ERP might not sound like the most exciting topic in the world, but for today’s business leaders, it’s one of the most critical. In the first episode of our mini-series, Why ERP Matters, Ralph Hess, a 35-year ERP industry veteran, explores the hidden cost of inaction. Standing still with outdated systems doesn’t just slow your business down; it may prevent you from ever realizing the promise of AI and intelligent automation.
Across industries, many leaders hesitate when it comes to launching or upgrading ERP initiatives. The reasons are familiar: cost, complexity, and change management. Yet, as Ralph points out, the business landscape is shifting rapidly due to trade pressures, regulatory changes, and supply chain uncertainty.
In today’s environment, every organization is looking for ways to stabilize, grow, or anchor their business. Technology isn’t just a support function anymore; it’s a strategic driver of resilience and agility.
Walk into any boardroom or dinner conversation, and someone’s talking about AI. Executives are eager to tap into automation, predictive analytics, and efficiency gains. But here’s the catch: without a strong ERP foundation, AI can’t deliver.
As Ralph explains, “Without data, without accuracy, without robust data to feed the AI models, you’re not going to achieve the outcomes.”
In short, AI is only as good as the data it’s built on, and ERP is where that data lives.
To make AI actionable in business, Hess outlines three essential layers:
Transaction Layer – Your ERP or business applications, where day-to-day operations occur.
Data Layer – A structured database or data cloud that consolidates business data (and optionally, external data) for analysis.
AI Layer – Large language models and agentic AI tools that automate processes and derive insights, built on top of the first two layers.
Companies that ignore modernization risk being locked out of this three-tier system. The “risk of doing nothing” is not just inefficiency, it’s irrelevance.
SAP’s Business Suite provides an integrated foundation for all three layers:
SAP Public Cloud anchors the transactional layer.
SAP Business Data Cloud manages and connects enterprise data.
SAP Joule, the generative AI assistant, brings intelligence directly into the business cockpit.
Together, they ensure data security, accuracy, and scalability, empowering leaders to unlock AI-driven insights safely and effectively.
The takeaway from Episode 1 is clear:
If your ERP is outdated or disconnected, your organization won’t be able to leverage AI effectively. Modernizing your ERP system is no longer a “nice to have” it’s the entry ticket to digital transformation and long-term competitiveness.
“The real risk,” Ralph concludes, “is doing nothing.”
Stay tuned for Episode 2, where Ralph explores how SAP Public Cloud Edition helps finance, operations, and executive leaders unlock measurable business value.