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Posted by theanonymousone 1 day ago

SAP stops most travel and hiring because of AI's soaring cost(www.404media.co)
98 points | 69 comments
alexpotato 1 day ago|
Having 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.

johannes1234321 1 day ago||
Or AI can be a threat: If AI can spit out good enough special purpose tools a lot of the SAP adaption business goes away. If AI then also assists in data migration the moat goes away.
johnbarron 23 hours ago||
EAI has existed for twenty years...Tibco, webMethods, IBM AppConnect...SAP is still what it is. How is AI going to make a dent on this?
snarfy 23 hours ago|||
I've been impressed so far with Snowflake's offerings of "AI + a good database"
elias_t 1 day ago|||
The same argument can be made about snowflakes and other providers that handle the data layer. If they can leverage AI in a safe contained environment they would become the clear winner
happyPersonR 22 hours ago|||
LOL

Although they may internally use LLM, I wanna say said they were not going to allow their core offering to be integrated with LLM

Although maybe they reversed course?

gruturo 1 day ago||
Would 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 1 day ago||
In 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 1 day 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 23 hours ago|||
Yes 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?"

spwa4 23 hours ago|||
Take your favorite OCR software.

Then take a photo of a document and throw it into ChatGPT, or Gemini, along with the word "Transcribe".

ChatGPT wins, by a landslide. BUT AI's advantage doesn't stop there.

"Take this picture of some idiot filling in form 49, I've also attached the PDF, fill in the PDF fields, provide a database record according to the schema attached and flag if there are any obvious problems with the entries".

That works too. "Produce a latex document of this kid's math homework and flag any problems" - works. "Produce a MS word document of this letter" - works. "Read this bill and produce a JSON version following the schema from this example" ... and so on and so forth.

More than that, it is starting to work pretty well with Gemma 31B local model (will still do 30 document analyses on cpu only, at Q4 on a DDR4 or higher machine. Yes it's mostly memory speed that matters) at this point. I mean, that's GPT 5.0 or so quality (95% correct with the occasional problem), but hey, Qwen 3.8 27B may be coming out next week ...

stogot 15 hours ago||
30 document analysis in parallel
spwa4 7 hours ago||
Actually 30 is sequential on an hosted Xeon server. No GPU, about 2 minutes for a ~2000 token answer. I should try parallel since you're quite right, I should be able to do faster that way.
RaftPeople 19 hours ago|||
> forecasting-type activities

AI/ML yes, LLM's no (unless someone is naively using LLM's for forecasting)

mikert89 1 day ago||
The 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
duxup 11 hours ago||
Maybe but I work for a company that integrates with a lot of ERPs and I don't know why but the rando IT guy who can't get themselves out of a paper bag is still a thing. You'd think AI would help them but man ... doesn't seem like it.
johnbarron 1 day ago||
That 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 22 hours ago||
It’s well known that the moat of system of record is how difficult it is to extract your data into another system.
RaftPeople 18 hours 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.

mikert89 16 hours ago||
most of this complexity is because 1000 different types of businesses are jammed into the same database schema and ERP. Its all non sense
zbentley 19 hours ago|||
ERPs 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.

qw2187 1 day ago||
Telling that SAP now exfiltrates all your company data to the U.S. AI cartel:

https://www.sap.com/products/ai-platform.html

m4rtink 1 day ago||
So will AI be what finally kills SAP, making world a little bit better? ;-)
mathfailure 1 day ago|
Seems like they're doing fine: https://en.wikipedia.org/wiki/SAP#mwAeo
fragmede 1 day ago||
Does it? Those are big numbers, but it looks like in 2024 they sold €4b of assets to juice income for 2025.
d1sxeyes 23 hours ago||
They didn’t need to? They wouldn’t have a particularly bad year.
gruturo 1 day ago||
So they are using AI to run the company, and AI allocated all the money to AI?
andrekandre 23 hours ago||
it may just be actually incredible what they are doing. on the other hand it could also be absolutely insane...
happycube 23 hours ago||
Sounds like a paperclip maximizer to me.

Seriously, why the duck aren't they running their own AI systems in house???

KolibriFly 5 hours ago||
[dead]
feverzsj 1 day ago||
Like their systems aren't shitty enough.
rawland 1 day ago||
TL;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

amarcheschi 1 day ago|
I would pay to understand what mission critical employee Ai training is that can't be provided in other ways
j-bos 1 day ago||
Executive meet and greet
zbentley 19 hours ago||
Or sales/FDE deployment
g42gregory 18 hours ago||
Wait, 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 18 hours ago|
Sometimes buying a tool to make 10 people 15% more effective is a better choice than hiring 1 person.
jwsteigerwalt 23 hours ago||
This 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.
WesolyKubeczek 1 day 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 17 hours ago|
I sure am glad my employer isn’t a drunk daddy
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