TL;DR:
- McKinsey and SAP strengthened their strategic alliance with a focus on generative AI.
- The collaboration introduces the “Generative Enterprise” initiative, merging SAP Business AI and McKinsey’s QuantumBlack AI.
- Generative AI is expected to unlock trillions in annual economic benefits and automate up to 70% of business activities.
- SAP’s extensive customer base, responsible for 87% of global commerce, is a key focal point for AI-driven transformation.
- The partnership aims to enhance SAP S/4HANA functionalities and explore code generation for accelerated transformation.
- The true potential of generative AI extends beyond individual applications, offering exciting possibilities for cloud-enabled portfolios.
- This collaboration seeks to improve overall business resilience through AI synchronization across strategy, models, processes, data, and operations.
- Technology plays a critical role, with over 70% of value in business transformations depending on it.
- A Generative Enterprise playbook, based on AI-driven reference models, is being developed to aid organizations in achieving higher shareholder returns.
Main AI News:
In a significant move within the business technology landscape, McKinsey has elevated its longstanding strategic partnership with SAP to new heights. The collaboration introduces the “Generative Enterprise,” a cutting-edge initiative that synergizes SAP Business AI and QuantumBlack, AI by McKinsey. This strategic alliance aims to empower leaders in their quest to materialize the Generative Enterprise, fostering sustainable, resilient, and adaptable businesses.
Generative AI is poised to unleash a staggering annual economic windfall, estimated between $2.6 and $4.4 trillion, while enabling the automation of up to 70 percent of business operations. As a result, executives across enterprises are fervently engaged in developing and executing strategies to leverage AI-driven value creation.
For those seeking a competitive edge in this transformative race, SAP emerges as a formidable ally, with its customers contributing to a remarkable 87 percent of the global commerce landscape. The core enterprise ecosystem, anchored by the SAP Business Technology Platform (SAP BTP), offers an ideal playground for harnessing the immense potential of generative AI and emerging technologies.
Bob Sternfels, global managing partner for McKinsey, notes, “Our commitment impels us to assist businesses in navigating crises effectively. Partnering with SAP to deliver the Generative Enterprise vision in the enterprise context is a privilege we deeply appreciate. Together, we can pave the way for sustainable impact through technology.”
Christian Klein, CEO and board member of SAP SE, emphasizes the transformative power of AI, stating, “Relevant, reliable, and responsible AI can help companies transform faster than ever. This collaboration with McKinsey on the Generative Enterprise enables us to synergize our technological prowess and strategic execution strengths, unlocking AI-driven value across core business processes for our customers.”
McKinsey and SAP have identified various sources of value opportunities, including augmenting SAP S/4HANA’s default functionalities and leveraging assets like code generation to expedite transformation. However, both organizations concur that the true potential of generative AI transcends individual applications.
Bjørnar Jensen, McKinsey senior partner and SAP alliance global leader, underscores the potential in cloud-enabled application portfolios, stating, “Generative AI offers tremendous upside for businesses in this domain. The mature and structured business processes and system insights offered by SAP open exciting possibilities for AI-enabled transformation.“
Alexander Sukharevsky, McKinsey senior partner and global co-leader of QuantumBlack, AI by McKinsey, adds, “We are thrilled to expand our enduring partnership with SAP. Our joint research and scaling efforts will continue to disrupt cost structures for leading organizations while reimagining their business models and industries.“
McKinsey’s research on resilient businesses highlights that managing disruptions is pivotal to sustainable growth. McKinsey and SAP are aligned in their belief that generative AI can enhance overall business resilience, giving birth to the vision of the Generative Enterprise.
This innovative offering empowers clients to employ generative AI for agile responses to disruptions through seamless synchronization across strategy, operating models, process and data design, and operational execution, all facilitated by AI.
Aamer Baig, global McKinsey Technology leader, underscores the role of technology in business transformation, stating, “Over 70 percent of the value derived from business transformations across sectors hinges critically on technology. The ability to perpetually synchronize from strategy through process execution and technology adoption ensures maximum value realization and helps avoid unnecessary technical debt.“
In line with the transformation roadmap described in “Rewired: The McKinsey guide to outcompeting in the age of digital and AI,” McKinsey and SAP are collaborating to craft a Generative Enterprise playbook. This playbook includes an AI-driven reference for business operating models, a crucial resource for organizations striving for higher returns to shareholders, particularly those with advanced product operating model maturity across various geographies and industries.
Conclusion:
The expanded alliance between McKinsey and SAP signals a significant shift in the market. As the race for AI-driven transformation intensifies, this partnership, with its focus on generative AI, positions both firms as leaders in enabling businesses to adapt, thrive, and extract substantial value from technology. It underlines the growing importance of technology in business strategies, offering a blueprint for companies across sectors to navigate disruptions and maximize their returns in an evolving marketplace.
