SAP’s Vision for APJ: Liher Urbizu on AI, Cloud, and Transformation

As the world’s economic center shifts towards Asia, SAP’s role in guiding digital transformation in the Asia Pacific Japan (APJ) region, including India, has become more crucial than ever. Leading this charge is Liher Urbizu, SAP’s Regional Chief Business Officer for APJ, who oversees the company’s commitment to delivering value across a diverse customer base of over 46,000 organizations in markets such as Australia, Southeast Asia, Japan, and India.

With over two decades of experience as a customer, partner, and leader at SAP, Liher has driven initiatives that emphasize customer success, sustainability, and diversity. Recognized with SAP’s APJ Diversity & Inclusion President’s Award in 2019, Liher’s leadership style is marked by fostering high-performance teams and creating inclusive workplaces. Originally from Spain and currently residing in Singapore, he brings a unique blend of cultural insight and strategic expertise to his role.

In this exclusive interview, Liher shares his perspectives on the APJ business landscape, SAP’s role in the mid-market AI journey, and valuable advice for businesses on their digital transformation path.

Could you share your overall perspective on the current business landscape in the Asia Pacific Japan region and India, especially concerning digital transformation and technology adoption?

The center of gravity for the global economy is shifting towards Asia, with India being at the heart of this pivot, as one of the fastest-growing, economies. Over the past 20 years, India has performed remarkably well, emerging as the fifth-largest economy. By the end of the decade, it is expected to become the third-largest economy, surpassing countries like Japan and Germany. Looking two decades ahead, India will be a much more developed economy, and we believe a part of that enabler of growth will be digital adoption. And so, we take great pride in being part of this journey, helping businesses of all sizes, both private and public, become more competitive on the global stage.

And to your query about APJ growth, last quarter, SAP in APJ grew by 38% year on year versus a company growth of 25%. So, it underpins the movement of the center of gravity is indeed Asia!

SAP has recently released a Global Midmarket AI survey. What do these survey results suggest about the readiness of the mid-market companies in India and APJ to adopt AI? Are there any surprising facts or trends highlighted?

If you look at the global AI index that rates all countries globally in terms of AI readiness, we have three of the largest Asian countries in the top 15; India being one of them. What the global AI index looks at, is the availability of talent, readiness of businesses, and government: if the governments are setting the right frameworks for AI to be deployed. Our survey also states, that in most of the categories, India does better than the world average. That’s not a surprise.

It's also interesting that the importance of AI and cybersecurity are both really top of mind. Specific to the smaller businesses, their concerns on the adoption of AI are primarily access to talent. There’s a massive competition for AI talent and then there are questions around transparency and quality of the data. Those two are very valid concerns.

And I think our strategy plays very well for both. We essentially break our AI offerings into three buckets: The first bucket is embedded AI. This means AI algorithms embedded into standard ERP business processes all across the business suite such as order to cash, design to operate, record to report, procure to pay. We will have AI algorithms adding efficiency to all those processes. That will be part of our core offering, which is ERP Cloud.

The beauty of that offering is that it's essentially ready to deploy. Once you're on ERP Cloud, you just consume that AI algorithm. And we make those use cases available in ERP Cloud to companies of all sizes. You can be a very large enterprise or a government entity, or you could be a small textile manufacturer with only 15 users, but you still want to have access to that AI capability.  So, the beauty of embedded AI is you access it, you use it, and you don't need to then worry that much about access to AI talent.  That's the way we'll help our mid-market customers adopt AI. The other two buckets are interesting as well.

There’s Joule, our co-pilot. What it will essentially do is it will simplify the user interface, so the requirement of enablement for training will become much more seamless. The interactions with the software and the cloud products will become much easier. That will also then lower the barrier of access to technology.  And for mid-markets, that really matters. And I think that also tackles the matter of concerns around access to AI capability.

Then businesses also talk about transparency and quality. To give you a perspective, 87% of total global commerce is driven by SAP customers. 80% of our customers are from midmarket. At present, more than 27,000 global SAP customers are already using Business AI, including thousands across APJ.

Now imagine that you're a small customer or a small business somewhere in India, you want to deploy AI and you have an API cloud solution or a suite solution that has embedded AI, that you can use.

The other thing, which is very interesting, 25% of the IP at SAP is being built in India. That's quite amazing. We have 14,000 engineers in our Labs organization, here in India. And so, we're developing and we're growing both the ERP private cloud applications, we call it RISE With SAP, and it's used by larger organizations.

We're equally developing, localizing, and building extensions as an additional functionality for our ERP public cloud solution. We call it GROW with SAP, which is used primarily by mid-market organizations across the country. We see this as a huge growth opportunity.  And we see Asia growing. The mid-market businesses of today are the large enterprises of tomorrow. Collectively, the mid-market is a massive contributor to employment and to the distribution of wealth in any society, in India particularly. So, we take a lot of pride in helping mid-market lift.

How is SAP currently helping businesses, particularly in India, and APJ harness the power of AI and cloud to accelerate their growth?

Our AI strategy, you can summarize it in three R's: Responsible, reliable, and relevant. We are signatories of UNESCO's 10 guiding principles for the adoption of AI. All our AI developments are built according to those principles so that we eliminate bias and unethical reactions or behaviors. That's very important because it sets the foundation for how we build AI. The second one is reliable. AI can generate hallucinations, and may not be accurate all the time. But in a business environment, you need accuracy. And you need reliability. You need to know that the data that is given to you is accurate because you're making business decisions with it.

Therefore, getting the consent of our customers to train our models is very crucial. And then imagine, 60% of India's GDP runs through an SAP system, if we use all that data to train the algorithms, then the algorithms will be more accurate.  So, you get algorithms that are responsible and are essentially reliable.  Now, the third piece, which is really important. We don't build AI for the sake of AI, or we don't build just technology for the sake of technology. It must help businesses meaningfully. And I think that's where SAP really makes a difference. For example, we built an algorithm for cash applications that simplifies and speeds up the process of releasing disbursements.

We've got algorithms built in HR tech, to reduce the number of tickets or to speed up recruitments. These are AI algorithms that add productivity in very meaningful business scenarios. And now imagine, if you're a business, and you can add that level of productivity in your order-to-cash process, or your design to operate, or throughout your supply chain, if you can improve your inventory, or if you can be a little bit more productive in the way you use your resources. That adds efficiency as it goes right into the bottom line and that's essentially what we do.

For example, Sagar Manufacturers is an Indian textile manufacturing brand that produces cotton yarn and knits the fabric, and exports it to 20 countries worldwide. They have partnered with 200 global brands. So, it's almost like the epitome of a small business that is growing very fast and is capturing the world. And they had a very complex landscape: no single source of truth, data distributed in different places, no standardization.  And if you fast-forward it to today, they implemented Grow with SAP, which is our ERP public cloud solution.

They have achieved process and efficiency improvements by 35%, a 60% improvement in financial closing, and an 18% decrease in inventory handling time. Now, inventory handling time, I have seen this in so many customers all over the world, especially in smaller businesses, the cash possession really matters. If you've got huge volumes of inventory, you're tying your cash to that inventory. But if you can speed up your inventory and handling time, essentially what you're doing is you're releasing cash back into the organization. So, it makes the organization much more flexible in the way they can operate with utmost efficiency. Brands like PGP Glass, and Suzlon Energy have just started embracing their entire AI journey with us.

What are some of the emerging AI trends that you believe will have a significant impact on the enterprise space in the coming years?

I think I would like to call out the pervasiveness of AI. We have seen technology trends in the past that will help improve maybe one industry or maybe one process. What's unique about AI is that it applies to all industries, and it applies to all processes.

The second trend is the speed of deployment and the speed of innovation becoming shorter. That means that the time it will take for customers to begin to get value out of SAP innovations and AI innovations is becoming shorter. E.g.-, we have Joule for consultants, or our BTP build code. Essentially, this is AI-made for our consultants to be faster and more efficient in how they create new developments. That means that our ability to release new use cases to the market quarterly is going to increase exponentially over the years. And then if you're on ERP cloud, that essentially will allow you to consume that innovation, as we release it every quarter.

So, on one hand, you've got AI applying to every industry and every process, on the other hand, you have a much faster time to innovation. So, the sum up of those two factors means much more value to customers. 

What role will SAP play to help businesses capitalize on these opportunities?

We believe we will be the #1 business AI provider in the world because we're in a unique position, in that we can embed and can make AI business purposeful. AI-specific, built for business. And then of course our customer base will be able to use all that innovation.

But then we'll have a growing trend of customers that are jumping on board as well. And all of them will be able to leverage all our innovations. Now imagine the beauty of embedded AI is that we build it once, but all our customers will be able to deploy it at the same time and get the benefit of it. Also to call the incredible growth of the mid-market segment, which is where we come in.

In terms of how we are helping businesses capitalize on these opportunities, we have many amazing success stories to share. We have a beautiful example of how AI is transforming health care in Asia. There's an amazing story on AI with premature babies.

When they are born, they're much more prone to having issues with their eyes and becoming blind eventually. However early treatment is fundamental to avoiding potential blindness in our children.  So that's a great use case. We have another one in Australia which is tele-Parkinson's that I find also very inspiring. Essentially, if you're tracking the evolution of a Parkinson's patient over time, doctors can track that evolution by asking the patients to draw, to make certain drawings.  But with huge volumes, it's difficult for doctors to keep up the pace and remain accurate. But with GenAI, you can do all the analysis and provide the final data to both the patient and the doctor, so that's another very good case of technology for good.

What advice would you give to the businesses in India and the APJ region that are just beginning their journey in AI and cloud adoption, so they can prepare for the future?

I would break the advice into three packets. As you said, AI adoption and cloud adoption. I would add one more layer to it which would be business transformation or digital transformation.

The number one advice would be a move to a cloud environment because that will be the baseline for the deployment of AI technology. If you want to use AI at scale, the way AI is architected, it works really well on the cloud. So, advice number one is to plan your move to the cloud, and we can help with it.

The second piece of advice is to consume embedded AI because that's the easiest to be consumed as will be embedded in the ERP processes. And if you have a specific requirement that needs to be developed for your business that doesn't come on standard processes, we know that this is happening often. And because of that, we have created the Gen AI Hub on our Business Technology Platform to build custom AI scenarios. So, if you build, number one, a data cloud-ready future state, and number two, if you begin to use embedded AI, then if you have additional use cases that are high value for your businesses that need to be custom-made, we can help as well with the Gen AI hub.

The third piece of advice is on business transformation. This is very important. Digital transformation cannot be IT-led. It has to be business-led. And that's the intersection of people, process, and technology. Now, because we know that business-led transformations have a much higher rate of success, we have acquired these three companies, Signavio for processes, LeanIX for technology management, as well as enterprise architecture management, and then we just announced the acquisition of WalkMe for digital adoption, that essentially will help with users adopting digital. We believe that these three, package it under a business transformation tool set. The use of a process-led Signavio, an architecture, technical architecture-led LeanIX, and WalkMe will massively increase the success rate of digital transformation programs.

Last but not least, focusing on sustainability and building green-ready future enterprises. To help organizations do this, we have built what we call, the Green Ledger. So, as you measure in an organization your top line and your bottom line, we want organizations also to measure the green line. And we believe we're very well placed for it.

This is critical because most organizations today, operate their sustainability requirements based on their statistical data, whereas we want to move that into being actual, accurate data. And the way you can implement it is by tracking your carbon emissions in every transaction you make and even at every step you take. Then we also have the sustainability control tower to be able to measure your carbon emissions for Scope One, Scope Two, and Scope Three. And then what is interesting is what we're doing with the SAP Business Network is to track those emissions and other sustainability footprint into your supply chain which I believe, is a very good collaboration.

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