customers. While some enterprises have realistic expectations and understand that AI implementation is a journey involving strategic planning, data preparation, and iterative improvement, others may have unrealistic expectations, hoping for immediate and dramatic transformations.
To manage these expectations, it is crucial for technology providers such as SAP and its partners to advise customers about the practical aspects of AI implementation, including the need for high-quality data, the importance of integrating AI with existing systems, and the potential challenges and limitations.
The ethical aspects of AI also need to be considered. With a realistic understanding of the incremental benefits of AI, industrial enterprises can better appreciate the strategic value of AI and invest in it for long-term success.
Industry expectations and pain points
The oil, gas, and energy industry has the dual responsibility of meeting ever-growing energy demand while also supporting the development of sustainable energy systems of tomorrow. Energy companies seem to be moving from the drawing boards to action when it comes to transforming towards their cleaner energy future.
However, there are several headwinds including geo-political issues and tensions leading to a renewed focus on energy security and resilient supply chains; sustainability being a clear north star and non-negotiable; fragmented modes of operations between corporate processes and plant-level operations; volatile energy prices; aging workforces and workforce transitions; and digital becoming a business priority.
The energy transition is clearly in motion and investments in cleaner energy, gas, hydrogen, renewables, electrification continue to be among the top strategic imperatives for the industry, together with reducing emissions, scope 1, 2, 3.
To address these issues, oil and gas companies prioritise solutions that enhance operational visibility, optimise asset performance, reduce downtime, and support decarbonisation efforts.
SAP’s solution stack addresses these pain points through a comprehensive portfolio designed to drive operational excellence and agility. SAP S/4HANA for Oil and Gas industries provides a digital core for integrating and streamlining business processes, enabling real-time analytics and improved decision-making. For asset management, SAP offers Enterprise Asset Management solutions that help maximise asset lifecycle, reduce maintenance costs, and enhance reliability.
To support decarbonisation, SAP sustainability solutions assist in ESG reporting, climate action, circular economy, social responsibility, preparation for EU’s Corporate Sustainability Reporting Directive and sustainable procurement.
Furthermore, SAP’s ecosystem of channel partners and specialised services enhances these capabilities by offering industry-specific expertise, implementation support, and innovative technologies. These partners help oil and gas enterprises tailor SAP solutions to their unique needs, accelerating digital transformation and driving business value.
By leveraging SAP’s technology and partner network, oil and gas companies can effectively navigate industry challenges and achieve their strategic objectives.
Embedding AI into products
AI is being embedded into SAP products and solutions through various intelligent technologies and services to securely deliver enterprise quality and scalable AI to customers. Because all of SAP’s customers are unique, they are offered a choice on how they want to embark on their AI journey.
For the oil and gas industry, AI use-cases help predict hydrocarbon movements, create commodity trade deals, validate gas plant transaction with zero touch, visually recognise shipping containers and their contents, anticipate equipment performance and automate and cut manual processes.
SAPs works with an entirely diverse ecosystem and partners with the leading general-purpose AI vendors and large language models. There are more than 380 partner applications in the SAP store and the company provides a choice of AI tools and LLMs.
For years, SAP has built AI with security, privacy, compliance, ethics, and accuracy in mind. Customers trust SAP with their most critical data, and processes because SAP knows how to build and run powerful, and reliable solutions, including AI, which touches their most vital data and systems. SAP is guided by its ethics policy, which clarifies how guiding principles relate to AI use cases, applying to SAP and all its employees worldwide.
It defines intent, expectations, and obligations for employees involved in the development, deployment, and sale of AI systems. In addition, product standards for data protection and privacy keep customers’ data safe – their data will not be used to train SAP large-language models. A further layer of protection is SAP’s governance model, including an AI ethics steering committee and an external ethics advisory panel, which continuously monitors and provides safeguards for AI systems.
There are several AI scenarios for SAP customers, with the first being AI embedded into processes of the industrial enterprise customers. SAP has more than 125 such use-cases and the number grows continuously as it builds more AI functions into the processes that span across Finance, Supply Chain, Sales and Services, Procurement, Marketing and Commerce, HR, IT and cross-functions, and industry-specific processes.
SAP’s sustainability products
SAP’s solution stack enables enterprises to demonstrate tangible results in sustainability, emissions reduction, and decarbonisation efforts through enhanced data management, analytics, and operational optimisation.
SAP S/4HANA, along with solutions such as SAP Environment, Health, and Safety Management, provides a robust foundation for tracking, reporting, and managing emissions data. These tools help enterprises monitor their carbon footprint, ensure compliance with environmental regulations, and identify areas for improvement.
SAP’s portfolio includes specialised solutions such as SAP Product Footprint Management, which calculates the carbon emissions associated with products and value chains, and SAP Sustainability Control Tower, which offers a centralised dashboard for monitoring and managing sustainability KPIs.
SAP’s advanced analytics and AI capabilities also enable enterprises to simulate and optimise processes for reduced emissions, enhance energy efficiency, and support the transition to cleaner technologies. By integrating these solutions, industrial customers can set science-based targets, track progress, and drive meaningful decarbonisation initiatives, contributing to a more sustainable future while enhancing their operational and financial performance.
To give specific examples, SAP sustainability solutions assist in the following ways:
ESG reporting
Enterprises can accelerate growth with proven business processes and continuous innovation with SAP Sustainability Control Tower.
Climate action
SAP customers can reduce the carbon footprint of their entire value chain, scope 1 to 3 based on actual business transactions.
Circular economy
Enterprises can incorporate circularity into their supply chain and create corporate sustainability models with SAP Responsible Design and Production.
Social responsibility
SAP S/4HANA Cloud for EHS workplace safety can help organisations understand the impact of their business on people and society.
CSRD
Organisations can prepare for the EU Corporate Sustainability Reporting Directive, CSRD with SAP Sustainability Control Tower.
Sustainable procurement
Organisations can achieve their procurement and sustainability goals by transitioning to sustainable procurement with SAP Ariba Sourcing.
SAP’s oil and gas products
SAP provides specific technology solutions to address unique challenges of the oil and gas industry. SAP’s Upstream Operations Management solution helps manage exploration and production activities, including drilling and well management, hydrocarbon accounting, and production revenue accounting.
In the downstream sector, SAP offers solutions for refinery management, fuel retailing, and lubricant businesses, encompassing areas such as demand forecasting, secondary distribution, and retail network operations.
Furthermore, SAP’s solutions for asset management, environment, health, and safety management, and enterprise asset management help oil and gas companies ensure regulatory compliance, mitigate risks, and maximise the lifecycle of their assets.
These SAP solutions embed AI capabilities that help predict hydrocarbon movements, create commodity trade deals, validate gas plant transaction with zero touch, visually recognise shipping containers and their contents, anticipate equipment performance and automate and cut manual processes.
All of them come as natively integrated modular suite offerings, enabling oil and gas enterprises to optimise their operations, reduce costs, and drive digital transformation across the value chain.
There are also more than 40 industry cloud solutions developed by SAP and its partner ecosystem for the oil, gas, and energy industry. These will be further supported by SAP’s Innovation Centre for Energy in US, which will see SAP focusing on co-innovation during sustainable energy transition with major energy companies and partners.
SAP’s products with embedded AI
In finance, the goal is to create AI that helps the finance team control costs and reduce risks. To accomplish this goal, SAP AI identifies exceptional situations where finance teams need to react and recommends next steps.
In travel and expense, the goal is to use AI to simplify and improve the employee experience while helping organisations improve compliance and productivity. To achieve this goal, SAP leverages trillions of spend data points and AI to augment and automate various steps in the T&E process.
To help enable a more resilient supply chain for customers, SAP aims to transform the entire design to operate process with AI. It helps leverage AI to predict, prepare and respond to rapidly evolving demands. SAP develops AI scenarios to enable companies’ sales teams to better understand their own customers’ needs, focus on the right opportunities and accelerate the sales process to win more deals. To achieve this, SAP is using AI to automate, simplify and improve sales processes.
In procurement, SAP’s goal is to use AI to contain costs and increase compliance across different markets. To achieve this goal, AI is used to help procurement organisations better navigate changing market dynamics, engage suppliers, select goods and services, enforce compliance, and streamline receiving and reconciliation.
In human capital management, SAP develops AI to help organisations efficiently attract, retain, and develop the most skilled employees. To achieve this goal, AI is used to streamline HR management and add value to employees as they navigate their careers.
The second set of SAP AI scenarios is custom AI. Here, IT professionals and developers alike have options to leverage business AI. SAP customers can choose to deploy custom AI models in SAP applications, via SAP AI Core and Launchpad. They can also infuse business specific AI models in their own applications via SAP AI Business Services.
The third set are the AI scenarios and applications from SAP ecosystem partners on SAP store. SAP has more than 380 partner applications in SAP store and ever growing.
